The study ‘public interest and the company in germany and britain’ is principally concerned with public interest agendas in re

PUBLIC INTEREST AND THE COMPANY IN GERMANY AND BRITAIN
• The study ‘Public Interest and the Company in Germany and Britain’ is principally concerned with public interest agendas in relation to the company and how farthese differ in Germany and Britain. It is not concerned with the detail of externalcorporate regulation, but with how the internal structures of the company areconstituted by particular political understandings of the public interest, whichbecome embodied in formal and informal rules.
• We examine factors which shape the politics of the public interest in relation to the company: firstly, the role of political ideas and interests in creating politicalcoalitions which express a particular conception of the public interest; secondly,the extent to which rules and norms embodied in institutions and legal casesshape subsequent expectations of how the company is related to the publicinterest, and how it should behave; thirdly, how the constraints and opportunitiesof the global economy shape attitudes towards the boundaries of legitimateinterference in company affairs; and fourthly, whether European integrationsubstantially shapes company law in a way that can be distinguished from nationallegislation.
• Historically, we show how the politics of the public interest in Britain and Germany has defined the public interest in relation to the company differently, and setdifferent limits of legitimate state interference in the structure and behaviour of thecompany. We contrast the British model of the company as a private associationwith the German model of the company as a constitutional association, and reviewthe evolution of public interest agendas in the two countries since the introductionof limited liability in Britain in the 1850s and the reform of German corporate law inthe 1870s, and how they have shaped the development of company law andregulation in response to changing economic and political circumstances.
• Company law in Britain has tended historically to favour a 'private association' model of the company. In the UK the public interest in relation to the company hashistorically been identified with the maximisation of profits, the protection of smallprivate investors, and the reluctance of the state to specify particular forms ofcompany structure. Hence, company law has been primarily concerned withissues such as the fiduciary duties of company directors and the obligationimposed on all companies to disclose financial information and hold shareholders'meetings. Corporate law leaves a large scope for shareholders and managers todecide procedures for making decisions by contract. Where the state intervenes,the emphasis has been on protection of minority shareholder rights and on market-making rules such as accounting and disclosure. Other social and economicconcerns, such as the treatment of employees and the impact of corporate activityon local communities and the physical environment, have been viewed as issuesexternal to the company and company law. The interests of employees havetraditionally been protected through collective bargaining, and legislation aimed atreducing adverse third-party effects assumed until recently an adversarial relationship between the company and affected groups. Most perceived deficits inthe UK system have been addressed by a proliferation of voluntary Codes ofConduct in the 1980s and 1990s and efforts to diffuse best practices throughshareholder activism.
• By contrast, a ‘constitutional’ model of the company predominates in Germany.
Constitutionalism is distinguished by the strong use of non-contractual rights andobligations of its members, rooted in public authority. Private actors are oftenobligated by law to consider ‘public’ interests in addition to the private intereststhey represent. For example, works councils and management have the legalobligation in the Works Constitution Act to work together in the interests of thecompany. The two-tiered board structure also ‘constitutionalises’ shareholderinterests by specifying procedures for shareholder representation and monitoringin a more detailed manner than board systems in most countries. The scope ofpublic interest obligations for Germany companies is also wider than in Britain,incorporating a pluralist structure of interests within company governance. Themost prominent example is codetermination (Mitbestimmung) of employees inworks councils and the supervisory board (Aufsichtsrat) of companies.
• The report analyses the changing context for public interest agendas toward the company particularly in the 1990s. This has three main aspects: the extent towhich a more liberal global economy creates pressures for convergence ofinstitutional arrangements within capitalist economies; new public interestconcerns advanced by pressure groups and social movements, particularlyconcerning the environment and the rights of minorities; and pressure from the EUon member states to adopt uniform European rules and practices. The reportanalyses the scope of public interest concerns. It shows how Germany and Britaindiffer in the typical instruments of public policy for pursuing public interest claimsagainst the company. Three main aspects of the company in relation to publicinterest agendas are analysed for both Britain and Germany: companies andshareholders; companies and employees; and companies and the community.
contactProfessor Andrew Gambletelephone 0114 222 1651/0660e-mail [email protected] notes to the editor‘The Public Interest and the Company in Germany and Britain’ by Shawn Donnelly, Andrew Gamble, Gregory Jackson and JohnParkinson is published by the Anglo-German Foundation (ISBN 1-900834-24-3). Copies are available from YPS, 64 HallfieldRoad, Layerthorpe, York YO31 7ZQ, telephone 01904 431 213, price £12.
notes to editors1. The Anglo-German Foundation for the Study of Industrial Society was established in 1973. The Foundation is anindependent bilateral body which funds comparative research and sponsors British-German events in the economic, industrialand social policy field in both countries.
2. Review and reference copies of the report are available from the Anglo-German Foundation, 17 Bloomsbury Square, LondonWC1A 2NH, telephone Nina Frentrop on 020 7404 3137 or e-mail [email protected]

Source: http://www.agf.org.uk/cms/upload/pdfs/ES/2001_ES1215_e_public_interest_and_the_company.pdf