Table 1: Minority Shareholder Protection in English l Prior to 1948, shareholders could vote by proxy only if this had been stipulated in the articles of incorporation no mention is made of proxy by mail No blocking of shares (-) Shareholder suit Direct suit implied in 1844; derivative action recognized nly in 1975 Preemptive rights Adopted in response to EU harmonization requirements. Shareholders re The 1862 law required 20 percent. more than 10 percent of total The threshold was lowered to 5 percent in 1948 stock can call extraordinary shareholder meeting Acts 1844 Note: () denotes that the relevant provision does not exist in the statutory corporate law This observation raises the issues of why some countries have developed these protective mechanisms while others have not and whether a set of static indicators can serve as a proxy for the quality of law. In this paper, we propose an alternative approach to assessing the quality of corporate law, namely, the capacity of a legal system to innovate. The more innovative and adaptable a legal system is, the more likely it is able to respond to a changing environment and thereby give firms the possibility to explore new opportunities while ensuring a minimum level of investor protection We use data on the evolution of corporate law in ten jurisdictions to explore this proposition. Each of the major legal families, namely, the common law family and civil law families of France and Germany, are represented For each family, we include origin countries, i.e. countries that developed their formal legal systems largely internally or with only limited borrowing, as well as transplant countries, i. e those that received their formal legal order from foreign sources. The four origin countries are France, Germany5 Table 1: Minority Shareholder Protection in English Law Date of Enactment Comment Proxy by mail 1948 Prior to 1948, shareholders could vote by proxy only if this had been stipulated in the articles of incorporation; no mention is made of proxy by mail. Cumulative voting ( - ) ( - ) No blocking of shares ( - ) ( - ) Shareholder suit 1844 Direct suit implied in 1844; derivative action recognized only in 1975. Preemptive rights 1980 Adopted in response to EU harmonization requirements. Shareholders representing not more than 10 percent of total stock can call extraordinary shareholder meeting 1909 The 1862 law required 20 percent. The threshold was lowered to 5 percent in 1948. Source: English Companies Acts 1844 to present. Note: (-) denotes that the relevant provision does not exist in the statutory corporate law. This observation raises the issues of why some countries have developed these protective mechanisms while others have not and whether a set of static indicators can serve as a proxy for the quality of law. In this paper, we propose an alternative approach to assessing the quality of corporate law, namely, the capacity of a legal system to innovate. The more innovative and adaptable a legal system is, the more likely it is able to respond to a changing environment and thereby give firms the possibility to explore new opportunities while ensuring a minimum level of investor protection. We use data on the evolution of corporate law in ten jurisdictions to explore this proposition. Each of the major legal families, namely, the common law family and civil law families of France and Germany, are represented. For each family, we include origin countries, i.e. countries that developed their formal legal systems largely internally or with only limited borrowing, as well as transplant countries, i.e., those that received their formal legal order from foreign sources. The four origin countries are France, Germany