Getting Governance Right: Does the Law Matter?

Does Law Matter? Although that may be an odd question for a practicing lawyer to pose, it is a central question for legal academics and policy-makers – in all countries, and  across all fields of activity. How does any particular law affect the way people behave? Is it a force for good, or does it get in the way? Does it encourage – or inhibit – desirable behaviours, or is it irrelevant?

As a lawyer working in the private equity sector, I had often asked that question about British company law. In particular, what effect do legal rules have on the behaviour of those in charge of private companies? The rules seemed benign enough to me – although practitioners have to navigate their way through them – but do they serve any useful purpose?