Search results

1 – 10 of 740
To view the access options for this content please click here
Article
Publication date: 5 January 2015

Charles KN Lam and S.H. Goo

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play…

Abstract

Purpose

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role in improving corporate governance. A gentleman in the context of Confucianism tends to be inclusive and broad-minded in embracing the interest of different stakeholders. In fact, he will balance the interests of shareholders and other stakeholders if there is any inherent conflict and try to achieve a win-win situation. Ultimately, he will run the company not just for profit-making but for social justice and commitment.

Design/methodology/approach

The authors examine the leading cases in Hong Kong and the United Kingdom about the law of fiduciary duty and the duty of care and its relationship with Confucianism. In this respect, we review the teachings of the traditional Confucian texts and use Confucianism to fill in the gap where common law rules cannot reach. In addition, we adopt a comparative study approach in examining the law of directors’ duties in Hong Kong, China and the United Kingdom.

Findings

It can be seen that the concept of fiduciary duty and duty of care is quite complicated and evolving and always subject to the interpretations of the court from time to time. For fiduciary duty, the term itself is quite conceptual and not immediately available to the general public. But loyalty in the context of Confucianism is a very lively and down-to-earth moral principle. Besides, fiduciary duty is imposed from outside, where directors had no choice but to accept. But loyalty in the context of Confucianism is something inherent and something from within. It is a moral principle that if you deeply understand the meaning of it, you will automatically accept it as a good virtue and your conduct will naturally be guided by such a principle. Confucianism can thereby be used to fill the gap where rules and regulations cannot reach. Confucian business ethics and common law rule should be complementary to each other in the development of a Chinese corporate governance system.

Originality/value

This paper is the first of its kind in discussing the relationship between the law of directors’ duties and Confucianism. It argues that Confucianism plays a crucial role in guiding the behavior of the directors and can supplement the abstract principles of directors’ duties in the context of a Chinese corporate governance system.

To view the access options for this content please click here
Book part
Publication date: 17 October 2014

Moin A. Yahya

Making law in America is not a simple task. It can be legislated by Congress, enforced by the executive, interpreted by the courts, and augmented by a massive body of

Abstract

Making law in America is not a simple task. It can be legislated by Congress, enforced by the executive, interpreted by the courts, and augmented by a massive body of rules created by administrative agencies such as the Securities and Exchange Commission (SEC). The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) (Dodd-Frank was passed) with an eye to preventing future financial crises. Four years later, many details of Dodd-Frank have yet to be finalized as the SEC is still in the process of developing the regulations that the legislation required them to create. Even once the regulations are finalized by the SEC, the regulations will be challenged by various parties in the courts. The regulations will be either upheld or rejected. Those that are upheld will then face numerous challenges when applied in specific cases, while those rejected will have to be redone all over again. The process of developing these regulations is cumbersome and attracts many of the special interests that were present in the legislative phase of Dodd-Frank and who will also be present in the litigation phases of testing Dodd-Frank in the courts. This paper focuses on the requirement that investment advisors and broker-dealers be deemed as owing fiduciary duties to their clients as a case study for the entangled political economy theory. The paper shows how the development of a simple rule such as whether these fiduciary duties should be owed or not requires years of back and forth between the legislative, executive, administrative, and judicial branches.

To view the access options for this content please click here
Article
Publication date: 18 October 2011

A. Joseph Warburton

The purpose of this paper is to explore whether fiduciary duties impact the behavior of firm insiders. Trust law imposes stricter fiduciary obligations on insiders than

Abstract

Purpose

The purpose of this paper is to explore whether fiduciary duties impact the behavior of firm insiders. Trust law imposes stricter fiduciary obligations on insiders than corporate law does. This paper seeks to examine whether the difference in fiduciary duties impacts agency conflict, performance, and/or risk taking.

Design/methodology/approach

The paper takes an empirical approach to answering the question by comparing mutual funds organized as trusts and as corporations. The existence of these two types of organizations within the same industry offers a unique laboratory for the study of the effects of fiduciary duties.

Findings

Mutual funds organized in trust form charge significantly lower fees and take on less risk than equivalent mutual funds organized in corporate form. Evidence also suggests that the trusts tend to under‐perform their corporate counterparts, even after adjusting for differences in risk.

Originality/value

Much of the existing literature on firm governance and investor protection focuses on the corporation and, hence, takes organizational form as a given. By comparing trusts and corporations, this paper examines governance at a more fundamental level and exploits heterogeneity in corporate and trust fiduciary duties. The results have implications for corporate governance design, suggesting that heightened fiduciary duties can enhance investor protection by mitigating agency conflict and managerial risk taking, though at the possible cost of inferior risk‐adjusted performance.

Details

Corporate Governance: The international journal of business in society, vol. 11 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

To view the access options for this content please click here

Abstract

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-0-76231-239-9

To view the access options for this content please click here
Article
Publication date: 7 September 2015

Winston Penhall

The article analyses the findings of the Court in the Arch Cru case relating to manager fiduciary duties under English law and conflicts of interest compliance failings.

Abstract

Purpose

The article analyses the findings of the Court in the Arch Cru case relating to manager fiduciary duties under English law and conflicts of interest compliance failings.

Design/methodology/approach

This article summarises the Arch Cru case with a focus on fiduciary duties and practical compliance suggestions for conflicts of interest situations.

Findings

The article addresses in particular the novelty of the fiduciary duty finding in the Arch Cru case and the justifiable concerns that compliance officers may have going forward given the nature of the regulatory enforcement approach taken by the FCA.

Practical implications

The article highlights the nature of the fiduciary obligations owed by managers under English law together with a brief analysis of the causes of action for breach of fiduciary duty and the linkage to regulatory compliance obligations.

Originality/value

The article is of value to investment managers, their compliance officers and general counsel where the manager provides investment management services under English law because it provides insight into the nature of investment manager fiduciary duties under English law and the impact of breaching those duties in a conflicts of interest scenario.

Details

Journal of Investment Compliance, vol. 16 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 3 May 2016

Jeffery E. Schaff and Michele L. Schaff

Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed.

Abstract

Purpose

Explains the US Department of Labor’s newly proposed “Conflicts of Interest” rule and provides a critical analysis of its impact should it be adopted as proposed.

Design/methodology/approach

Explains the DOL’s proposed Conflict of Interest rule and discusses how it changes the current fiduciary standards of care under ERISA. The article then probes more deeply into the practical matters involved in implementing the rule, and into the realities of how it would impact fiduciary standards generally, investors, the financial services industry and securities arbitrations. Reactions to the proposed rule are then explained against the backdrop of the practical implications thereof.

Findings

This article concludes that the DOL’s proposed Conflict of Interest rule, albeit well-intended, is not reasonably designed to achieve its stated goal and would instead likely harm those whom it purports to help. Ironically, it also potentially waters down the existing high standards of current fiduciaries. The article supports the DOL’s goal of greater responsibility for financial service professionals and proffers an alternative solution that could achieve the desired result more effectively.

Originality/value

This article offers valuable insight on the realities of the proposed law and practical guidance on its implications to the investing public, the financial services industry and securities attorneys.

Details

Journal of Investment Compliance, vol. 17 no. 1
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 1 December 2001

Dennis L. Payette

Examines the use and misuse of the term fiduciary responsibility as it applies to trustees and officers of the corporation in universities and colleges. Through research…

Abstract

Examines the use and misuse of the term fiduciary responsibility as it applies to trustees and officers of the corporation in universities and colleges. Through research on published applications of the term, reveals that the term is rarely defined yet frequently used as a justification for action or inaction by trustees and officers. Antagonists of decisions sometimes use the term as a rationalization for suggesting action or decisions that should be made by trustees or officers in higher education. Concludes with a proposed definition of fiduciary responsibility that could be useful for trustees and officers and others interested in the concept of fiduciary responsibility.

Details

Corporate Governance: The international journal of business in society, vol. 1 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

To view the access options for this content please click here
Article
Publication date: 30 January 2009

Stephen B. Young

The paper presents an overview of perspectives on corporate governance grounded in the Common Law legal traditions of the UK and the USA. It further discusses whether that…

Abstract

Purpose

The paper presents an overview of perspectives on corporate governance grounded in the Common Law legal traditions of the UK and the USA. It further discusses whether that perspective is suitable for global application.

Design/methodology/approach

The paper presents personal observations on the operational dynamics of rules and practices of corporate governance as necessary functional supports for large scale financial capitalization of enterprise under conditions of modern industrialization.

Findings

The paper concludes that the US perspective on corporate governance is rationally related to objective requirements of financing enterprise and that, as capital markets become larger and more liquid around the world, the corporate governance regimes will, in the main, come to resemble the US model. Though cultural variations on the US pattern are compatible with the purposes of corporate governance to constrain abuse of power in private corporations.

Practical implications

The implication of this paper is for the implementation of corporate governance regimes in emerging market countries, i.e. that flexibility is permissible but a focus on transparency and accountability under all circumstances is required.

Originality/value

The contribution of the paper is to provide a framework for balancing the rules and practices of US corporate governance with the cultural styles and patterns of different national regulatory settings.

Details

International Journal of Law and Management, vol. 51 no. 1
Type: Research Article
ISSN: 1754-243X

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 2000

The Committee has considered the present state of English civil law in relation to remedies available to victims of money laundering. We summarise here the relevant rules…

Abstract

The Committee has considered the present state of English civil law in relation to remedies available to victims of money laundering. We summarise here the relevant rules and principles of English law. See ‘Summary of the current legal position’ below.

Details

Journal of Money Laundering Control, vol. 4 no. 2
Type: Research Article
ISSN: 1368-5201

To view the access options for this content please click here
Article
Publication date: 9 May 2016

Norman Mugarura

The purpose of this paper is to articulate the law relating to syndicated loan agreements and what legal experts and parties need to safeguard against inherent pitfalls in…

Abstract

Purpose

The purpose of this paper is to articulate the law relating to syndicated loan agreements and what legal experts and parties need to safeguard against inherent pitfalls in its usage and practice. The research design of this paper has two strands: an examination of generic issues relating syndicated loan agreements and the process; and the mechanisms for transferring proprietary rights and interests should parties want to do so.

Design/methodology/approach

The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application. There has been an uptake in syndicated loan markets not only in United Kingdom but also globally. While there has been a growing body of literature on syndicated loan markets, mechanisms for transferring proprietary rights and interests of contractual parties have not been given proportionate attention. The paper addresses a gap in the law of syndicated loan markets and the varied ways in which they are harnessed in international commercial practice. It addresses existing gaps in the law and practice of syndicated loans, not only in the UK but also in other jurisdictions where examples have been drawn. The research design of this paper has two strands: an examination of generic issues relating loans and the process in which they are constituted as financial products; and the mechanisms for transferring proprietary rights and interests.

Findings

The findings underscore the fact that much as syndicated loans offer huge advantages to commercial parties, there are also intricacies which parties need to keep in mind and guard against. Like in other forms of commercial agreements, parties to a syndicated loan agreement have the power to nominate the governing law not necessarily from jurisdictions where they do business but as they may see fit. In practice, effective contractual terms in syndicated loans are to be applied slightly differently to other form of commercial agreements in English contract law. For example, representation and warranties are grouped together and constitute statements by the borrower, which the lender considers should be true at the inception of the loan agreement. As a syndicated loan involves the participation of many banks (obviously some foreign banks), there is the potential for conflict of laws. As such, arranging a syndicated loan should be governed by the relating to international commercial contracts to address the challenge posed by conflict of laws. This is essential to ensure proprietary transfer of rights in the asset are properly constituted and effective. The loan should be carefully structured to reflect important technical issues which relate to duties and obligation of contractual parties.

Research limitations/implications

This was largely a theoretical paper undertaken on the basis of evaluating primary and secondary data sources, some of which were not able to corroborate. It would have been better to corroborate some of the data sources used with financial institutions (which specialise in syndicate loans and related products) to mitigate the potential for bias the data used were generated.

Practical implications

It is important that legal practitioners and policy markers have access to requisite data on different types of loan markets not only in the UK but also other jurisdictions. One of the most important implication is that unlike bond markets (which are sought in response to an uptake in market risks), the foregoing environment tends to negatively correlate in syndicated loan markets. Lending institutions such as banks tend to be cautious when there are instabilities in the market as demonstrated in the aftermath of the recent global financial crisis (2010-2014). There is a converse relationship between loan markets and syndicated loans, which is explained by the fact that the higher the risks, the more cautious lenders (financial institutions) tend to be to safeguard against uncertainties of ending in an environment which is not conducive for business. Bonds on the other hand are sought as security by credit markets against inherent risks especially in times of economic uncertainties. This is why in the aftermath of the recent global financial crisis, banks were anxious and unwilling to lend not only to each other but also to small business for fear and to curtail potential market risks. It needs to be noted that just like in other forms of international commercial agreements, parties in syndicated loan agreements have autonomy to nominate the governing law of the agreement, not necessarily from jurisdictions where parties do business. Where parties have not nominated the governing law clause of syndicated loan contracts, rules of private international law such as characteristic performance of the contract will apply.

Social implications

There is a growing body of literature on syndicated loan markets, but one wonders why mechanisms for transferring proprietary rights and interests of contractual parties have not been written about as much. It is an important area but has somehow been overlooked by scholars on this subject. If the borrowers’ fails to keep up their repayments (default), it will have an adverse on loan markets and the economic stability which will in turn affects businesses, people and national governments.

Originality/value

The paper was written on the basis of evaluating primary and secondary data sources to gain insights into commercial experiences of harnessing syndicated loan facilities as an alternative form of raising finance for development projects. It has examined case law which reflects the law and practice of syndicated loan markets both in common and civil law jurisdictions. Particular attention has been paid to the credibility of source materials and its relevance to usage and practice of syndicated loan agreements. The core element of this methodology has been an evaluation of generic issues which underpin syndicated loan agreements, analysis of academic literature and evaluation of cases and policy documents. The paper has drawn examples in both common and civil jurisdictions to gain insights into the law which governs syndicated loan markets and its practical application.

Details

Journal of Financial Regulation and Compliance, vol. 24 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

1 – 10 of 740