Theory, Gender and Corporate Law

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Theory, Gender and
Corporate Law

Katherine Hall*


Explicitly teaching theory is vital to all areas of law. Theory, whether in the general sense of jurisprudential, philosophical or political theories or in the more specific sense of theoretical analysis of particular areas of law, is an integral part of law and learning. It is as vital to learning as air is to breathing. And we usually take them for granted in much the same way.

The purpose of this paper is to emphasise the importance of explicitly teaching theory in corporate law. Traditionally, corporate law has been taught without much reflection upon theory.1 Perhaps this has been because of the growing scope and complexity of corporate law statutes, because of the technical nature of many corporate law concepts, or because the doctrinal, procedural and practical dimensions of the topic have been considered more important than the theoretical ones. Perhaps it has just been an issue of time and space within corporate law courses and of the significant demands already placed upon corporate law lecturers in teaching such a vast area of law. But whatever the reason, the fact remains that theorising about corporate law, either generally or specifically, has not only been a neglected area of legal scholarship2 but also a neglected area of teaching.

Gender analysis of corporate law is one area of theoretical reflection that has been particularly slow to develop. Whilst a growing body of research is now emerging in Australia on feminist analysis of corporate law,3 the challenge is to ensure that this research is incorporated into corporate law teaching. Including an explicit reflection upon gender, just as including a reflection upon political and economic theory, can enhance the way students learn about and understand corporate law.

To illustrate the importance of explicitly discussing theory in corporate law teaching I am going to look briefly at the concept of the separate legal personality of the corporation as discussed in Ford’s Principles of Corporations Law.4 I have chosen this text because it is the “traditional” text on corporate law in Australia.5 I have chosen the separate legal entity doctrine because it is an ideal example of the values and priorities reflected in corporate law, and of how we often teach principles as though they were inevitable consequences of commercial activity. It is also a doctrine taught at the beginning of our topics and it is therefore a good example of the confusion our students often experience when first encountering corporate law.

To demonstrate the potential for including gender analysis in corporate law teaching I am going to discuss selected aspects of the decisions in Metal Manufacturers v Lewis6 and Statewide Tobacco Services Ltd v Morley.7 Whilst these cases have been the subject of feminist analysis in other contexts.8 they are useful to demonstrate how case law can contextualise and “personalise” the seemingly abstract rules of corporate law. In particular, they show how cases can reveal the circumstances in which women are coming into contact with corporate law and the ways in which women are being characterised by the law and the judiciary.

Overall, I hope to demonstrate that all teaching of corporate law involves teaching theory.9 I also hope to demonstrate that corporate law can, and must, be taught in a way that incorporates a reflection upon gender issues.

The Importance (and Inevitability) of Theory

As already stated, my impression is that corporate law theory is not central to corporate law teaching, research or reform in Australia.10 David Wishart argues that this is because of the power of the ideology of positive law.11 He suggests that even when we critique corporate law or put forward alternate theories these ideas can be refuted and deemed trivial by the power of the claim “well what the law is (or what the courts” say) is what matters.12 Whilst this might be the case, my point here is that incorporating theory in our teaching (or research or reform for that matter) is not optional, for theory influences and defines what corporate law is and what we think it should be. Our only choices are whether to talk about theory explicitly, which in the context of teaching means informing our students about the theoretical underpinnings and assumptions of the law we are teaching, and whether to go beyond the dominant ideas of liberalism and positivism that so strongly influence corporate law.

My own experience with corporate law theory has been very much one of discovery. I started to consider the questions of theory, gender and corporate law when I was teaching in the School of Commerce at Flinders University and I felt a strange creature for being interested in what seemed to be a very “esoteric” area of corporate law. In particular, I wondered if I should have been researching more practical issues on corporate law. As theory had never played a major role in what I had studied and read about corporations I wondered if it was really that relevant.

Since that time, I am glad to say, I have come to more fully understand what corporate law theory really is or isn’t if you agree that little is happening in this area in Australia. In my opinion, it is considering the fundamental ideology of corporate law, the bigger picture of how we view corporations and why, or whether, we consider they are important. It is also about the different strands of theory that have developed in the last three to four hundred years on the nature of corporate personality and the extent of corporate power. For example, concession theories, corporate realism and aggregate/contracterian theories have all tried to characterise the nature of the modern corporation and provide a framework from which to analyse central concepts such as the separate legal entity doctrine, limited liability and management control.13

I have also come to realise that my concern in undertaking research on corporate law theory was being reinforced by the dominant attitude of many corporate law academics to theorising about corporate law. As researchers it seems most of our time is taken up considering issues other than corporate law theory. In particular, there is still a preference in Australia for corporate law research that is doctrinal, practical or focused on specific reform. Whilst this is not always the case,14 it seems that there is no ongoing “mainstream” discussion on the issues of theory that underlie our approaches to corporations or corporate regulation, or upon the fundamental assumptions and values upon which corporate law rests.15

In the same way, discussions of theory have not developed a central place in our teaching.16 We seem to spend much of our time covering large areas of doctrine, case law and procedure and trying to ensure our topics are sufficiently practical and skills oriented. We often believe that what our students need most are a solid understanding of corporate law principles and concepts and the ability to reason and argue well from the applicable cases and rules.17 If we can also add practical insight to this learning process, we think that we have done well. The absence of a substantial reflection upon theoretical issues is not a crucial omission, we might reason, as there are usually other subjects in the law school curriculum that focus upon theory and, we might add, corporate law theory itself is still not a strongly developed area of legal analysis.

Yet when we make decisions such as these to limit the discussion of theory in our teaching we limit other possibilities. For example, we limit our students’ intellectual skills and deny them an essential opportunity to understand and contextualise corporate law. We also limit the innovative developments which might result of our own and our students’ reflections upon corporate law. Unless we consider the theoretical underpinnings of what we research, teach and learn we unconsciously commit ourselves to promoting the same corporate structure and system of corporate regulation we currently experience.

It is essential for students to learn that all legal analysis involves a process of adopting positions on important political, social and philosophical questions.18 In the context of corporate law, these issues include the importance and growth in economic activity, capitalism and commercial power. Once our students understand that there is no way to extricate law from broader issues and values they will better understand how corporate law has developed and how legal arguments are constructed.19

We will also help our students to understand that the cloak of formalism put over law often hides its values from view. Traditionally, we have been educated to believe that it is possible to learn and apply law as if it were a self contained system removed from our own values and concepts of justice.20 We have been encouraged to see corporate law rules and decisions as somewhat inevitable; as valid and justifiable choices between a limited number of available options. We have not readily seen corporations as intertwined with liberalism, economic values and male power. We have not seen our own practice, and discussions of law as intertwined with ourselves and that we are responsible for the versions of corporate law that we adopt.

However, as many critical legal scholars have shown there is no way to step outside ourselves to see the world or law.21 All of our perceptions and ways of seeing are inevitably affected by our life experiences, characteristics and ideas on the world. The liberal claim to judicial and legal neutrality is therefore impossible. As traditionally understood, neutrality has meant that law is applied in a dispassionate or impartial way to all those who come before it. Instead, it has been shown that law often applies particular standards, reflected in legal principles and case law, based on the experiences of white, middle class, liberal men.22

The absence of an express reflection upon theory in corporate law perpetuates these illusions of law. When we teach law as rules and cases, as abstract doctrine and precedent we cut off discussions about the values and assumptions which underlie law. Through our silence, we endorse the dominant values and limit the potential for intellectual discussion. Theory opens up these discussions because it reveals the partiality of law — the idea that law is a reflection of the values of those who have had the power to shape reality. As Margaret Davies writes:

[K]nowledge is not itself neutral, since it always exists within a particular social and philosophical setting. “Neutrality” is only the position which is culturally enabled to deny its positionality — it is the position which is empowered to know.23

Theory can also help students to come to terms with the abstract nature of corporate law. The language of corporate law is unique and specific — students need to learn a whole new way of talking and thinking to discuss the corporation. In this context, it is often assumed that students will come around to seeing the world the way corporate law sees it just by having this view reinforced. For example, in the context of the separate legal entity doctrine, students are asked to believe that what is, perhaps in their reality, just pieces of paper and a name, is in law a distinct and important legal person.

And the effect of this process of abstraction is powerful. It can circumscribe students’ ability to bring their own reality into the learning process and to comprehend the social, economic and political relations upon which corporate law is based beyond the legal categorisations. Students may feel they have neither the language nor the concepts to challenge the dominant discourse of corporate law and they may see its legal abstractions as more real than their own experiences and perceptions. As Karl Llewellyn wrote in 1938:

[I]f the world of law is thus at its very creation in a student’s mind created in divisions and in concepts which falsify the facts of law, the student is helpless. The false concepts give him [sic] the only eyes to see that legal world, his only words to describe it. All later efforts of qualification leaves it permanently distorted to him.24

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