It is a signal honour to have been invited to lecture at this world-renowned University—located, as some geographers would have it, at the very centre of the world. Certainly all eyes are concentrated on it at the moment. And it is an exhilarating thought that perhaps this new Law Centre will generate new legal approaches which we all seek, far transcending the limited legal problem and its solutions which we discuss tonight.
Let me say at once that in comparing Israeli and United States company law, I speak about your half of the subject—Israeli law—with much diffidence, although I am emboldened by the realization that every student of comparative law inevitably feels somewhat insecure in his grasp of law outside his own country. Still when I pondered what would be the most useful area for this lecture, I was struck by a fundamental similarity—for although we are separated geographically by half the world, the basic concerns of corporate investors are the same the world over: (1) an agreed-upon allocation of the rewards, if the corporate venture prove successful, and (2) control over management of the enterprise into which they have put their capital. Of first concern then is the law governing the corporate structure since this is what determines the investors' financial and voting rights, and secondly, the law protecting the investor against an unresponsive or irresponsible management. The legal sanctions here involved—statute law or case law—are a matter of concern to foreign capital. The reaction of foreign investors should be of special interest to you because Israel's social, economic, and political goals cannot be achieved without a substantial influx of capital investment from the outside. Foreign investors can operate either through foreign corporations doing business in Israel or through Israeli-formed companies. Tonight, because of time limitations, we confine ourselves to Israeli-formed companies. Other problems for a foreign investor, such as foreign exchange controls, do merit more than passing reference—but we cannot take time to elaborate them.