Page 11 - Albanian law on entrepreuners and companies - text with with commentary

corporate governance codes and codes of corporate social responsibility; competition
regulations.
The implementation of these laws and regulations depends on the methods and
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procedures developed during the evolution of the local legal system. Organizational law of
this kind is traditionally understood as being part of private law as opposed to public law
(administrative law or constitutional law). On the one hand, it is true that its rules are enforced
by civil courts and not by state agencies. On the other hand, on formation of the company, a
separate legal order is formed which has rights and duties independent from the rights and
duties of partners, members or shareholders. After foundation the company “gains legitimacy
not only from the founders but from the whole of the community interested in the commercial
adventure. Its powers are therefore a concession not from the owners alone but from the wider
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group involved in attaining its goals.” Modern questions of company organization and
conduct go therefore beyond the classical distinction between private and public law.
Business organizations are increasingly scrutinized with respect to their social function and
responsibility, last but not least because many of them have become very powerful in the
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national and international economic and political context.
Finally due to some spectacular company collapses in the US and in Europe, the role of
companies has been the subject of intense international debate and continuous legal re-
regulation in recent years. ‘Corporate Governance’ has become the catchword for this
phenomenon. Roughly speaking, the traditional Anglo-American company law model is
shareholder-oriented, while the Continental European model is rather stakeholder-oriented as
other societal interest groups are accepted as playing some role in corporate governance
(above all employees and creditors). There is a significant debate between the two systems but
both models are ‘under pressure’ as there have been a number of company collapses and
frauds involving both systems. In 2008 there was a western financial collapse involving large
banks and the repercussions of this disaster are still resounding in many countries. Most of the
international banks were structurally managed on an Anglo-American model (shareholders
are the most important stakeholders) but there have been scandals involving both systems.
Therefore these insolvencies cannot simply be attributed to the structural malfunction of one
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of them. In the US, existing Codes of Ethics were not able to avoid ENRON’s
mismanagement and fraud, in Germany management co-determination of employees did not
prevent legally questionable take-overs (MANNESMANN) and managers’ illegal enrichment
(SIEMENS), and in Italy the affirmative attitude of important European banks contributed to
public trust in PARMALAT’s management while the company was already moving towards
insolvency and ‘wrongful trading’ was occurring.

12 See J.Dine and M. Koutsias, The Nature of Corporate Governance: the significance of national cultural identity
(Edward Elgar, 2013).
13 So the ‘dual concession theory’ as opposed to the classical ‘contractualist theory’ which privileges the role of founders
and shareholders at every stage of the company’s life cycle; cf. J. Dine, The Governance of Corporate Groups
(Cambridge University Press, 2000), p. 27.
14 See in this respect, J. Dine, M. Koutsias, M. Blecher, Company Law in the New Europe (Edward Elgar, 2006),
15 We recommend in this respect J. W. Cioffi, Corporate Governance Reform, Regulatory Politics and the Foundations of
Finance Capitalism in the United States and Germany, in: German Law Journal (on line) Vol. 07/06, pp. 533–62.
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