The Changing Face of Transnational Business Governance: Private Corporate Law Liability and Accountability of Transnational Groups in a Post-Financial Crisis World

This article seeks to critically assess the recently dominant financialized model of corporate law and governance and its contribution to the creation of the asocial corporation geared only to the enhancement of shareholder value. This article places corporate law in a wider context of national and international legal developments that, together, create a framework for the financialization of transnational corporate activity. This article shows that a new approach to transnational corporate governance is emerging from a number of sources. These predate the crisis but have been given impetus by it. In particular, three important phenomena are examined: the rise of activist litigation against the parent companies of multinational enterprises (MNEs) for the actions of overseas subsidiaries; the new framework for human rights and business developed by the U.N. Special Representative of the Secretary General; and the increased role of the state as an owner, controller, and regulator of enterprise as a result of the financial crisis and the rise of state-owned and -controlled MNEs from newly industrialized countries. Together, these developments contribute to a reconsideration of the enhanced shareholder value model and the development of a more socially rooted appraisal of the corporation and of corporate law and governance. In addition, new approaches to international economic law instruments and institutional activities can further enhance this reform process, and examples of existing and potential changes are given in the final part. (First presented at a symposium in the context of the biannual conference of the German Law & Society Association (Vereinigung fur Recht und Gesellschaft e. V) on Transnationalism in Law, the State, and Society. This conference was organized together with the Collaborative Research Center (CRC) 597 Transformations of the State at the University of Bremen from March 3-5, 2010. The Collaborative Research Center 597 \u27Transformations of the State, U. BREMEN, www.staat.uni-bremen.de