Edmund Schuster

Edmund SchusterEmail: E.Schuster@lse.ac.uk
Administrative support: Bradley Barlow
Room: New Academic Building 6.30
Tel.  020-7955-7452

Edmund-Philipp Schuster joined LSE as an Assistant Professor in 2010. Prior to joining LSE he practiced corporate law with Baker & McKenzie LLP in London and Vienna. From 2004 through 2009 he worked for the Austrian Takeover Commission, serving as head of office (2006-2008) and legal consultant (2008-2009). Edmund previously taught company and commercial law at the Vienna University of Economics and Business Administration and at the University of Applied Sciences bfi Vienna. Edmund holds law degrees from the University of Vienna and the LSE. Alongside his academic work, Edmund also works as counsel for the Corporate / M&A Team of Baker & McKenzie Austria..

Research Interests

My primary research areas are corporate law and takeover regulation, including the harmonisation of company law on the European level, as well as law and finance. Recent projects include articles on the relationship between shareholder empowerment and bank bailouts, on the liability of board members across the EU, and on the mandatory bid rule. Currently, I am working on an empirical research project exploring the impact of shareholder rights on firm performance and on a monograph on the regulation of mergers and acquisitions in Europe.

External Activities
  • Counsel for the Corporate / M&A Team of Baker & McKenzie Austria

Selected articles
and chapters in books

(with by Daniel Ferreira, Tom Kirchmaier and David Kershaw)   'Measuring Management Insulation from Shareholder Pressure' LSE Law Society and Economy Working Paper Series, 01-2016

We propose a management insulation measure based on charter, bylaw, and corporate law provisions that make it difficult for shareholders to oust a firm’s management. Unlike the existing alternatives, our measure considers the interactions between different provisions. We illustrate the usefulness of our measure with an application to the banking industry. We find that banks in which managers were more insulated from shareholders in 2003 were significantly less likely to be bailed out in 2008/09. These banks were also less likely to be targeted by activist shareholders, as proxied by 13D SEC filings. By contrast, popular alternative measures of insulation -- such as staggered boards and the Entrenchment Index -- fail to predict both bailouts and shareholder activism.

(with Carsten Gerner-Beuerle) ‘The Evolving Structure of Directors' Duties in Europe’ (2014) 15 European Business Organization Law Review pp.91-233

Corporate mobility in Europe continues to be on the rise, both creating space for regulatory arbitrage by companies and influencing legislative decisions in corporate law and related fields. This has triggered debates in European company law that centre on questions of harmonisation, cross-jurisdictional convergence and the superiority of certain regulatory approaches and legal families. This article uses a large cross-country sample of EU Member States to classify legal strategies in corporate governance and assess claims of convergence and the superiority of legal families. We analyse board structure, the most important duties of directors, namely the duties of care and loyalty, questions of enforcement, and the position of directors in the vicinity of insolvency, and develop a taxonomy of legal strategies across the Member States. We find that, in spite of differences in regulatory technique and legal tradition, the effect of the legal strategies employed by the Member States is often remarkably similar and legal systems exhibit interconnections in the form of mutual learning across borders. In addition, we show that, in contrast to claims by parts of the literature, judicial innovation is not restricted to particular legal families. We argue that all legal families are, in principle, well equipped to react to new developments and draw on general or unwritten principles of law to fill regulatory gaps. However, a precondition for the emergence of effective rules seems to be a sufficiently large body of case law and, accordingly, access to the courts and an efficiently functioning judicial system. Consequently, we submit that questions of enforcement are of greater importance than a particular legislative or regulatory style.

(with Esin Küçük and Carsten Gerner-Beuerle) ‘Law Meets Economics in the German Federal Constitutional Court: Outright Monetary Transactions on Trial’ (2014) 15 German Law Journal pp.281-320

The Eurozone banking and sovereign debt crisis has brought the fragility of the European monetary union into sharp focus and exposed the lack of effective instruments at the European level to maintain financial stability. As a response to the crisis, the Member States and the institutions of the Union adopted in short succession several financial assistance measures that have given rise to much political and legal controversy. The European Central Bank (ECB) played an active role in the institutions’ efforts to contain the crisis and prevent the disintegration of the Eurozone by deploying a number of so-called non-standard or unconventional monetary policy measures, namely its Securities Markets Programme, Long-Term Refinancing Operations, and in September 2012 the Outright Monetary Transactions Programme (OMT Programme). The OMT Decision envisages unlimited purchases by the ECB of specific types of sovereign bonds issued by Member States participating in an EFSF/ESM macroeconomic adjustment or precautionary program in the secondary market. Without the program having been activated, i.e. without the ECB actually implementing the decision and without any purchases of government bonds, yields on bonds of the affected Eurozone countries decreased markedly after the announcement of the OMT Decision. The OMT Programme has accordingly been credited with having been instrumental in restoring financial stability and preventing a breakup of the Euro area and with being one of the most effective announcements any central bank has ever made.

(with Carsten Gerner-Beuerle) ‘The Costs of Separation: Friction between Company and Insolvency Law in the Single Market’  Journal of Corporate Law Studies 2014, 14(2), 301-346; working paper published in LSE Law Society and Economy Working Paper Series, 06-2014

Corporate mobility and choice of law within the EU has dominated much of the academic writing in European company law over the last decades. What has not yet received much attention is the way in which national company law interacts with and depends on features of the national legal system outside of company law. In this article we explore this interaction and its relevance for coherent national regulatory systems. Using the regulatory framework for companies in the ‘vicinity of insolvency’ as an example, we show how choice of company law can create both regulatory gaps and multiplication of legal requirements, as private international law rules are applied inconsistently across Europe. More importantly, however, we show that even consistent application of conflicts rules would fail to resolve these problems due to cross-doctrinal interdependence within any national legal system. We conclude that this is a design flaw in the way EU law deals with the increasingly international reach of corporations, and discuss possible paths for resolving or mitigating this issue.

'The Mandatory Bid Rule: Efficient, After All?' (2013) 76 MLR 529-563
[Winner of the Wedderburn prize 2014]

This article analyses the efficiency costs entailed of the mandatory bid rule.

‘Mapping Directors’ Duties: The European Landscape’ (with Edmund-Philipp Schuster), in: Hanne Birkmose, Mette Neville & Karsten Engsig Sørensen (eds.), Boards of Directors in European Companies, Kluwer Law International 2013, pp. 13-55

This paper analyses the rules on directors' duties in all EU Member States, identifies regulatory philosophies and trends, highlights differences, and discusses enforcement strategies, particularly minority shareholder suits.

'Study on Directors’ Duties and Liability in Europe' (2013), prepared for the European Commission (with Carsten Gerner-Beuerle and Philipp Paech)

This comparative study analyses directors' duties and liabilities in all EU member states, identifying regulatory strategies and trends across Europe and discussing enforcement strategies. The report has been prepared for the European Commission.

'Shareholder Empowerment and Bank Bailouts' (with David Kershaw, Daniel Ferreira, and Tom Kirchmaier) (2013). ECGI - Finance Working Paper No. 345/2013; AXA Working Paper Series No 11; FMG Discussion Paper 714

We investigate the hypothesis that shareholder empowerment may have led to more bank bailouts during the recent financial crisis. To test this hypothesis, we propose a management insulation index based on banks’ charter and by-law provisions and on the provisions of the applicable state corporate law that make it difficult for shareholders to oust a firm’s management. Our index is both conceptually and practically different from the existing alternatives. In a sample of US commercial banks, we show that management insulation is a good predictor of bank bailouts: banks in which managers are fully insulated from shareholders are roughly 19 to 26 percentage points less likely to be bailed out. We also find that banks in which the management insulation index was reduced between 2003 and 2006 are more likely to be bailed out. We discuss alternative interpretations of the evidence. The evidence is mostly consistent with the hypothesis that banks in which shareholders were more empowered performed poorly during the crisis.

Corporate Compliance and Directors’ Duties, (2011) Compliance Praxis 32 (with Mario Gall)

Analyses the directors’ liability for compliance failures within the firm.

PL Davies, EP Schuster and E van de Walle de Ghelcke, ‘The Takeover Directive as a Protectionist Tool?’ in: WG Ringe and U Bernitz (eds) Company Law and Economic Protectionism (OUP, 2010)

Analyses the implementation of the board neutrality rule contained in the EU Takeover Directive in all EU member states. Previously published as ECGI - Law Working paper No 141/2010.

‘Efficiency in Private Control Sales - The Case for Mandatory Bids’ LSE Law, Society and Economy Working Paper Series, WPS 8-2010

This paper analyses the determinants of the efficiency costs entailed by the mandatory bid rule and alternative regulatory concepts. 

Contributor to: M. Straube (ed.) Wiener Kommentar zum Unternehmensgesetzbuch (Manz, 2010)

Commentary to the Austrian Commercial Code.

J Cepani and EP Schuster, ‘Minority Shareholder Protection in Albania (Schutz der Minderheitsaktionäre in Albanien)’ in: P Doralt and M Winner (eds.), Schutz von Minderheitsaktionären in Mittel- und Osteuropa (Vienna 2010)

This chapter highlights recent developments in Albanian company law, particularly focussing on the impact of EU company law in emerging economies.

N Arnold and EP Schuster, ‘Generationenwechsel im Übernahmerecht’ in: C Ludwig and M Widinski (eds), Generationenwechsel (Vienna: Linde 2008)

This paper deals with the impact of takeover regulation on succession in listed family-dominated companies.

‘Antizipieren der Angebotspflicht nach dem neuen Übernahmerecht’ Wirtschaftsrechtliche Blätter, Vol 21 (2007), pp 353-364

T Bachner, EP Schuster and M Winner, The New Albanian Company Law (Tirana: Guttenberg 2009)