ICGI Research

Research line 1

Company Groups and Global Networks

Team leaders: Mieke Olaerts & Anna Beckers

In a globalizing world providers of goods and services often operate in groups or global networks, using the same name and creating an image of unity. Groups and global networks are important economic players whose activities are complex to regulate as legal rules often only apply to individual companies forming part of a group or network. Stakeholders may be affected by their operations and regulators are increasingly looking for tools to ensure a responsibility of the group or network as a whole for certain important societal interest that transcendent the legal entity that forms part of the group or network. This development raises several questions, such as: in which situations should the group or network be seen as an economic unity? What legal or regulatory tools can be used to regulate group and network relations? What are the consequences of these developments for the internal governance of company groups and networks? This research line focuses on how these issues can be addressed and how company groups and global networks can be regulated.

Research Focus

Central to this research line are: i. the protection of stakeholders and ii. governance aspects of groups and networks. The research focuses on both the internal and the external dimension of groups and networks. The internal dimension relates to the relationship among the members within the group\network, whereas the external dimension concerns the relationship of the group\network vis a vis third parties such as the relevant stakeholders. One of the aims within the scope of this research line is to investigate to what extent existing liability rules have an influence on the governance of company groups and networks and in what way internal group policies can be enforced within company groups as well as how compliance with these rules can be ensured. The research line has so far led to several research projects, collaboration and reports such as for example the national report on Company Groups in the Netherlands for the International Academy of Comparative Law in 2017. Several publications on the governance of company groups and an ongoing book project related to Governance in company groups from a comparative law perspective.

Recent Output 

Books 

"Groups of Companies", published by Springer, edited by Rafael Mariano Manovil, containing a contribution of ICGI member Mieke Olaerts on the National Report on the Netherlands, May 2020. 

 

 "Van het Concern", 10th edn., published by Wolters Kluwer, written by Adriaan Dorresteijn and ICGI members Steef Bartman and Mieke Olaerts, September 2020.   

 

 

Research line 2

The Dynamic between Shareholders and Boards in the Changing Paradigm of Corporate Law

Team leaders: Bastiaan Kemp & Mieke Olaerts

Shareholders are powerful players within the governance of companies. They generally have the power to appoint, suspend and dismiss directors, to amend the articles of association and to change the capital structure of the company (dividend, repurchase, etc.). Nevertheless, the prevailing view within many jurisdictions is that companies should not be solely focused on the interest of shareholders. Instead, the interests of employees, creditors and other constituencies should also be taken into account. This view has been gaining more momentum in recent years and leads to changes in the governance dynamic of the company.

Research Focus

This research line is focused on explaining the dynamic and tension between shareholders and boards under corporate law and aims to formulate potential instruments to (re)solve the tension. The research focuses both on the present corporate governance paradigm, in which shareholders and directors are currently interacting when exercising their powers, and on potential future corporate governance regulations that could influence the way in which these actors interact, keeping in mind the more stakeholder focused role that companies are expected to have in society. The research includes empirical studies of the current corporate governance of listed companies and the doctrine behind this corporate governance, but also in what way future corporate governance could be structured to enhance and safeguard stakeholder interests in order to provide the corporate form with a sustainable future.

This research line has so far led to several research projects and collaborations, such as publications on shareholder fiduciary duties and empirical research on the use of so-called oligarchic clauses by Dutch listed companies. Current and future research will focus in particular on expanding the empirical research results and cooperation with other disciplines, in particular the Maastricht University School of Business and Economics. A preeminent example of interdisciplinary research within this research line is the Elverding Chair. This is a co-chair between the Faculty of Law (Professor Mieke Olaerts) and School of Business and Economics (Professor Rob Bauer), which focuses specifically on Sustainable Business, Culture and Corporate Regulation

 

Research line 3

Cross-border Corporate Mobility in the EU

Team leaders: Marcus Meyers & Thomas Biermeyer

The topic of cross-border corporate mobility has been on the EU legislator’s agenda for several decades. However EU integration has only accelerated in this area in recent years due to the creation of European company law forms, such as the European Company (Societas Europeae, SE), legislation on cross-border mergers – the Cross-Border Mergers Directive (“CBMD”) – and the case-law of the Court of Justice of the European Union (“CJEU”).

When considering new legislation and the protection of different stakeholders in corporate mobility transactions, such as shareholders, creditors or employees, a crucial question is to what extent companies use cross-border mobility mechanisms such as cross-border seat transfers, cross-border mergers, cross-border divisions or the activities of SE/SCE companies in practice. Different studies and research exercises have been undertaken in this area, yet, none of which has been able to provide a full picture as to the extent of corporate mobility in the EU.

Research Focus

This research line investigates where, how and why cross-border corporate mobility takes place within the EU. The research line consists among other things of a data collection exercise concerning corporate mobility within the EU/EEA using the following instruments: European companies (SE, SCE), cross-border mergers, cross-border seat transfers and cross-border divisions. Whilst we do not claim to provide a full picture, our aim is twofold: first of all, we want to add to the already existing data with regard to certain issues (SEs, cross-border mergers). Secondly, our aim is to gather data in certain specific new areas, such as in the area of cross-border transfers of the registered office of a company (seat transfer) or cross-border divisions. Data is collected on these instruments for all 28 EU Member States as well as Iceland, Liechtenstein and Norway.

Part of the research is done in collaboration with the Maastricht Law and Tech Lab and the Maastricht Institute of Data Science with the aim of implementing data science tools (web-scraping, natural language processing (NLP) and a relational database model) in order to:

• Create a semi-automated data processing pipeline for the collection and analysis of notices by companies engaging in cross-border transactions
• Create a relational database model to allow for storage of data in a machine-readable format
• Visualise the gathered data by means of a direct link between the database and Tableau

In order to find an answer to the second and third research question, namely how and why corporate mobility takes place we combine our dataset with other datasets, including micro and macroeconomic data, in order to provide answers as to how corporate mobility can be explained and which lessons policymakers, academics and practitioners can learn from such analysis. A specific focus thereby lies on the social impact of cross-border corporate mobility.

 

Research line 4

Companies in Financial Distress

Team leader: Samantha Renssen

Financial distress: an unpleasant, but common phenomenon amongst companies. A company in financial distress has a low cash flow state, without actually being insolvent. Basically, the company falls within a twilight zone: in the vicinity of insolvency. When a company is in financial distress, there are three possibilities: rescue the (viable) parts of the company by means of a restructuring, liquidation of the (unviable) company by dissolution or by insolvency. Since liquidation destroys the company and its value, restructuring is of course the preferable option. It is therefore of great importance that companies in financial distress have access to a framework enabling them to restructure in order to prevent insolvency. Equally important is however that creditors are protected during both restructuring and liquidation proceedings. 

Research Focus

The focus within this research line is on the restructuring possibilities for companies in financial distress and liquidation procedures (dissolution and bankruptcy) for unviable companies. The research looks into at these issues both from a national as well as a cross-border perspective.

In Europe national restructuring and insolvency rules vary greatly in respect of the range of procedures available to viable companies in financial distress aiming at restructuring their business. Looking into harmonisation possibilities is thus of importance. Regarding restructuring possibilities, the first step has been taken by the European Commission: recently introduced Directive 2019/1023 lays down rules for restructuring frameworks. However, this Directive focusses primarily on restructuring plans (for example the scheme of arrangement). It lacks harmonisation rules about another important procedure; the pre-pack. Especially since the Smallsteps-ruling (C‑126/16) of the ECJ, legislation (and case law) about the pre-pack is developing amongst Member States. This research line aims to look into harmonisation possibilities in the field of the pre-pack as well as practicalities surrounding this procedure.

When looking into liquidation possibilities (outside of bankruptcy) for unviable companies in financial distress, one will immediately notice that EU harmonisation is lacking. This is alarming, because some Member States have developed methods to liquidate a company very cheaply and quickly (for example the turbo liquidation in the Netherlands). Sometimes these procedures are open invitations to commit fraud. Within this research line, possible law changes on national level as well as harmonisation possibilities at EU level regarding those quick liquidation procedures will be explored.