Good corporate governance

Accountability and liability are often mistreated as communicating vessels. Perhaps the public interest in controlling directors’ behaviour lies in the understanding that companies have a profound impact on the welfare and prosperity of individuals and nations. Legal interventions are believed to incentivise directors to maximise wealth creation and due care considerations in running the company’s affairs. ‘Behavioural law’; the analysis of legal rules from a perspective informed by insights about actual human behaviour is particularly promising in light of the fact that non-market behaviour is frequently involved.

Business decisions, typically, are highly constrained by actors in the political arena (institutions and/or stakeholders of the company), how a company is structured and in which industry a company operates. The research object is to explore empirically, who (when and by what means) determines directors’ accountability for business decisions, and normatively, who should be the authority to do so and why?

Research projects

In no other corporate context than a hostile takeover, sustainable value creation is so mercilessly challenged. Empirical findings show however that an increasing number of Dutch listed companies has incorporated sustainability as a statutory objective in their articles of association. Sustainability has also been adopted as a corporate governance principle in the amended Dutch Corporate Governance Code 2016. Moreover, in recent international hostile takeover attempts, boards of directors, such as Akzo Nobel and Unilever used sustainability arguments to resist takeover attempts.

When confronted with a hostile takeover conflict, judges may choose to include sustainability arguments in their decision making. However, little is known about “if”, and if so “how”, and “why” judges include sustainability arguments in their deliberations. Studies on how judges perceive sustainability and take this principle into account when considering the issue of corporate interest in a hostile takeover context, are non-existent. This research project addresses this omission and aims to significantly advance theoretical and legal understanding of the relevance of sustainability in business and legal decision making on hostile takeovers. Better understanding of the role of sustainability in judicial deliberations may contribute to further elaboration and integration of sustainability in the corporate governance framework.

Contact: Thy Pham, Jelle Nijland, Maaike Lycklema, Tim Verdoes

The Dutch legislator has undertaken efforts to protect the Dutch public interests as part of an adjusted state economic policy against takeovers that are undesirable from a societal perspective because of possible risks for national security or public order. Starting point of this project is an analysis with a company law focus of the proposed Bill on unwanted influence on telecommunication, that could serve as a format for a more general Act that would encompass other sectors of the Dutch economy.

Research: Jelle Nijland & Cees de Groot

This research investigates general terms and conditions (GTC) in light of international trade. It questions whether coherence is possible and desirable in the application of general terms and conditions. Special attention is given to the choice of forum clause, choice of law clause, arbitral agreements, and obligations arising from the United Nations Convention on Contracts for the International Sale of Goods (CISG). The aim of the research is to provide more legal certainty in the application of GTC in the patchwork of the aforementioned legal domains. The ultimate question whether it is possible to provide more legal certainty for companies and individuals, and therefore reduce the amount of disputes?

The Paradox of Being on the Glass Cliff: Why do Women Accept Risky Leadership Positions?

Glass cliff research has focused almost exclusively on organizational decision-makers. We aim to better understand the glass cliff phenomenon by incorporating the perspective of job seekers. Recent evidence from glass cliff research suggests that women are more willing than men to accept risky leadership positions. This multi-study paper aims to reveal and resolve the apparent paradox that women are more risk averse than men yet end up in risky leadership positions. In study I, risk attitudes of 125 participants were surveyed to understand gender differences in risk taking. In two experimental vignette studies, 119 university students (Study II) and 109 working adults (Study III) were offered a leadership position in either a risky or successful company and asked to rate their willingness to accept the job. Together, the results showed that although women are generally more risk averse than men, women who scored low on career self-efficacy were more likely to perceive a risky job as a promotional opportunity and were therefore more willing to accept such a job. These findings shed light on the role of women’s career decision-making in the glass cliff phenomenon.

Contact: Maral Darouei and Helen Pluut