1. Structure
1.1. Two models: Shareholder's primacy (contractualism) and Stakeholder's primacy (institutionalism)
1.1.1. In Shareholder's primacy, the contract has as its only goal to make money for the partners. Just making wealth for the company and then finally divide it under the partners. It is an economic institution
1.1.2. In Stakeholder's primacy, the contract is more than just making money. It is only one of the targets, but there are many targets. It is a social institution. You have a lot of workers, and you have to support their families etc. the people that live close to the factory. A whole community of people with interests
1.2. Internal stakeholders: shareholders, managers, employees External stakeholders: creditors (risk adverse), customers, government, community
2. Definition (of corporation)
2.1. A contract/agreement between private people
3. Sustainability
3.1. ESG: Environmental, Social, Government
3.1.1. Environmental (how a company interacts with the natural world) Renewable energy, resource deplation including water, waste management, pollution reduction.
3.1.2. Social (how a company considers people and their relationship): working conditions (slavery) local communities, engagement(to hear the needs of the stakeholders.)
3.1.3. Governance (the standard and strategy for running a company): managers remuneration (it is not good if a company spends too much money because they can’t tackle other problems) tax strategy, board diversity (not only gender: all the managers have to be different) board independence (they have to have different interests, they have to represent the stakeholders: ethics, lobbying, engagement, compliance, controls.)
3.2. Shareholders, managers, employees (internal SH), creditors, customers, Government, community, (external SH), are just a part of them (e.g. people living next to a polluting industry), as part of the risk sharing community
3.2.1. The UK Companies Act (2006)
3.2.2. The italian codice di corporate governance (2020)
3.2.2.1. Common feature: Sustainable success. And to achieve this they have to act for the long term by creating long term value
3.2.3. German Corporate Governance Code (2022)
4. Companies
4.1. Arised for 2 reasons: partnership andliability liability
4.1.1. Private companies or partnerships can be traced back to Roman law
4.1.1.1. They have their own contractual forms, and the law dealt and still deals with them basically as bilateral or multilateral contracts.
5. Companies with limited liability
5.1. 1º - Special act of the state (king) which granted particular privileges to the individual company concerned (specially the limited liability)
5.1.1. 2º - New revolution: a general rule about limited liability: French Code Commerce of 1807
6. Definition (of company)
6.1. Reference to the structure that allows a legal fiction to operate business and makes it possible for third parties to confidently do business with it (Gilson). In other words: It is just a model for the organization of a business
6.2. A company is a function that has as inputs resources and has as outputs resources (financial definition)
7. Corporate Governance
7.1. It is PATH DEPENDENT: history, traditions, practices, geography, environment, needs (all the reality) influences it
7.1.1. Islamic Banks example
7.1.1.1. The Koran prohibits interest (riba') but business need to be financed and the national economy needs to grow
7.1.1.1.1. The bank participates in the profit/loses of the creditor. Peculiar loan agreement that have their ratio in this peculiar cultural/religious content.
7.1.2. Ascarelli and the comparison Italy/Brasil (1947) example
7.1.2.1. He scaped in Brasil (Univ. SP) because of the racial persecution.Before the 2WW he is divided between the dominant model of positivist-jurist (a jurist must declare what the law says) and a new approach.
7.1.2.1.1. Brazilian civil law, althought it is based on Romanistic law and it is founded on typical European dogmes (and more precisely, Italian and French) tradition - generates original solutions, because the reality (facts) in which rules are set is different.