Skip to main content

Advertisement

SpringerLink
Log in

The Legal Position of Parent Companies: A Top–Down Focus on Group Governance

  • Article
  • Published:
European Business Organization Law Review Aims and scope Submit manuscript

Abstract

Corporate groups have been the subject of much research and debate, but mostly focussing on the position of the controlled company, e.g. the subsidiaries. There has been less focus on the legal position of the parent company in a group and the position of stakeholders in the parent company. To remedy this situation, the article makes a comparative analysis of what duties parent companies have vis-à-vis their subsidiaries. It is shown that national law differs substantially but there is a duty to collect information about the subsidiaries, and a duty to oversee subsidiaries seems to be emerging. On the other hand, there is no duty to actively manage subsidiaries in most of the jurisdictions examined. Subsequently, a comparative analysis is made of the remedies available in national law to protect the interests of stakeholders in the parent companies. Whereas there are several rules on group law which prevent subsidiaries from being used to circumvent regulation aiming to protect stakeholders in the parent company and several rules ensuring transparency about the performance of the group, it is argued that there is a lack of rules ensuring transparency about intra-group transactions and rules ensuring the influence of shareholders in the parent company. Finally, it is argued that the ongoing harmonising of group law in the EU should also include aspects that clarify the position of parent companies in a group.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. See also Hopt (2018); Teichmann (2016).

  2. Some of the research taking a top–down approach to groups focuses on the enterprise approach where the parent company and the rest of the group are seen as one entity instead of a number of separate entities, see for instance the discussion by Teubner (1990); Antunes (1994), pp 212–228. This is not the subject of this article. Instead, the parent company and its subsidiaries are acknowledged as separate entities, and the focus is on the legal position of the parent company according to the rules applicable to that company. But as will be illustrated below in Sect. 2.2.2.2, the use of the enterprise approach may have implications for the duties of parent companies.

  3. I have examined the following jurisdictions: the EU, Denmark, Germany, and the UK. In dealing with German law, I have chosen not to include a discussion of what happens if there is a control contract (Beherrschungsvertrag) or other forms of group contracts. The reasons for this are twofold; first, such agreements fundamentally alter the rights and duties of the parent company and thus it would make little sense to compare these rules with the rules of jurisdictions that do not recognise these types of contracts. Second, these contracts are seldom used.

  4. Control may take different forms, but again to keep it simple, I will assume that the parent company owns a majority interest in the subsidiaries.

  5. Thus, the group structure and the control structure are aligned, which is not always the case in particular in large groups, see Hadden (1984).

  6. See COM (2012) 740, pp 14–15.

  7. See the Informal Company Law Expert Group (ICLEG) (2016).

  8. See the proposal from the Forum Europaeum on Company Groups (2015), the proposal of the EMCA Group (2017) for a European Model Company Act (EMCA), Chapter 15, and the proposal from the European Company Law Experts (2017). Although focusing on protecting stakeholders in subsidiaries, it should be noted that the latter report also mentions the problems facing stakeholders in parent companies.

  9. See also Teichmann (2017), pp 489 and 504 et seq.

  10. On the potential economic benefits from groups, see Takahashi (2010).

  11. See also the discussion of the optimal degree of autonomy in subsidiaries in Kima et al. (2005); Costello and Costello (2009-2010).

  12. There are exceptions as there may be a duty to notify or even launch a bid, see n. 15 below. In some jurisdictions shareholders (and in particular controlling shareholders like parent companies) may have a duty of loyalty and/or a duty not to abuse their influence imposed on them, but such a duty is not likely to impose on parent companies a duty to oversee or manage a subsidiary.

  13. See Mevorach (2013) and the overview in Gerner-Beuerle et al. (2013), pp 45–54.

  14. This is the possible consequence of the Chandler v. Cape plc judgment ([2012] EWCA Civ 525), the Vedanta Resources PLC judgment ([2019] UKSC 20) and other similar cases, see Petrin (2013); Petrin and Choudhury (2018). For the discussion of the possible direct liability in German law, see Schall (2018), and in Danish law, see Ulfbeck (2015).

  15. There are also some requirements imposed at S level that require the parent company to keep track of its investments in subsidiaries as, in particular, there may be a duty to notify major shareholdings or notify when a group relationship is formed. Thus, for listed companies in the EU, the Transparency Directive, Directive 2004/109/EC [2004] OJ L 390/38, later amended, Art. 9, requires that major shareholdings should be notified. Some countries, including Denmark, require such notification in all public companies, not only those that are listed. If control is required, multiple duties are triggered under the Takeover Directive, Directive 2004/25/EC [2004] OJ L 142/12. Also, under Danish law, a parent company has a duty to notify the subsidiary if a group is formed, see the Danish Companies Act § 134.

  16. In the EU, the rules on consolidated accounts are found in Directive 2013/34/EU [2013] OJ L 182/19. According to Art. 28(2), the notes of the accounts must set out information about the names and registered offices of the undertakings included in the consolidation and the proportion of the capital held in these undertakings.

  17. See Directive 2013/34/EU, Art. 29(2)(b).

  18. See the German Public Companies Act § 90(1).

  19. See the UK Financial Conduct Authority: Disclosure Guide and Transparency Rule sourcebook (DTR), 7.3.1, the Danish Companies Act § 139d(6), and the German Public Companies Act § 111c(4).

  20. The duty to inform about these transaction is found in DTR 7.3.8, the Danish Companies Act § 139d(2), and the German Public Companies Act § 111c(1).

  21. See Directive 2017/828 amending the Shareholder Rights Directive 2007/36/EC [2017] OJ L 132/1, Art. 9b(1)(c).

  22. See Art. 8aa introduced by Directive 2016/881/EU amending Directive 2011/16/EU [2016] OJ L 146/8. The obligation to present this report to the authorities applies to ‘Ultimate Parent Entity of an MNE Group’, a term defined in the Annex to the directive.

  23. See Directive 2013/34/EU as amended by Directive 2014/95/EU [2014] OJ L 330/1, Art. 29(1) and 29a(1).

  24. See the document entitled ‘Insolvency and Corporate Governance—Government response’, dated 26 August 2018, para. 1.11. Available at https://www.gov.uk/government/consultations/insolvency-and-corporate-governance.

  25. See COM (2012) 740, p 14.

  26. See the Report of the Reflection Group on the Future of EU Company Law, 5 April 2011, pp 68–75, and the later report from the Informal Group of Company Law Experts (ICLEG): ‘Report on Information on Groups’, March 2016. The latter, however, opens the door to more extensive disclosure as it recommends on page 13 that, ‘Stakeholders should be consulted whether any additional information should be included such as information on the subsidiaries’ functions in the group or on financial relationships within the group’.

  27. See also Macey (2019), p 40.

  28. See Martens (1995), p 570; von Schenck (2015), p 172.

  29. For a comparative overview, see also OECD (2020), pp 30–34.

  30. See von Schenck (2015), p 178; Schneider (2017a), p 217.

  31. See von Schenck (2015), p 178; Kleindiek (2009), p 801; Schneider (2017a), p 217. This seems to be underpinned by the German Corporate Governance Code last updated on 16 December 2019 which in Principle 4 now states, ‘A responsible management of risks arising from business activities requires an appropriate and effective internal control and risk management system’. An English version of the Code is available at https://www.dcgk.de//files/dcgk/usercontent/en/download/code/191216_German_Corporate_Governance_Code.pdf.

  32. See von Schenck (2015), p 172; Casper (2017), p 505.

  33. See Principle 5 of the German Corporate Governance Code from 16 December 2019, which states ‘The Management Board ensures that all provisions of law and internal policies are complied with, and endeavours to achieve their compliance by the enterprise’. The term ‘enterprise’ refers to the company and its ‘group entities’, see p 2 of the Code.

  34. So Habersack (2017); Schraud (2019); Verse (2011), p 413; Casper (2017); Arnold and Geiger (2018).

  35. See, inter alia, von Schenck (2015), p 179; Lutter (2011); Schneider and Schneider (2007); Grundmeier (2011).

  36. See Verse (2011), pp 415 et seq.; Casper (2017), p 503.

  37. Schneider (2017a), p 218.

  38. Schraud (2019), p 212.

  39. See LG München I, judgment of 10 December 2013 (5HKO 1387/10).

  40. For a discussion of the judgment, see Fleischer (2014); Hein (2014); Beck (2017).

  41. See LG Stuttgart, judgment of 19 December 2017 (31 0 33/16 KfH). See the comment by Mayer and Richter (2018).

  42. See also Sørensen (2017), p 37.

  43. See § 56(5) adopted by law no. 1060 from 1992.

  44. See the comments to § 130 in proposal L170 dated 25 March 2009.

  45. See also Søgaard and Werlauff (2015), p 122.

  46. The Danish Corporate Governance Code is not helpful as it does not address group governance at all.

  47. See the Financial Reporting Council (2014) Guidance on Risk Management, Internal Control and Related Financial and Business Reporting, para. 24, https://www.frc.org.uk/getattachment/d672c107-b1fb-4051-84b0-f5b83a1b93f6/Guidance-on-Risk-Management-Internal-Control-and-Related-Reporting.pdf.

  48. A few cases may indicate that there is a duty to supervise subsidiaries. Thus, one of the cases following the collapse of Barings Bank in 1995 dealt with the disqualification of some of the directors of Barings Bank. Eventually, they were disqualified because they had not done enough to monitor the subsidiary where Nick Leeson was actively trading. They had failed to impose risk limits and other measures to mitigate trading risks in the subsidiary, and they had also ignored some red flags. Since Leeson was trading in a subsidiary, the case seems to indicate that in some situations the duty to perform internal control and risk management also extends to subsidiaries. However, since the case concerned a bank where traditionally the directors’ duties have been more explicitly focused on the group, it may not be possible to draw general conclusions from this case. See Secretary of State for Trade and Industry v. Baker (No. 5) [1999] 1 BCLC 433, and Secretary of State for Trade and Industry v. Baker (No. 6) BCC 273. The cases are discussed in Moore and Petrin (2017), pp 220–222; Loughrey (2013).

  49. See, for instance, regarding Austria, Feltl (2010), and for Dutch law, Lennarts (2017). In the US, there have been a few cases which indicate that the directors’ duties also include some oversight of subsidiaries, see the overview given by Krus and Dupree (2018). These cases have been summarised as ‘episodic, resolutely factspecific, and generally limited to cases with extreme facts’, see Griffith (2016), p 2113.

  50. See already Schneider (1996).

  51. Capital Requirement Directive, Directive 2013/36/EU [2013] OJ L 176/338, Arts. 74 and 109. Insurance firms have a duty to set up internal control systems covering subsidiaries, see Directive 2009/138/EC [2009] OJ L 335/1, Art. 46(1), second sentence. See also Yasui (2016).

  52. See the fourth AML Directive, Directive 2015/849/EU [2015] OJ L 141/73, Art. 8.

  53. Loi, No. 2017-399, of 27 March 2017.

  54. Either those where the parent company has its head office in France and has more than 5,000 employees in the group, or these groups with more than 10,000 employees which have subsidiaries in France. See Art. L. 225-102-4.

  55. See Art. L. 225-102-4.

  56. See the new Art. L. 225-102-5.

  57. See Brabrant and Savourey (2017).

  58. According to the law, the plan should cover severe violations of human rights and fundamental freedoms, serious bodily injury, environmental damage, or health risks, see Art. L. 225-102-4.

  59. See Brabrant and Savourey (2017).

  60. The Commission announced its intent to legislate in this area at the end of May 2020, see the webinar available at https://responsiblebusinessconduct.eu/wp/2020/04/30/european-commission-promises-mandatory-due-diligence-legislation-in-2021/. Prior to this, the Commission had requested a study entitled ‘Study on due diligence requirements through the supply chain from BIICL, Civic Consulting and LSE’, published in January 2020. See BIICL, Civic Consulting and LSE (2020). There is also a draft report with recommendations to the Commission on corporate due diligence from the Parliament dated 11 September 2020, which includes a draft for a directive (available at https://www.europarl.europa.eu/doceo/document/JURI-PR-657191_EN.pdf).

  61. See the concern raised in the report ‘Improving accountability and access to remedy for victims of business-related human rights abuse: The relevance of human rights due diligence to determinations of corporate liability’, by the United Nations High Commissioner for Human Rights, dated 1 June 2018, in particular paras. 14-18.

  62. Thus, the UN is currently negotiating a legally binding instrument which may introduce requirements for undertakings to conduct human rights due diligence, see the draft for a legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises. State Parties should ensure that ‘business enterprises that undertake business activities of a transnational character’ undertake human rights due diligence covering their ‘own business activities, or from their business relationships’, see Art. 6 in the most recent proposal dated 6 August 2020. The term ‘business relationship’ should include subsidiaries (see the proposed Art. 1(5)). The draft is available at https://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session6/OEIGWG_Chair-Rapporteur_second_revised_draft_LBI_on_TNCs_and_OBEs_with_respect_to_Human_Rights.pdf.

  63. Directive 2019/1937 on the protection of persons who report breaches of Union law [2019] OJ L 305/17.

  64. See Szabó and Sørensen (2017).

  65. In addition to this, a parent company may be liable for the damages its subsidiaries may be required to pay for violations of EU competition law, see the Private Damages Directive, Directive 2014/104/EU [2014] OJ L 349/1, which uses the term ‘undertaking’ in Art. 1, and the recent judgment in Case C-724/17, Vantaan kaupunki, ECLI:EU:C:2019:204, which also relies on the concept of an undertaking when determining who must pay such damages.

  66. For a review of the cases, see Odudu and Bailey (2014); Burnley (2010); La Rocca (2011); Jones (2012); Cortese (2014); Hughes (2014); Leupold (2013); Leddy and Van Melkebeke (2019).

  67. See, among others, Case C-73/95 P, Viho Europe, ECLI:EU:C:1996:405, para. 51; Case 66/86, Ahmed Saeed Flugreisen, ECLI:EU:C:1989:140, para. 35; and Case 30/87, Bodson, ECLI:EU:C:1988:225, para. 19.

  68. Case C-97/08 P, Akzo Nobel NV, ECLI:EU:C:2009:536, para. 60; and Case C-179/12 P, Dow Chemical, ECLI:EU:C:2013:605, para. 56. In Case C-36/12 P, Armando Álvarez, ECLI:EU:C:2014:349, the Court applied the presumption where the parent company owned 98.6% of the share capital.

  69. However, the Court has insisted that the presumption can be rebutted; see Case C-97/08 P, Akzo Nobel NV, ECLI:EU:C:2009:536; and Case C-501/11 P, Schindler Holding, ECLI:EU:C:2013:522, para. 109. According to the judgment in the Akzo Nobel NV case, para. 77, the liability of the parent company cannot be regarded as strict liability, and thus there is no conflict with the principle of personal responsibility. According to the judgment in the Schindler Holding case, the fact that the presumption can be rebutted means that there is no conflict with Art. 6 of the European Convention on Human Rights regarding the right to a fair trial.

  70. See Case C-440/11 P, Stichting, ECLI:EU:C:2013:514.

  71. Case C-97/08 P, Akzo Nobel NV, ECLI:EU:C:2009:536, para. 58.

  72. Case C-480/09 P, AceaElectrabel Produzione SpA, ECLI:EU:C:2010:787, para. 51.

  73. Case C-501/11 P, Schindler Holding, ECLI:EU:C:2013:522, paras. 113-114.

  74. See also the arguments presented by Wardhaugh (2017). The existence of a compliance programme will not even be taken into account when setting the fine. The Commission states the following on its webpage, ‘The Commission welcomes and supports efforts by the business community to ensure compliance with EU competition rules. If an infringement is found, however, the mere existence of a compliance strategy will not be taken into consideration when setting the fine: the best reward for a good compliance strategy is not to infringe the law.’ (https://ec.europa.eu/competition/antitrust/compliance/index_en.html).

  75. See also Teichmann (2017), p 500.

  76. It is however a requirement that the bribing should be performed by the subsidiary in an effort intended to obtain or retain business or a business advantage for the parent company, see para. 42 of the Guidance dated March 2011 issued by the Ministry of Justice, available at http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf.

  77. See Principles 3-4 and 6 of the Guidance dated March 2011 (ibid.).

  78. For example, in the US, see A Resource Guide to the US Foreign Corrupt Practices Act prepared by the Department of Justice and SEC, dated 14 November 2012, pp 26 and 56 (available at https://www.documentcloud.org/documents/515229-a-resource-guide-to-the-u-s-foreign-corrupt.html) as well as the 2018 Guidelines Manual prepared by the US Sentencing Commission, para. 8.2.1 (available at https://www.ussc.gov/guidelines/2018-guidelines-manual-annotated). In Denmark, no rules have been implemented to the effect that parent companies are liable for bribery conducted by their subsidiaries. They will only be liable if the parent company is involved in the bribery, see the report by the OECD (http://www.oecd.org/daf/anti-bribery/Denmarkphase3reportEN.pdf) and Collet et al. (2015), pp 87–103. This state of affairs has been criticised in 2015 Transparency International, see http://transparency.dk/transparency-opfordrer-igen-den-danske-regering-til-at-sikre-en-meget-bedre-indsats-mod-bestikkelse-i-udlandet/.

  79. See the reference to the legally binding instrument in n. 62. It has also been argued that countries that are members of the European Convention on Human Rights may be under an obligation to allow for parent company liability in certain cases of human rights abuses in subsidiaries, see Liston (2020).

  80. See Burke et al. (2011).

  81. On the organisation of group governance in the Pirelli group, see Chiappetta and Tombari (2012).

  82. It differs to what extent the company law of different jurisdictions allows the majority shareholder to substitute the management, see the overview in Gerner-Beuerle et al. (2013), pp 23 et seq., grouping countries according to the level of ‘managerial insulation’.

  83. See Hommelhoff (1982).

  84. See Schneider (2017a), p 216.

  85. See Semler (2004), p 646; Schneider (2017a), p 216.

  86. Schneider (2017a), p 217.

  87. Martens (1995), p 570.

  88. See p 2 of the Code, supra n. 31.

  89. The provision is an implementation of what is now Art. 67 of the Codified Company Law Directive, Directive 2017/1132/EU [2017] OJ L 169/46.

  90. See the preparatory works for § 201 of the Danish Companies Act.

  91. See p 3 of the Code.

  92. The FRC: Guidance on Board Effectiveness, July 2018, does not give any guidance on how this new provision on groups should be understood. Available at https://www.frc.org.uk/getattachment/61232f60-a338-471b-ba5a-bfed25219147/2018-Guidance-on-Board-Effectiveness-FINAL.PDF. Also, it is difficult to establish the origin (and thereby the original intention) of the new provision as it was not part of the proposed revision suggested by the FCR in the 2017 consultation.

  93. Lindgren and Others v. L. & P Estates Ltd. [1968], Ch. 572.

  94. See Beck (2017b), p 49.

  95. See p 582 of the judgment.

  96. See also Farrar and Hannigan (1998), p 532.

  97. See the references in n. 14.

  98. Thus, the UK Supreme Court held in its judgment in Vedanta Resources PLC [2019] UKSC 20, para. 49: ‘Direct or indirect ownership by one company of all or a majority of the shares of another company (which is the irreducible essence of a parent/subsidiary relationship) may enable the parent to take control of the management of the operations of the business or of land owned by the subsidiary, but it does not impose any duty upon the parent to do so, whether owned to the subsidiary or, a fortiori, to anyone else.’

  99. For instance, under Danish law, a parent company may be regarded as a de facto director with the same liability as ordinary directors, see the Satair judgment by the Danish Supreme Court, Ugeskrift for Retvæsen 1997.364.

  100. For instance, in the UK, a parent company may be seen as a party to carrying on the subsidiary’s business with the intent to defraud its creditors within the fraudulent trading provision, see Farrar and Hannigan (1998), p 532.

  101. See, for instance, Chandler v. Cape ltd. [2012] 3 All ER 640. See also Hannigan (2018), and the literature mentioned in n. 14.

  102. Arguing for a duty to consider the interests of the group including the stakeholders in the subsidiaries, see Krieger (2015), p 232; Semler (2004), p 644; Schneider (2017b), p 285. For the opposite view—and for further references—see Schneider (2017a), p 217.

  103. See the reference to the newest version of the Code supra n. 31.

  104. See Section 172(2) and Hannigan (2018).

  105. See also Arnold and Haywood (2017), p 318; Birds et al. (2014), p 597, stating that directors owe their duties to the company, not to a holding or a subsidiary. Stakeholder engagement is also addressed in Principle D & E of the UK Corporate Governance Code 2018, but again, this does not allure to stakeholders in other group companies.

  106. See the document entitled ‘Insolvency and Corporate Governance—Government response’, dated 26 August 2018, para. 2.8.

  107. See para. 2.3 of the response, ibid.

  108. See para. 2.7 of the response.

  109. See Bunch and Christensen (2011), B 1-10, who only include the interests of shareholders and creditors. For a broader definition of relevant interests, see Werlauff (2019), pp 32–33. This broader approach seems to have been confirmed for listed companies by the Danish Corporate Governance Code, 2 December 2020, para. 2, that states, ‘It is the responsibility of the board of directors to safeguard the company’s and the shareholders’ interests with care and with due consideration for the investors and other stakeholders’.

  110. See the Danish Companies Act, § 141.

  111. See the preparatory works in the Folketingstidende 1979-80, supplement A, sp 4499.

  112. Similarly, Sofsrud (1999), pp 266–269.

  113. See Bunch and Whitt (2018), p 741; Andersen (1997), pp 604-606.

  114. See Hansen and Krenchel (2014), p 777; Sørensen (2015), p 294. Differently, Andersen (1997), pp 607-608.

  115. See the Informal Company Law Expert Group (ICLEG) (2016), pp 15-16, and Hausmann and Bechtold (2015).

  116. See Art. 92 of Directive 2013/36/EU [2013] OJ L 176/338.

  117. See the EBA: Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No. 575/2013, July 2016, paras. 65-74 and para. 106.

  118. See paras. 82 and 84 of the EBA: Guidelines on internal governance, 21 March 2018.

  119. The EBA states, ‘A consolidating institution should consider the interests of all its subsidiaries, and how strategies and policies contribute to the interest of each subsidiary and the interest of the group as a whole over the long term.’ See para. 85, ibid.

  120. See Informal Company Law Expert Group (ICLEG) (2016), pp 15-16. The report also argues that a recognition of the interests of the group can be implied in the Banking Recovery and Resolution Directive, Directive 2014/59/EU [2014] OJ L173/190, as it facilitates intra-group financial support.

  121. This is for instance the case with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, see Szabó and Sørensen (2017).

  122. See also the report by Schutter et al. (2012), p 51.

  123. See Arts. 19(a) and 29a(1) of the Directive.

  124. See Art. 29a(1) of Directive 2013/34/EU as amended by Directive 2014/95/EU [2014] OJ L 330/1.

  125. An exception, however, are the rules imposed on subsidiaries to protect the parent company, see below in Sect. 3.1.

  126. However, in the EU, this may constitute a restriction on the freedom of establishment and therefore needs to be justified according to the Gebhard test.

  127. See the comparative overview in Manz and Mayer (2015); Szabó and Sørensen (2017); OECD (2020). In multiple Member States of the EU, it is an expressly stated legal requirement or generally accepted business practice not to disclose the business secrets of undertakings to any external parties, see Gerner-Beuerle et al. (2013).

  128. See the overview by the Informal Company Law Expert Group (ICLEG) (2016).

  129. It is not only in company law that we find different approaches to the management of subsidiaries. In the regulation of financial institutions, different approaches may be taken depending on whether the parent company or the subsidiary is the focus of regulation. Even though the EU regulation favours an approach where parent companies should impose group policies, some jurisdictions may take the approach that local subsidiaries should not be subject to a group policy, and consequently they ‘ring-fence’ them to ensure that they are not influenced by parent companies. See Wetzer (2018).

  130. Such internal clashes are seen in the area of banking, see, for Germany, Weber-Rey and Gissing (2014), and for Denmark, Sørensen and Vindfeldt (2019).

  131. For instance, the Danish rules cannot give foreign subsidiaries the right to provide information to their Danish parent company. The Danish legislators were aware of this, but nevertheless suggested that the information may be obtained from a foreign subsidiary if the parent company exercises its influence over the subsidiary in order to get the information, see Government Report (Betænkning) 1498/2008, p 922. In this case, the information is not obtained just because there is a right but because the parent company de facto can!

  132. Kleindiek (2009), p 794; Grundmeier (2011), p 126; Schraud (2019), p 214.

  133. See, for instance, the Commission’s guidelines on anti-money laundering, Regulation 2019/758/EU [2019] L 125/4, recital 3-4 (on group-wide AML policies), the Commission’s Recommendation 2019/1318 on dual-use trade controls under Council Regulation (EC) No. 428/2009 [2019] OJ L 205/15, p 5 (Internal Compliance Programmes), EBA Guidelines on internal governance, 21 March 2018, paras. 83 and 87 (group-wide governance policy).

  134. See also the discussion in Sherman (2018).

  135. However, in practice, there may be several barriers to pursuing such a liability claim at P level. When mistakes are made in governing subsidiaries, it is normally the subsidiary, which has suffered a loss, and the loss of the parent company is only reflective. This may make it easier to pursue a claim at S level instead of at P level. But it may also be argued that the loss caused by the management of the parent company results in the lessening of the value of the shareholding in the subsidiary in which case it is not a reflective loss. Another problem may be that there can be several culprits as aside from the mistake made by the management of the parent company, the management of the subsidiary may also have made a mistake (being passive).

  136. This is clear when the construction of de facto directors is used or where there is direct parent liability. The possibility of piercing the veil is seldom used in the three jurisdictions, but even in jurisdictions where the construction is used more frequently, something more is required than only the exercise of control, see for instance on US law, Matheson (2009), pp 1125–1128.

  137. Maybe not under German law where there may be a duty to consider the interests of the group, see above in Sect. 2.3.1.2.

  138. In fact, when looking at the group-related rules introduced in Denmark, the protection of stakeholders in the parent company was and still is the main reason for these rules, see Sørensen (2018).

  139. See, for instance, the rules applicable to public companies in the EU according to the consolidated company law directive, Directive 2017/1132 [2017] OJ L 169/46, Art. 67.

  140. Thus, the restrictions on financial assistance also apply to indirect assistance, which will normally cover assistance from subsidiaries, see expressly the UK Companies Act, Section 678(1), and the Danish Companies Act, § 210(1). The restrictions on loans to directors are not imposed by EU law, but in those jurisdictions where such restrictions are found, they also often apply to indirect loans granted through subsidiaries, see the Danish Companies Act, § 210(1), the UK Companies Act, Sections 197(3) and 198(3), and German Public Companies Act § 89(2).

  141. In the EU, the rules are now found in the Accounting Directive, Directive 2013/34/EU [2013] OJ L 182/19.

  142. For a discussion of the purpose of the consolidated statement, see Grundmann (2012); Flint (1993).

  143. The risk that management was trying to trigger a larger bonus was one of the reasons for introducing the Danish rules on consolidated accounts, see Sørensen (2018), p 101.

  144. See Directive 2014/95/EU amending the Accounting Directive, Directive 2013/34/EU, with rules on consolidated non-financial reports, the country-by-country reporting requirements introduced by Directive 2016/881/EU [2016] OJ L 146/8 (taxation).

  145. The Informal Company Law Expert Group (ICLEG): ‘Report on Information on Groups’, March 2016, p 11, only points out that investors in the parent company benefit from such an overview. However, those trading with the group and also employees may find the information useful. The proposal also aims to protect stakeholders in the subsidiaries. On the dual aim of this disclosure, see Hommelhoff (2017).

  146. This is the case in both Germany and Denmark. See the German Public Companies Act, § 131, and the Private Companies Act, § 51a, and further Krieger (2015), pp 246-249. See the Danish Companies Act, § 102(1), second sentence. The right to ask questions in listed companies according to the Shareholder Rights Directive, Directive 2007/36/EC [2007] OJ L 184/17, Art. 9, is more limited as it only relates to the items on the agenda of the particular meeting. For certain items, this may include issues relating to subsidiaries, but the provision does not grant a general right to ask about the subsidiaries.

  147. According to German law, the shareholder requiring the investigation only needs to control 1% of the capital or nominally EUR 100,000, see the German Public Companies Act, § 142(2) and § 315. In Denmark, at least 25% of the shareholders should vote in favour thereof, see the Danish Companies Act, § 151. In the UK, the Secretary of State may appoint one or more inspectors to investigate a company and, if necessary, this may include other companies in the group, see Sections 431 and 433 of the 1985 Companies Act. An investigation may be requested by shareholders who own at least 10% of the company’s shares, or alternatively by 200 shareholders.

  148. For instance, according to the EU Transparency Directive 2004/109/EC [2004] OJ L 390/38, Art. 6(1), the management’s statement should include information on material events that affect not only the company but also controlled undertakings. Also, the duty to publish insider information according to the market abuse regulation, Regulation 596/2014 [2014] OJ L 173/1, Art. 17(1), may also cover information about events taking place in subsidiaries, see Veil (2017).

  149. See Directive 2009/38/EC [2009] OJ L 122/28. In some jurisdictions, the employees may be represented on the board of the parent company, and thus gain an insight into the workings of the group.

  150. See Directive 2017/828 amending Directive 2007/36/EC [2017] OJ L 132/1 as regards the encouragement of long-term shareholder engagement.

  151. See the references above in nn. 19-20.

  152. The definition of a related party in the EU Accounting Directive 2013/34/EU [2013] OJ L 182/19 includes transactions between a parent company and its subsidiaries.

  153. See the Shareholder Rights Directive, Art. 9c(6)(a).

  154. See the Danish Companies Act, § 139d(5)(1), proposal for the German Public Companies Act, § 111a(3)(1), and the Financial Conduct Authority: Disclosure Guidance and Transparency Rules sourcebook, 7.3.5.

  155. See also Hansmann and Squire (2018), pp 263-265. In general, the concern which creditors may have about the transfer of assets between companies in a group was raised in the recent consultation performed in the UK under the heading ‘Insolvency and Corporate Governance’. On p 11 of the government response dated 26 August 2018 it says, ‘A number of respondents, even those who opposed stronger measures, recognised the advantages of increased transparency, for example where suppliers could be notified when assets are transferred from a subsidiary to other parts of the group given the potential impact on the trading position, credit rating and stability of the contractual arrangements in place.’

  156. See also the European Company Law Experts (2017), p 44, ‘A proposal for reforming group law in Europe’, who suggest that rules on related party transactions include transactions with wholly owned subsidiaries, mainly to protect creditors in the latter.

  157. Thus, according to the Commission’s proposal COM(2014) 213, p 9, ‘In order to target only transactions that could be most disadvantageous for minority shareholders and to keep administrative burden limited Member States should be allowed to exclude transactions entered into between the company and members of its group that are fully owned by the listed company.’ It was only later that the exemption was extended to include partially owned subsidiaries.

  158. In fact, the impact assessment made for the proposed amendment of the Shareholder Rights Directive did not attempt to make such a balancing, see SWD 2014, 127.

  159. See the German Public Companies Act, § 312.

  160. This will be the case even though it differs from jurisdiction to jurisdiction how much influence shareholders have on the activities of the company.

  161. In Japan, this problem has been discussed under the heading ‘Forfeiture of shareholders’ rights’, see Ueda (2016), p 230.

  162. However, the regulation of a company’s acquisition of its own shares addresses an issue that affects the influence of shareholders in a parent company. As mentioned above, the rules on a company’s acquisition of its own shares are extended to cover acquisitions by subsidiaries. The main aim of these rules are to protect the capital of the parent company, but another aspect of the rules is to protect the influence of shareholders in the parent company. Thus, the rules ensure that the subsidiaries cannot vote on the shares they hold in the parent company. Consequently, the parent company’s management may not indirectly influence the voting at the general meeting of the parent company. See Directive 2017/1132 [2017] OJ L 169/46, Arts. 63(1)(a) and 67(1).

  163. See the German Public Companies Act, § 179a.

  164. This is the result of the famous judgment in Holzmüller, BGH judgment from 25 February 1982 (BGHZ 83, 122), see Stephan (2015), pp 102-103; Buxbaum (1983); Löbbe (2004). According to the former authors, it is unclear whether the line of cases also requires that the sale and acquisition of subsidiaries may require approval.

  165. Thus, under Danish law, the object stated for the parent company should also cover the type of activity performed in the subsidiary. If that is not the case, the object and consequently the articles of association need to be amended, see the Supreme Court case UfR 1966.31H. The same appears to be the case under German law, where it may also be required that the articles of the parent company allow the company to run (part of) its business through subsidiaries, see the discussion by Stephan (2015), pp 100-101, and Semler (2004), p 641. Under UK law, companies no longer need to state their object; see the UK Companies Act, Section 31.

  166. For instance, according to German law, it is possible to insert provisions in the articles of association to the effect that certain transactions in the company require the consent of the supervisory board. If such a reservation is inserted in the articles of a parent company, it has the effect that the supervisory board should give its consent not only to decisions contemplated in the company, but also when contemplated in subsidiaries, see Schneider (2017b), pp 283-284. According to Danish law, the managing director should refer to the board’s decisions that are unusual or of great importance for the company, see the Danish Companies Act, § 117 (‘af usædvanlig art eller stor betydning’). The board may stipulate in the rules of procedure that this includes unusual or important decisions affecting the subsidiaries. If this is not stipulated, it is doubtful whether the law presumes that the management should refer important decisions involving its subsidiaries to the board. There is nothing in the law or case law that indicates this, and the issues do not seem to be addressed in the literature. However, if the managing director is making such decisions affecting subsidiaries, it would seem to be contrary to the intention of the law not to present these decisions to the board, and therefore there must be a duty to do so. If, on the other hand, the managing director does not make decisions on behalf of the subsidiaries, there is no such duty.

  167. As explained, the implementation in Denmark, Germany, and the UK also includes transactions between a party related to a listed parent company and a subsidiary. The amended Shareholder Rights Directive allowed the Member States to choose between a solution where certain transactions require either the approval of the board of the listed company or of the shareholders. All three countries chose the former solution.

  168. See Krieger (2015), pp 245-246.

  169. See the UK Companies Act, Section 190(2).

  170. See the UK Companies Act, Section 197(2), and similarly for quasi-loans in public companies, see Section 198(3).

  171. It may even be possible for the shareholders to bring a claim against the director of a sub-subsidiary called a ‘multiple derivative claim’.

  172. See Hannigan (2018), p 555; Peters (2017), pp 565-567, both with reference to relevant cases.

  173. Thus, such actions are possible in a number of other common law jurisdictions, see the references in Tsang (2019). Also, they were made possible in Japan by a reform adopted in 2014, see Ueda (2016).

  174. See nn. 7-8.

  175. See the Informal Company Law Expert Group’s (ICLEG) (2016), pp 32-34 (focusing on the management of financial institutions), and pp 38-40 (focusing on the proposal for a Common Consolidated Corporate Tax Base). See also Teichmann (2017), p 500.

  176. See also Chiappetta and Tombari (2012), p 273, who call for a definition of the general principle for ‘proper management’ that the parent company must observe.

  177. If, for instance, the parent company has to decide whether to support a subsidiary which is on the brink of insolvency, it may be in the interest of the group to do so, but not in the interest of the parent company. See also Chiappetta and Tombari (2012), p 273, who call for a clarification of the parent companies’ duties in this case. The issue has already proven to be subject to incoherent case law in Japan, see Ueda (2016). For a suggestion to reformulate the doctrine of wrongful trading to solve some of these issues, see Mevorach (2013).

  178. The harmonisation at S level is likely to protect the interests of minority shareholders and creditors in the subsidiary, but not other stakeholders like the employees, the local community, the environment, etc. The latter could still be neglected if the predominant norm is that of the interest of the parent company.

  179. See the Report of the Reflection Group on the Future of EU Company Law, 5 April 2011, p 60.

  180. Ibid., p 63.

  181. See nn. 7-8 above. However, the issue of how a parent company should handle the distress of a subsidiary has been addressed by the EMCA Group’s proposal; see section 15.17 of the proposal (EMCA Group 2017).

  182. See above in n. 11.

  183. See the Informal Company Law Expert Group (ICLEG) (2016), p 29, and the Report of the Reflection Group on the Future of EU Company Law, 5 April 2011, p 61.

References

  • Andersen PK (1997) Studier i dansk koncernret, 1st edn. Jurist- og Økonomforbundet, Copenhagen

    Google Scholar 

  • Antunes JE (1994) Liability of corporate groups. Kluwer Law and Taxation Publishers, Deventer, Boston

    Google Scholar 

  • Arnold M, Haywood M (2017) Duty to promote the success of the company. In: Mortimore S (ed) Company directors duties, liabilities and remedies, 3rd edn. Oxford University Press, Oxford, Chapter 12

  • Arnold M, Geiger J-D (2018) Haftung für Compliance-Verstösse im Konzern. Betriebs-Berater 73:2306–2312

    Google Scholar 

  • Beck L (2017) Konzernrechtfür die Konzernwirklichkeit. Die Aktiengesellschaft 62:726–740. https://doi.org/10.9785/ag-2017-2006

    Article  Google Scholar 

  • Beck L (2017) Leitung und Haftung im Recht der Unternehmensgruppe im Vereinigten Königreich. In: Hommelhoff P et al (eds) Corporate Governance im Grenzüberschreitenden Konzern. De Gruyter, Berlin, pp 19–67

    Google Scholar 

  • BIICL, Civic Consulting and LSE (2020) Study on due diligence requirements through the supply chain. https://op.europa.eu/en/publication-detail/-/publication/8ba0a8fd-4c83-11ea-b8b7-01aa75ed71a1/language-en. Accessed 14 Jan 2021

  • Birds J et al (2014) Boyle and Birds’ company law, 9th edn. Jordan Publishing Limited, Bristol

    Google Scholar 

  • Brabrant S, Savourey E (2017) A closer look at the penalties faced by companies. Revue Internationale de la Compliance et de l’Éthique des Affaires—Supplément à la Semaine Juridique Enterprise et Affaires, No 50

  • Bunch L, Christensen JS (2011) Selskabets interesse—navnlig i lyset af selskabslovens generalklausul. Ugeskrift for Retsvæsen, 145 B 1–10

  • Bunch L, Whitt SC (2018) Selskabsloven med kommentarer, 3rd edn. Karnov Group, Copenhagen

    Google Scholar 

  • Burke RJ et al (2011) Corporate reputation: managing opportunities and threats. Gower Publishing, Farnham

    Google Scholar 

  • Burnley R (2010) Group liability for antitrust infringements: responsibility and accountability. World Compet 33:595–614

    Article  Google Scholar 

  • Buxbaum RM (1983) Extension of parent company shareholders’ rights to participate in the governance of subsidiaries. Am J Comp Law 31:511–519

    Article  Google Scholar 

  • Casper M (2017) Corporate governance and corporate compliance. In: du Plessis JJ et al. German corporate governance in international and European context, 3rd edn. Springer, Berlin, Heidelberg, pp 478–512

  • Chiappetta F, Tombari U (2012) Perspectives on group corporate governance and European company law. Eur Comp Fin Law Rev 9:261–274. https://doi.org/10.1515/ecfr-2012-0261

    Article  Google Scholar 

  • Collet CC et al (2015) Anti-korruption i et M&A-perspektiv. Revision og Regnskabsvæsen 9:87–103

    Google Scholar 

  • Cortese B (2014) Piercing the corporate veil in EU competition law: the parent subsidiary relationship and antitrust liability. In: Cortese B (ed) EU competition law: between public and private enforcement. Wolters Kluwer, Alphen aan den Rijn, pp 73–93

    Google Scholar 

  • Costello AO, Costello TG (2009-2010) Aligning the interests of subsidiaries and headquarters in multinational corporations: emperical evidence. Multinatl Bus Rev 17:163–203

  • EMCA Group (2017) European Model Company Act. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2929348. Accessed 14 Jan 2021

  • European Company Law Experts (2017) A proposal for reforming group law in Europe. Eur Bus Organ Law Rev 18:1–49

    Article  Google Scholar 

  • Farrar JH, Hannigan BM (1998) Farrar’s company law, 4th edn. Butterworths Law, London

    Google Scholar 

  • Feltl C (2010) Corporate Compliance in österreichischen Recht—Ein Überblick. Zeitschrift für österreichisches und Europäisches Wirtschaftsrecht 24:265–272

    Google Scholar 

  • Fleischer H (2014) Aktienrechtliche Compliance-Pflichten im Praxistest: Das Siemens/Neubürger-Urteil des LG München I. Neue Zeitschrift für Gesellschaftsrecht 17:321-329

    Google Scholar 

  • Flint D (1993) A true and fair view in consolidated accounts. In: Gray SJ, et al (eds) International group accounting. Issues in European harmonisation, 2nd edn. Routledge, Abingdon, pp 11--31

  • Forum Europaeum on Company Groups (2015) Proposal to facilitate the management of cross-border company groups in Europe. Eur Comp Fin Law Rev 12:299–306

    Google Scholar 

  • Gerner-Beuerle C et al (2013) Study on directors’ duties and liability in the EU. LSE Enterprise Limited, London. http://eprints.lse.ac.uk/50438/. Accessed 14 Jan 2021

  • Griffith SJ (2016) Corporate compliance in an era of compliance. William Mary Law Rev 57:2075–2140

    Google Scholar 

  • Grundmann S (2012) European company law, 2nd edn. Intersentia, Cambridge

    Google Scholar 

  • Grundmeier CE (2011) Rechtsplicht zur Compliance im Konzern, 1st edn. Carl Heymanns Verlag, Köln

    Google Scholar 

  • Habersack M (2017) Gedankenzum konzernweiten Compliance-Verantwortung des Geschäftsleiters eines herrschenden Unternehmen. In: Hommelhoff P et al (eds) Corporate Governance im Grenzüberschreitenden Konzern, 1st edn. De Gruyter, Berlin, pp 269–290

    Google Scholar 

  • Hadden T (1984) Inside corporate groups. Int J Sociol Law 12:271–286

    Google Scholar 

  • Hannigan B (2018) Company law, 5th edn. Oxford University Press, Oxford

    Google Scholar 

  • Hansen SF, Krenchel JV (2014) Dansk selskabsret 2, 4th edn. Karnov Group, Copenhagen

    Google Scholar 

  • Hansmann H, Squire R (2018) External and internal asset partitioning: corporations and their subsidiaries. In: Gordon JN, Ringe W-G (eds) Oxford handbook of corporate law and governance, 1st edn. Oxford University Press, Oxford, pp 251–274

    Google Scholar 

  • Hausmann Y, Bechtold E (2015) Corporate governance of groups in an era of regulatory nationalism: a focused analysis of financial services regulation. Eur Comp Fin Law Rev 12:341–371. https://doi.org/10.1515/ecfr-2015-0341

    Article  Google Scholar 

  • Hein O (2014) Managerhaftung wegen mangelnder Compliance. Board 2014(4):178–181

    Google Scholar 

  • Hommelhoff P (1982) Die Konzernleitungspflicht. Heymann, Cologne

    Google Scholar 

  • Hommelhoff P (2017) Struktur- und Transaktionsberichte in der grenzüberschreitenden Unternehmensgruppe. In: Siekmann H (ed) Festschrift für Theodor Baums, vol 1. Mohr Siebeck, Heidelberg, pp 597–611

    Google Scholar 

  • Hopt KJ (2018) Groups of companies: a comparative study of the economic law, and regulation of corporate group. In: Gordon JN, Ringe W-G (eds) Oxford handbook of corporate law and governance. Oxford University Press, Oxford, pp 603–633

    Google Scholar 

  • Hughes P (2014) Competition law enforcement and corporate group liability—adjusting the veil. EurCompetit Law Rev 35:68–87

    Google Scholar 

  • Informal Company Law Expert Group (ICLEG) (2016) Report on the recognition of the interest of the group. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2888863. Accessed 14 Jan 2021

  • Jones A (2012) The boundaries of an undertaking in EU competition law. Eur Comp J 8:301–331

    Article  Google Scholar 

  • Kima B et al (2005) Differentiated governance of foreign subsidiaries in transnational corporations: an agency theory perspective. J Int Manag 11:43–66

    Article  Google Scholar 

  • Kleindiek D (2009) Konzernstructuren und Corporate Governance: Leitung und Überwachung im dezentral organisierten Unternehmensverbund. In: Hommelhoff P et al (eds) Handbuch corporate governance, 2nd edn. Schäffer-Poeschel, Stuttgart, pp 787–823

    Google Scholar 

  • Krieger G (2015) Überwachung durch den Aufsichtsrat und die Gellschafter der Holding. In: Bayer W, Lutter M (eds) Holding-Handbuch. Otto Schmidt, Cologne, pp 209–249

  • Krus C, Dupree D (2018) Subsidiary oversight—an evolving standard of care for directors? pp 12–15. https://us.eversheds-sutherland.com/NewsCommentary/Articles/211984/Subsidiary-oversight-an-evolving-standard-of-care-for-directors. Accessed 14 Jan 2021

  • La Rocca L (2011) The controversial issue of the parent company liability for the violation of EC competition rules by the subsidiary. Eur Comp Law Rev 32:68–76

    Google Scholar 

  • Leddy M, Melkebeke AV (2019) Parental liability in EU competition law. Eur Comp Law Rev 40:407–415

    Google Scholar 

  • Lennarts L (2017) Rechtliche Aspekte der Gruppenführung in den Niederlanden. In: Hommelhoff P et al (eds) Corporate Governance im grenzüberschreitenden Konzern. De Gruyter, Berlin, pp 121–148

    Google Scholar 

  • Leupold B (2013) Effective enforcement of EU competition law gone too far? Recent case law on the presumption of parental liability. Eur Comp Law Rev 34:570–582

    Google Scholar 

  • Liston G (2020) Parent company liability and the European Convention on Human Rights—an analysis from the perspective of English law. Eur Bus Law Rev 31:819–844

    Article  Google Scholar 

  • Loughrey J (2013) The director’s duty of care and skills and the financial crisis. In: Loughrey J (ed) Directors’ duties and shareholder litigation in the wake of the financial crisis. Edward Elgar Publishing, Cheltenham, pp 12–49

    Google Scholar 

  • Lutter M (2011) Konzernphilosophie vs. konzernweite Compliance und konzernweite Risikomanagement. In: Habersack M, Hommelhoff P (eds) Festschrift für Wulf Goette zum 65. Geburtstag. CH Beck, Munich, pp 289–298

  • Löbbe M (2004) Corporate groups: competences of the shareholders’ meeting and minority protection—the German Federal Court of Justice’s recent Gelatine, Macrotron Cases redefine the Holzmüller doctrine. German Law J 5:1057–1079

    Article  Google Scholar 

  • Macey JR (2019) The central role of political myth in corporate law. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3435676. Accessed 14 Jan 2021

  • Manz G, Mayer B (2015) Gesellschaftliche Herausforderungen im internationalen Konzern. Internationales Steuer- und Wirtschaftsrecht 529-538

  • Martens KP (1995) Der Aufsichtsrat im Konzern. Zeitschrift für das Gesamte Handelsrecht und Wirtschaftsrecht 159:567–592

    Google Scholar 

  • Matheson JH (2009) The modern law of corporate groups: an empirical examination of piercing the corporate veil in the parent-subsidiary context. North Carolina Law Rev 87:1091–1156

    Google Scholar 

  • Mayer BR, Richter V (2018) Konzerndimensionale Auskunfts- und Überwachungspflichten der Obergesellschaft bei Rechtsverstössen der Tochtergesellschaft. Die Aktiengesellschaft 63:220–227

    Article  Google Scholar 

  • Mevorach I (2013) The role of enterprise principles in shaping management duties at times of crisis. Eur Bus Organ Law Rev 14:471–496

    Article  Google Scholar 

  • Moore M, Petrin M (2017) Corporate governance; law regulation and theory. Palgrave Corporate & Financial Law, London

    Google Scholar 

  • Odudu O, Bailey D (2014) The single economic entity doctrine in EU competition law. Common Market Law Rev 51:1721–1758

    Article  Google Scholar 

  • OECD (2020) Duties and responsibilities of boards in company groups. https://www.oecd.org/publications/duties-and-responsibilities-of-boards-in-company-groups-859ec8fe-en.htm. Accessed 14 Jan 2021

  • Peters G (2017) Members’ personal and derivative claims. In: Mortimore S (ed) Company directors; duties, liabilities, and remedies, 3rd edn. Oxford University Press, Oxford, Chapter 22

  • Petrin M (2013) Assumption of responsibility in corporate groups: chandler v Cape plc. Modern Law Rev 76:603–619

    Article  Google Scholar 

  • Petrin M, Choudhury B (2018) Group company liability. Eur Bus Organ Law Rev 19:771–796

    Article  Google Scholar 

  • Schall A (2018) Die Mutter-Verantwortlichkeit für Menschenrechtsverletzungen ihrer Auslandstöchter. Zeitschrift für Unternehmens- und Gesellschaftsrecht 47:480–512

    Article  Google Scholar 

  • Schneider SH (2017a) Vorstands- und Geschäftsführerhaftung im Konzern. In: Krieger G et al (eds) Handbuch Managerhaftung: Vorstand Geschäftsführer Aufsichtsrat. Pflichten und Haftungsfolgen. Typische Risikobereiche. Otto Schmidt, Cologne, pp 210–245

  • Schneider UH (1996) Die Überlagerung des Konzernrechts durch öffentlich-rechtliche Strukturnormen und Organisationspflichten. Zeitschrift für Unternehmens- und Gesellschaftsrecht 25:225–246

    Article  Google Scholar 

  • Schneider UH (2017b) Aufsichtsratshaftung im Konzern. In: Krieger G et al (eds) Handbuch Managerhaftung: Vorstand Geschäftsführer Aufsichtsrat. Pflichten und Haftungsfolgen. Typische Risikobereiche. Otto Schmidt, Cologne, pp 273–295

  • Schneider UH, Schneider SH (2007) Konzern-Compliance als Aufgabe der Konzernleitung. Zeitschrift für Wirtshaftsrecht, pp 2061–2065

  • Schraud A (2019) Compliance in der Aktiengesellschaft. Nomos, Baden-Baden

    Book  Google Scholar 

  • Schutter OD et al (2012) Human rights due diligence: the role of states. http://humanrightsinbusiness.eu/wp-content/uploads/2015/05/De-Schutter-et-al.-Human-Rights-Due-Diligence-The-Role-of-States.pdf. Accessed 14 Jan 2021

  • Semler J (2004) Die Rechte und Pflichten des Vorstands einer Holdinggesellschaft im Lichte der Corporate Governance-Diskussion. Zeitschrift für Unternehmens- und Gesellschaftsrecht 33:631–668

    Article  Google Scholar 

  • Sherman JF (2018) Should a parent company take a hands-off approach to the human rights risks of its subsidiaries? Bus Law Int 19:23–36

    Google Scholar 

  • Sofsrud T (1999) Bestyrelsens beslutning og ansvar. Djøf Forlag, Copenhagen

    Google Scholar 

  • Stephan K-D (2015) Entstehung der Holding. In: Lutter M, Bayer W (eds) Holding-Handbuch. Otto Schmidt, Cologne, pp 40–110

    Google Scholar 

  • Szabó DG, Sørensen KE (2017) Non-financial reporting, CSR frameworks and groups of undertakings: application and consequences. J Corp Law Stud 17:137–165

    Article  Google Scholar 

  • Søgaard G, Werlauff E (2015) Koncernretten. Werlauff Publishing, Herning

    Google Scholar 

  • Sørensen KE (2015) Selskabsstrukturer. Jurist og Økonomforbundet, Copenhagen

    Google Scholar 

  • Sørensen KE (2017) Nybrud i koncernretten. Ugeskrift for Retsvæsen B 29-38

  • Sørensen KE (2018) Koncerner og selskabslovgivningen—et tilbageblik over den hidtidige koncernregulering, og et bud på de fremtidige udfordringer. Hansen JL, Selskabsloven: de første 100 år. DJØF Publishing, Copenhagen, pp 99–120

    Google Scholar 

  • Sørensen R, Vindfeldt M (2019) Koncernstyring i banker: plads til forbedring? Nordisk Tidsskrift for Selskabsret 3:33–43

    Google Scholar 

  • Takahashi E (2010) Market-organization-corporate groups: an economic analysis of the law of corporate groups. J Interdiscip Econ 22:45–71

    Article  Google Scholar 

  • Teichmann C (2016) Towards a European framework for cross-border group management. Eur Comp Law 13:150–157

    Article  Google Scholar 

  • Teichmann C (2017) Die grenzüberschreitende Unternehmensgruppe im Compliance-Zeitalter. Zeitschrift für Unternehmens- und Gesellschaftsrecht 46:485–508. https://doi.org/10.1515/zgr-2017-0021

    Article  Google Scholar 

  • Teubner G (1990) Unitas multiplex: corporate governance in group enterprises. In: Sugerman D, Teubner G (eds) Regulating corporate groups in Europe. Nomos, Baden-Baden, pp 67–104

    Google Scholar 

  • Tsang KF (2019) International multiple derivative actions. Vand J Transnatl Law 52:75–119

    Google Scholar 

  • Ueda J (2016) Directors’ duties and liability in corporate groups: a Japanese perspective. Eur Bus Law Rev 27:223–241

    Article  Google Scholar 

  • Ulfbeck V (2015) Virksomheders privatretlige erstatningsansvar for overholdelse af menneskerettigheder i udlandet. Erhvervsretlig Tidsskrift 315–319

  • Veil R (ed) (2017) European capital market law, 2nd edn. Hart Publishing, Oxford

    Google Scholar 

  • Verse DA (2011) Compliance im Konzern, Zur Legalitätskontrollpflicht der Geschäftsleiter einer Konzernobergesellschaft. Zeitschrift für das Gesamte Handelsrecht und Wirtschaftsrecht 175:401–424

    Google Scholar 

  • von Schenck K (2015) Überwachung durch den Vorstand der Holding. In: Lutter M, Bayer W (eds) Holding-Handbuch, 5th edn. Otto Schmidt, Cologne, pp 156–184

    Google Scholar 

  • Wardhaugh B (2017) Punishing parents for the sins of their child: extending EU competition liability in groups and to subcontractors. J Antitrust Enforce 5:22–48

    Google Scholar 

  • Weber-Rey D, Gissing E (2014) Gruppen-Governance—das Gruppeninteresse als Teil des internen Governance-Systems im Finanzsektor. Die Aktiengesellschaft 59:864–891

    Google Scholar 

  • Werlauff E (2019) Selskabsret, 11th edn. Karnov Group, Copenhagen

    Google Scholar 

  • Wetzer T (2018) In two minds: the governance of ring-fenced banks. J Corp Law Stud 19:197–249

    Article  Google Scholar 

  • Yasui T (2016) Corporate governance of financial groups. OECD Corporate Governance Working Paper No. 20

Download references

Author information

Authors and Affiliations

  1. Professor, Department of Law, Aarhus University, Århus, Denmark

    Karsten Engsig Sørensen

Authors
  1. Karsten Engsig Sørensen
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Karsten Engsig Sørensen.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Sørensen, K.E. The Legal Position of Parent Companies: A Top–Down Focus on Group Governance. Eur Bus Org Law Rev 22, 433–474 (2021). https://doi.org/10.1007/s40804-021-00211-5

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40804-021-00211-5

Keywords

Search

Navigation