I. The Context A. South Africa's Corporate Law Regime Several statutes govern corporate law in South Africa, the primary statute being the Companies Act which governs both public and private companies. 3 Public companies must have a minimum of seven members (shareholders), and corporate entities can be members. 4 Public companies must comply with the financial reporting and accounting requirements set out in the Companies Act, as well as listing requirements of the Johannesburg Stock Exchange (JSE) where the company is a listed company. Where the public company is not a wholly owned subsidiary, if the number of members falls below seven and the members have knowledge of this, the statute specifies that the members shall be jointly and severally liable for payment of all debts incurred by the company for the period in which the number of members is below the statutory minimum. 5 The constating document for companies registered under the Companies Act is the memorandum of association, setting out the capital structure, the process for appointment of directors, specified duties of directors, and voting rights of members. 6 The company is also required to have articles of association. 7 The Companies Act allows for both par and non-par value shares, similar to the corporations statute in British Columbia, Canada. 8 Private companies are limited to a membership of 1-50 members. 9 Membership can include both natural persons as well as corporate entities. The primary difference is that the right to transfer shares is restricted. The shares cannot be publicly traded, and they are subject to such other restrictions as specified, such as preemptive rights. 10 Private companies must raise capital privately, failing which the company is treated as a public company. 11 Members of a private company can determine their governance structure in shareholders' agreements, which are not public documents. Private companies are held to slightly less rigorous accounting standards. State-owned enterprises, parastatals, are regulated in a manner similar to public companies. 12

Illness can contribute to financial problems directly, through high medical bills, and indirectly, through lost income. No previous in-depth studies have documented the role of medical problems among Canadian bankruptcy filers. We obtained the bankruptcy filings from a random sample of 5,000 debtors across Canada and mailed surveys to them seeking information about the medical antecedents of their bankruptcy. A total of 521 debtors responded (response rate of 10.4%), of whom 40.1 percent reported losing at least two weeks of work-related income because of illness or injury in the two years before their filing; 8.3 percent reported a similar income loss because of caregiving responsibilities for someone else who was ill. Although 60.1 percent of respondents reported being responsible for a medical bill within the previous two years, only 6.9 percent had bills over $5,000 (all amounts in Canadian Dollars). Prescription drugs were cited as the costliest medical expense by two-thirds of debtors reporting bills > $5,000, with dental bills cited by 22.2 percent. Universal health insurance affords Canadians protection against ruinous doctor and hospital bills. Inadequate coverage for prescription drugs and dental care, however, leaves some with unaffordable out-of-pocket costs. In addition, illness is a frequent indirect cause of bankruptcy through loss of work-related income.

While the new governance approach to corporate governance offers intriguing ideas about participatory governance, it cannot evade the effects of economic self-interest. This article addresses three nested concerns relating to the potential of new governance in the corporate context, using three specific examples that illustrate the challenges. The first case illustrates that new governance principles cannot be easily integrated with models of corporate governance that rest on the logic of shareholder primary. The second case study offers an example of a new governance type corporation, but illustrates that new governance faces thorny internal structural challenges, given economic incentives and power imbalance. The third example illustrates that even without these normative and structural problems, new governance would face issues arising out of current strategies employed by corporate decision makers to hedge their own personal risk through equity swaps and other derivatives products, which in turn create new incentives for shirking their responsibilities.l apo_350 576..602

In Canada, the law is now clear that directors and o⁄cers do not owe a ¢duciary duty to creditors at the point of insolvency pursuant to corporate and insolvency laws. The

Japanese corporate law is undergoing a transition with new Commercial Code amendments in 2003 that allow corporations to opt for an Anglo‐American model of governance. Combined with shifts in securities regulation, shareholder activism, and the notion of Japanese lifetime employment, there is an important issue of whether these shifts represent a move towards an optimal corporate governance paradigm. The evolution is tempered by particular cultural norms that drive Japanese corporate law. While there is a perception in North America that Japanese corporations have shifted to an Anglo‐American model of corporate governance, the reality is more layered. It may be that ultimately, the governance model that evolves will adopt the best elements of increased transparency, corporate accountability, enhanced shareholder protection, employee long‐term employment protections, and production synergies, that would allow Japanese corporations to compete internationally, but retain those elements of corporate community that have long been considered a primary objective of the social and economic life of Japan.