Company Law in Turmoil and the Way to “Global Company Practice”

Abstract

The events of 2000–2002 have considerably changed corporate life. What will be the effect on developments in company law, especially in Europe? This paper stresses the “transmission” role of the financial market, and of specific “transmission belts” (for example, auditors, bankers, consultants). It predicts the outcome will be the emergence of a voluntary “international company practice”, heavily influenced by the requirements and characteristics of the dominant financial market(s). The year 2002 saw massive new regulation in the US: this will accelerate the development of international company practice, albeit in a less voluntary fashion. Tensions in the effects of the Sarbanes-Oxley Act in Europe are numerous. However, auditor registration excepted, the paper suggests that these can be overcome by referring back to the underlying policies and principles.