l. INTRODUCTION Recent scholarship has emphasized institutional differences in governance, share ownership, capital markets, and business culture among European, American, and Japanese companies. Despite this apparent divergence, however, the basic law of corporate governance -indeed, most of corporate law-has achieved a high degree of uniformity across these jurisdictions, and continuing convergence toward a single standard model is likely. The core legal features of the corporate form were already well established in advanced jurisdictions 100 years ago, at the turn of the twentieth centur Although there remained considerable room for variation in governance practices and in the fine structure of corporate law throughout the twentieth century, the pressures for further convergence are now rapidly growing. Chief among these pressures is the recent dominance of a shareholder-centered ideology of corporate law among the business government, and legal elites in key commercial jurisdictions. There is no longer any serious competitor to the view that corporate law should principally strive to increase long term shareholder value. This emergent consensus has already profoundly affected corporate governance practices throughout the world. It is only a matter of time before its influence is felt in the reform of corporate law as we I. CONVERGENCE PAST: THE RISE OF THE CORPORATE FORM We must begin with the recognition that the law of business corporations had nineteenth century By that time, large-scale business enterprise in every ma/or o already achieved a remarkable degree of worldwide convergence at the end of the commercial jurisdiction had come to be organized in the corporate form, and the core functional features of that form were essentially identical across these jurisdictions. Those features, which continue to characterize the corporate form today, are: (1)full legal personality, including well-defined authority to bind the firm to contracts and to bond those contracts with assets that are the property of the firm as distinct from the firms owners, (2) limited liability for owners and managers, 3) shared ownership by investors of capital, (4) delegated management under a board structure, and ( 5) transferable shares 1. See, e.g., Mark Roe, Some Differences in Company Structure in Germany, Japan, and the United States, 102 YALE L.J. 1927(1993) Ronald J. Gilson Mark J Roe, Understanding the Japanese Keiretsu: Overlaps Between Company Governance and Industrial Organization, 102 YALE L.J. 871(1993): Bernard s Black& John C Coffee, Hail Britannia? Institutional Investor Behavior Under Limited Regulation, 92 McH.L.REVv.197(1994) 2. See Henry Hansmann and Reinier Kraakman, The Essential Role of Organizational Law (Yale Law School and Harvard Law school, 1999)1. See, e.g., Mark Roe, Some Differences in Company Structure in Germany, Japan, and the United States, 102 YALE L. J. 1927 (1993); Ronald J. Gilson & Mark J. Roe, Understanding the Japanese Keiretsu: Overlaps Between Company Governance and Industrial Organization, 102 YALE L. J. 871 (1993); Bernard S. Black & John C. Coffee, Hail Britannia? Institutional Investor Behavior Under Limited Regulation, 92 MICH. L. REV. 1997 (1994). 2. See Henry Hansmann and Reinier Kraakman, The Essential Role of Organizational Law (Yale Law School and Harvard Law School, 1999). 1 I. INTRODUCTION Recent scholarship has emphasized institutional differences in governance, share ownership, capital markets, and business culture among European, American, and Japanese companies.1 Despite this apparent divergence, however, the basic law of corporate governance -- indeed, most of corporate law -- has achieved a high degree of uniformity across these jurisdictions, and continuing convergence toward a single standard model is likely. The core legal features of the corporate form were already well established in advanced jurisdictions 100 years ago, at the turn of the twentieth century. Although there remained considerable room for variation in governance practices and in the fine structure of corporate law throughout the twentieth century, the pressures for further convergence are now rapidly growing. Chief among these pressures is the recent dominance of a shareholder-centered ideology of corporate law among the business, government, and legal elites in key commercial jurisdictions. There is no longer any serious competitor to the view that corporate law should principally strive to increase long￾term shareholder value. This emergent consensus has already profoundly affected corporate governance practices throughout the world. It is only a matter of time before its influence is felt in the reform of corporate law as well. II. CONVERGENCE PAST: THE RISE OF THE CORPORATE FORM We must begin with the recognition that the law of business corporations had already achieved a remarkable degree of worldwide convergence at the end of the nineteenth century. By that time, large-scale business enterprise in every major commercial jurisdiction had come to be organized in the corporate form, and the core functional features of that form were essentially identical across these jurisdictions. Those features, which continue to characterize the corporate form today, are: (1) full legal personality, including well-defined authority to bind the firm to contracts and to bond those contracts with assets that are the property of the firm as distinct from the firm’s owners,2 (2) limited liability for owners and managers, (3) shared ownership by investors of capital, (4) delegated management under a board structure, and (5) transferable shares