Copyright (c) 1999 George Washington University
George Washington Journal of International Law & Economics
ARTICLE: REFORMING FRENCH CORPORATE GOVERNANCE:
A RETURN TO THE TWO-TIER BOARD?
32 GW J. Int'l L. & Econ. 1
Lauren J. Aste *
France is often associated with its long history of political revolu tion, typically marked by marches to Versailles and uprisings in the streets of Paris. Today a different type of revolution, sparked by recent allegations of corruption against French corporate execu tives, is taking place in the boardrooms of France's most powerful companies. 2 In response to these allegations the French business community has started to rethink traditional managerial roles in an effort to reform corporate governance.
The term "corporate governance," or le gouvernement d'entreprise, has a range of meanings depending on how one uses it. Some authors, such as Andrei Shleifer and Robert Vishny, define corpo rate governance from an economic perspective as "the ways in which suppliers of finance to corporations assure themselves of get ting a return on their investment." 3 Other authors, such as Robert A.G. Monks and Nell Minow, take a more political approach, defin ing corporate governance as the connection of "directors, manag ers, employees, shareholders, customers, creditors and suppliers ... to the corporation and to one another." 4 For purposes of this article, corporate governance basically involves the relationship between corporate directors and shareholders.
Reformers of corporate governance generally seek a governance structure under which directors are responsible agents acting on behalf of their shareholders and making decisions based on the best interests of these shareholders, not their own best interests. 5 In addition to encouraging directors to represent shareholder interests more actively, reformers seek ...
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