No end in sight for the history of corporate law: the case of employee participation in corporate governance

This article contests the claim made by Professors Hansmann and Kraakman that the end of history in corporate law has been reached and that this evolutionary last stop has no place for employees in corporate governance. The article analyses the theoretical foundations of this claim, namely Professor Williamson’s transaction cost account of board control and Professor Hansmann’s governance cost account of when worker ownership works and fails. It argues that while both costs place constraints on the form of efficient economic organization, neither cost can explain the absence of hybrid institutions, both real and imaginary, that would be both transaction and governance cost efficient and allow for employee participation in corporate governance. Accordingly, this article submits that if the end of history for corporate law has arrived, its identification is fortuitous, as the claim lacks theoretical support.