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Explore the concept of corporate interest in Belgian company law, examining statutory references, case law implications, and controversies surrounding its definition. Delve into the narrow and broad definitions, stakeholder interests, and legislative intervention debates.
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The Corporate interest in Belgian company law Chaire Hoover UCL 1 October 2007 Prof. dr. Alain François
Key concept in corporate law • Corporate interest = statutory concept • Numerous explicit and implicit references in Belgian CompaniesCode (“BCC”): example • Art. 36 BCC (use of company goods) • Artt. 444 and 602 BCC (contribution in kind) • Art. 510 BCC (transfer restrictions) • Art. 551 BCC (voting agreements) • Art. 540 BCC (right to ask questions at GM) • … • Other statutory references in a.o. financial corporate laws • See eg. Artt. 9 Act of 1 April 2007 on Public Takeover Bidsand 28 Royal Decree of 27 April 2007 on same
Key concept in corporate law(continued) • Innumerable references in case law: • Directors’ liability cases • Validity of corporate decisions • Corporate litigation • … • Clear presence in Corporate Governance Codes • See e.g. principle 2 (provision 2.1) Lippens Code
Corporate interest is a blank concept/rule • Absence of a clear and unambiguousstatutory definition • Absence of a general statutory rule to further the corporate interest • Deliberate non-interference of company legislator
Controversy: definition of corporate interest • No consensus on definition of corporate interest • Central issue is how to deal with partial interests? • At least four possible definitions can be distinguished: • “Narrow” shareholder-oriented definition • “Broad” stakeholder-oriented definition • Variable “mixed” definition - definition varies depending on type of decision, type of company and/or factual circumstances • Negatory definition - corporate interest has no legal relevance
Narrow definition of corporate interest • Classic definition: corporate interest = interest of the shareholders to make profit • Finely tuned definition: corporate interest = dynamic and future-oriented collective profit interest of the shareholders • Finds legal base in Art. 19 BCC: “a company (contract) is to be entered into (incorporated) [and performed] in the common interest of the parties (shareholders)” • Interests of other constituencies may influence collective profit interest, but should be weighed against corporate interest
Broad definition of corporate interest • Several types of broad definitions: • Corporate interest defined as the resultant of the assessment and weighing of all relevant stakeholder interests • Corporate interest = interest of the enterprise • Broad definitions all come down to discounting, in one way or the other, the partial interests of all stakeholders in the definition of corporate interest • Broad definitions are extremely vague and lack a solid legal base de lege lata
Elements of debate • Should the protection of stakeholder interests be organized via the duty of corporate bodies to further the corporate interest? • Should the legislator intervene in the debate on the definition of corporate interest? If affirmative, can such intervention be limited to the introduction of a statutory definition?
