The End of History for the Board Neutrality Rule in the EU

Abstract

This paper argues that the failed attempt to introduce a mandatory board neutrality rule into EU takeover law was an object lesson that it is difficult to enact rules that are contrary to the corporate law cultures of the majority of the Member States. It provides an account of key factors that prevented enacting a mandatory board neutrality rule in the EU: varying takeover laws and practices; conflicting management and shareholder interests; divide between exhaustive and minimum harmonisation; and varying market orientation models. It argues that as long as there are varied national corporate laws, most EU corporate law rules are bound to remain categorised as optional, unimportant, or avoidable.