European Company and Financial Law Review vol:8 issue:2 pages:199-234
Annual symposium ECFR location:Brussels date:1 October 2010
This article argues that a mandatory rule of at will revocability of company directors is typical of European civil law. The article shows that the rule is widely spread on the European continent, but not as a result of harmonization efforts of the European Union. Instead, the rule has its historical foundations in the early development of French law. It first appeared as a general rule in Napoleon’s codification of commercial law and subsequently extended to the other major jurisdictions in the French and German civil law family. Despite some tempering of the rule, especially in the German legal tradition, it still plays an important role in European civil law jurisdictions. In traditional common law, in contrast, the rule is extraneous. It did not appear in old common law, was merely a default rule when first introduced in the United Kingdom, and is still not mandatory in the United States. These novel findings shed important light on some other differences in company law, and possibly also in prevailing stock ownership structures, between civil law and common law jurisdictions, and thus lay a promising basis for further research.