The Role of Corporate Law in the Adaptation of French Enterprises

Thursday, January 1st, 1998 at 12:00 am by James A. Fanto
James A. Fanto, The Role of Corporate Law in the Adaptation of French Enterprises, 1998 Colum. Bus. L. Rev. 97

The Article addresses the role of corporate law in the adaptation of French enterprises. It argues that the law has been, and will continue to be, important in the adaptation, although it attempts not to overstate the law’s significance. This role of French corporate law makes sense only in relation to the financial and economic circumstances of French business. The Article has the following theoretical and normative assumptions. First, economic circumstances as broadly defined (e.g., availability and distribution of resources, technology, methods of capital-raising, transaction costs) largely influence business enterprise structure. Businesses that adapt to the circumstances have the best chances of surviving. Second, the law of business associations, which establishes the legal relationships between principals and agents in enterprises (i.e., corporate governance), should help businesses in their adaptive efforts and should resolve most efficiently (i.e., provide the lowest cost solutions for) the inevitable problems arising in these relationships. A discussion of French corporate law should thus present the economic circumstances facing that country’s businesses, the businesses’ responses to the circumstances and the law’s contribution to the adaptive responses. A third set of assumptions is that individuals are value maximizers and remarkably adaptive to circumstances, but adaptation is not automatic, and individual and social constraints may hinder it and produce human conflict.

Author Information

Associate Professor, Brooklyn Law School