Introduction

In previous chapters various problems with the role that corporate lawyers play in companies, and the manner in which they are regulated, have been identified. It does not automatically follow, however, that reform of the role of the lawyer is desirable. This chapter analyses arguments for not taking action. These include the argument that reform is unnecessary, as the UK system of corporate governance works well enough without enhancing the lawyer's role; that insofar as there are problems with UK corporate governance, reform should be targeted at other groups; that requiring lawyers to perform a more extended corporate governance role will be unsuccessful, because lawyers will be unable to detect misfeasance due to structural constraints or cognitive bias; that imposing whistle-blowing duties on lawyers would undermine legal professional privilege and, paradoxically, undermine the corporate governance role of lawyers; and that reform would be too costly.

Change is unnecessary

The present system of corporate governance is sufficiently strong

The United Kingdom and the United States share significant similarities in the structure of their capital markets. Coffee argues that in both countries ownership and control are separated, ownership is dispersed and shareholders lack the insider information necessary to monitor management effectively. To address this information asymmetry, in both jurisdictions extensive disclosure obligations are imposed on companies. The effectiveness of such a system relies heavily on gatekeepers to monitor and verify the accuracy and quality of disclosures made by management.