1.4 Company legislation and informal codes of best practices

Britain is used to informal rules and developed the idea of a Code of Best Practice, based on a legal duty to "comply or explain". The first of many was the Cadbury Code of 1992. The code concept has been adopted in many other countries, which have often followed the ideas of the British codes. In the UK the stock exchange and investment institutions traditionally play an important role.

The US has a strong legal culture, with many state corporate laws and Federal Securities Laws, stock exchange regulations, an active plaintiffs' bar and courts that set clear criteria. In recent years shareholder activists have introduced many codes of best practice, which have influenced directors, even without a statutory basis. Recently, the Sarbanes-Oxley Act of 2002 has had substantial influence and the Dodd-Frank Act of 2010 will add to the burden of boards as well.

The Netherlands has its DCC and a fair volume of mandatory company law. 1997 saw the publication of the Peters Code, which was followed in 2004 by the Tabaksblat Code. This was updated in December 2008 and is now the Frijns Code. There is a legal duty of "comply or explain" conceming this Code.