The Responsibility Of Multinational Governance Mechanism

On the Liability Regime in Corporate Governance . of Transnational CorporationsABSTRACTThe author tries to analyze the issue of the liability of Transnational Corporations (TNCs) from a new angle called " corporate governance". This paper will be structured in five chapters, in addition to an introduction and a conclusion. The thesis of this paper is: only when the legislators, who attempt to propose the regulatory strategy on the liability of parent company and the management of TNCs, fully take into account the economic realities in corporate governance of TNCs and pay full respect to the rights of autonomy in corporate governance of TNCs, can "the unification of efficiency and justice" be secured.Chapter 1 will be devoted to constructing a basic theoretical framework of this paper. The fundamental findings of this chapter are: the interpretations of the notion " corporate governance" between economists and lawyers not only coincide with each other, but also carry different meanings; corporate governance regimes of different countries have shown certain signs of unification lately due to the economic force of TNCs in the course of globalization, but the differences of corporate governance regimes among countries and corporations will not be diminished in the foreseeable future; because of the particularity of "corporate governance of TNCs" compared with " corporate governance of domestic corporate groups", there will be more contradictions and difficulties when facing the regulatory strategy on liability regime of the TNCs.Chapter 2 will be the legal and economic basis of the reasoning of this paper. This chapter attempts to analyze the changes of corporate governance structures and principles of TNCs centered on the two fundamental characteristics of modern company law, i. e., "independence of corporate personality" and "corporate control", and to further analyze the legal and organizational structures of TNCs. This chapter demonstrates that parent company undertakes innovations of global organizational structures through the actual conducts of its management, and that "independence of corporate personality" and "corporate control" are the two indispensable principlesin corporate governance of TNCs, and that it will be impossible to determine in general the degree of a particular parent company's control over its subsidiary. The core nature of corporate governance of TNCs is the diversity of corporate governance regime under unified management.Chapter 3 will be dedicated to a comparative survey of the liability of parent companies for the debts of their subsidiaries. This chapter tentatively argues that there exists no inexorable causal linkage between the concept of independence of corporate personality and shareholders' limited liability. The principle of limited liability shall still be applicable to TNCs under general circumstances, and we shall combine it with the economic reality of corporate governance of TNCs when disregarding this principle. The various legislative and judicial approaches to parent company's liability for the debts of its subsidiary have their inherent defects: the traditional Common Law approach of "piecing the corporate veil" sees the diversity of separate legal entities but neglects the unity of corporate control, the European legislative approach and the U.S. jurisprudential approach of "enterprise law" sees the unity but neglects the diversity, the German legislative approach sees both but tries to keep these elements artificially separated. There will be sharp conflicts when these approaches apply to TNCs.Chapter 4 will focus on the comparative study of managerial fiduciary duties in TNCs, analysis of which is developed in two parts, one of parent's and the other of subsidiary's. This chapter demonstrates that the judicial precedents and legislation of both Common Law system and Civil Law system have echoed the economic rat .nale of corporate governance to a greater or lesser degree, but due to the logic and rigorous nature of legal science, there are...