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Foreword--Comparative Corporate Law & Governance, Dan W. Puchniak, Randall S. Thomas

Vanderbilt Journal of Transnational Law

Despite the challenges posed by Covid-19, especially for the student editors of the Journal, this special issue has been published on time and has been superbly edited. On behalf of the authors, NUS Law, and the Law & Business Program of Vanderbilt Law School, we would like to express our sincere appreciation to the editor in chief, Joshua D. Minchin, and the entire editorial team of the Vanderbilt Journal of Transnational Law for their remarkable skill, effort, and dedication in these challenging times. Your performance gives us great hope that the future is extremely bright.

Addressing The Auditor Independence Puzzle: Regulatory Models And Proposal For Reform, Martin Gelter, Aurelio Gurrea-Martinez

Vanderbilt Journal of Transnational Law

Auditors play a major role in corporate governance and capital markets. Ex ante, auditors facilitate firms' access to finance by fostering trust among public investors. Ex post, auditors can prevent misbehavior and prevent financial fraud by corporate insiders. In order to fulfill these goals, however, in addition to having the adequate knowledge and expertise, auditors must perform their functions in an independent manner. Unfortunately, auditors are often subject to conflicts of interest, for example, resulting from the provision of nonaudit services but also because of the mere fact of being hired and paid by the audited company. Therefore, even if …

The Conundrum Of Common Ownership, Jennifer G. Hill

Vanderbilt Journal of Transnational Law

The common ownership debate has become one of the most contentious issues in corporate law today. This debate is a by-product of major changes to capital market ownership structure, which have triggered concerns about the rise of institutional investors, the growth of index investing, and the rapid concentration of ownership in major international financial markets. The common ownership theory focuses on concerns about the incentives of large financial institutions holding widely diversified portfolios of shares in competing companies within a particular economic sector. Proponents of the common ownership theory argue that, even where institutional investors have relatively small ownership stakes, …

Shareholder Protection In Close Corporations And The Curious Case Of Japan: The Enigmatic Past And Present Of Withdrawal In A Leading Economy, Alan K. Koh

Vanderbilt Journal of Transnational Law

Oppressed, outvoted, and outgunned, minority shareholders have an obvious solution for their woes: vote with their feet, sell their shares, and leave the company. But this "Wall Street Rule" is only available to shareholders in publicly listed corporations; shareholders in close corporations; privately owned business entities with no market for their shares--do not have the option of easy exit. Legal solutions which enable the shareholder to voluntarily exit a company with their capital such as the oppression or unfair prejudice remedies in US and Anglo-Commonwealth corporate law--what this Article classifies as "withdrawal remedies"--are therefore vital in close corporations.

However, until …

The Law And Practice Of Shareholder Inspection Rights: A Comparative Analysis Of China And The United States, Robin H. Huang, Randall S. Thomas

Vanderbilt Journal of Transnational Law

Shareholder inspection rights allow a shareholder to access the relevant documents of the company in which they hold an interest, so as to address the problem of information asymmetry and reduce the agency costs inherent in the corporate structure. While Chinese corporate governance and American corporate governance face different sets of agency cost problems, this Article shows that shareholder inspection rights play an important role in both China and the United States. On the books, while shareholder inspection rights in both countries are broadly similar, there are some important differences on issues such as the proper purpose requirement. The empirical …

Singapore's Puzzling Embrace Of Shareholder Stewardship: A Successful Secret, Dan W. Puchniak, Samantha S. Tang

Vanderbilt Journal of Transnational Law

In the wake of the 2008 Global Financial Crisis (GFC), the United Kingdom created the first stewardship code, which was designed to transform its rationally passive institutional investors into actively engaged shareholders. In the UK corporate governance context, this idea made sense. Institutional investors collectively own a sizable majority of the shares in most of the United Kingdom's listed companies. In turn, if the UK stewardship code could incentivize them to effectively monitor management to act as "good shareholder stewards"--the managerial short-termism and excessive risk-taking, which were identified as contributors to the GFC, could be avoided.

The United Kingdom's idea …

Management Succession In Korea: Tunneling, Semi-Tunneling, And The Reaction Of Corporate Law, Kyung-Hoon Chun

Vanderbilt Journal of Transnational Law

Recently in Korea, certain issues of corporate law became the subjects of fierce political debates unlike many other jurisdictions where corporate law issues generally remain in the exclusive realm of professionals and academics. This Article begins with the question of why corporate law issues attracted so much political attention in Korea and whether such political attention actually helped improve the corporate law. In pursuing the answers to such questions, this Article identifies a recurring pattern: (i) existence of strict rules against seeking private benefits; (ii) various clever measures to circumvent such rules; (iii) failure of the courts to regulate such …

Diversity Of Shareholder Stewardship In Asia: Faux Convergence, Gen Goto, Alan K. Koh, Dan W. Puchniak

Vanderbilt Journal of Transnational Law

Since the UK adopted the world's first stewardship code in 2010, stewardship codes have proliferated across Asia. Given the UK Code's prominence, it is tempting to assume that every other stewardship code performs the same function as the UK Code. This assumption belies the truth: all these codes--regardless of whether they have in fact drawn inspiration from the UK Code--have taken different trajectories due to each adopting its jurisdiction's distinctive institutional and legal context.

Using empirical evidence and in-depth case studies of stewardship in Japan and Singapore, this Article reveals how any reception of United Kingdom-style stewardship concepts is only …

Reciprocity In China-Us Judgments Recognition, William S. Dodge, Wenliang Zhang

Vanderbilt Journal of Transnational Law

The conventional wisdom is that China and the United States do not recognize each other's court judgments. But this is changing. A US court first recognized a Chinese judgment in 2009, and a Chinese court first reciprocated in 2017. This Article provides an overview of the enforcement of US judgments in China and Chinese judgments in the United States, noting the similarities and differences in the two countries' systems. In China, rules for the enforcement of foreign judgments are established at the national level and require reciprocity. In the United States, rules for the enforcement of foreign judgments are established …

Deal Breakage In Domestic And Cross-Border Mergers And Acquisitions: New Data And Avenues For Research, Morgan Ricks

Vanderbilt Journal of Transnational Law

This Article presents a newly constructed mergers and acquisitions (M&A) data set that can support detailed analysis of deal outcomes, including deal breakage. The main novelty of the data set is a detailed classification scheme for characterizing deal outcomes, using information drawn from public announcements and news reports. The data set also includes a number of variables, hand gathered from press releases and merger agreements, that are unavailable in existing data sets in reliable form, or at all. The data set consists of all definitive, signed M&A transactions involving US public company targets with a deal value of at least …

Mixed Ownership Reform And Corporate Governance In China's State-Owned Enterprises, Jiangyu Wang, Tan Cheng-Han

Vanderbilt Journal of Transnational Law

This Article provides an early assessment of the impact on corporate governance of the most recent wave of reform of China's state-owned enterprises (SOEs) announced by the CCP in 2013, officially known as the mixed-ownership reform (MOR). It offers a comprehensive and detailed account of the background, policy and regulatory frameworks, and rationale of the MOR in light of the history of ownership reform in China. It also conducts empirical studies of the change in ownership and board composition in over 30 SOEs which have recently completed their MOR experiments, as well as several case studies. It observes that MOR's …