Business Commons^™

Regulating New Tech: Problems, Pathways, And People, Cary Coglianese

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New technologies bring with them many promises, but also a series of new problems. Even though these problems are new, they are not unlike the types of problems that regulators have long addressed in other contexts. The lessons from regulation in the past can thus guide regulatory efforts today. Regulators must focus on understanding the problems they seek to address and the causal pathways that lead to these problems. Then they must undertake efforts to shape the behavior of those in industry so that private sector managers focus on their technologies’ problems and take actions to interrupt the causal pathways. …

Reconsidering The Evolutionary Erosion Account Of Corporate Fiduciary Law, William W. Bratton

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This Article reconsiders the dominant account of corporate law’s duty of loyalty, which asserts that the courts have steadily relaxed standards of fiduciary scrutiny applied to self-dealing by corporate managers across more than a century of history—to the great detriment of the shareholder interest. The account originated in Harold Marsh, Jr.’s foundational article, Are Directors Trustees? Conflicts of Interest and Corporate Morality, published in The Business Lawyer in 1966. Marsh’s showing of historical lassitude has been successfully challenged in a recent book by Professor David Kershaw. This Article takes Professor Kershaw’s critique a step further, asking whether the evolutionary …

Deploying Machine Learning For A Sustainable Future, Cary Coglianese

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To meet the environmental challenges of a warming planet and an increasingly complex, high tech economy, government must become smarter about how it makes policies and deploys its limited resources. It specifically needs to build a robust capacity to analyze large volumes of environmental and economic data by using machine-learning algorithms to improve regulatory oversight, monitoring, and decision-making. Three challenges can be expected to drive the need for algorithmic environmental governance: more problems, less funding, and growing public demands. This paper explains why algorithmic governance will prove pivotal in meeting these challenges, but it also presents four likely obstacles that …

Progressive Antitrust, Herbert J. Hovenkamp

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Several American political candidates and administrations have both run and served under the “progressive” banner for more than a century, right through the 2016 election season. For the most part these have pursued interventionist antitrust policies, reflecting a belief that markets are fragile and in need of repair, that certain interest groups require greater protection, or in some cases that antitrust policy is an extended arm of regulation. This paper argues that most of this progressive antitrust policy was misconceived, including that reflected in the 2016 antitrust plank of the Democratic Party. The progressive state is best served by a …

The Challenge Of Regulatory Excellence, Cary Coglianese

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Regulation is a high-stakes enterprise marked by tremendous challenges and relentless public pressure. Regulators are expected to protect the public from harms associated with economic activity and technological change without unduly impeding economic growth or efficiency. Regulators today also face new demands, such as adapting to rapidly changing and complex financial instruments, the emergence of the sharing economy, and the potential hazards of synthetic biology and other innovations. Faced with these challenges, regulators need a lodestar for what constitutes high-quality regulation and guidance on how to improve their organizations’ performance. In the book Achieving Regulatory Excellence, leading regulatory experts …

The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch

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The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk-taking behavior of large financial institutions. A growing appreciation of the “public” nature of the corporation resulted in a substantial number of high profile enforcement actions. In addition, demands for greater accountability led policymakers to attempt to harness the corporation’s internal decision-making structure, in the name of improved corporate governance, to further the interest of non-shareholder stakeholders. Dodd-Frank’s advisory vote on executive compensation is an example.

This essay argues that the effort to employ shareholders as agents of public values and, thereby, to inculcate corporate …

Reinventing Copyright And Patent, Abraham Bell, Gideon Parchomovsky

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Intellectual property systems all over the world are modeled on the one-size-fits-all principle. However important or unimportant, inventions and original works of authorship receive the same scope of protection, for the same period, backed by the same variety of legal remedies. Metaphorically speaking, all intellectual property is equal under the law. This equality comes at a heavy price. The equality principle gives all creators access to the same remedies, even when those remedies create perverse incentives. Moreover, society overpays for innovation by inflicting on society more monopoly losses than are strictly necessary to incentivize production.

In this Article, we propose …

Toward A Closer Integration Of Law And Computer Science, Christopher S. Yoo

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Legal issues increasingly arise in increasingly complex technological contexts. Prominent recent examples include the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA), network neutrality, the increasing availability of location information, and the NSA’s surveillance program. Other emerging issues include data privacy, online video distribution, patent policy, and spectrum policy. In short, the rapid rate of technological change has increasingly shown that law and engineering can no longer remain compartmentalized into separate spheres. The logical response would be to embed the interaction between law and policy deeper into the fabric of both fields. An essential step would …

Insurance Against Misinformation In The Securities Market, Tom Baker

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Prepared at the request of the Task Force to Modernize Securities Legislation in Canada, this study describes and evaluates evaluate a new capital markets insurance concept: securities misinformation insurance. This new insurance would compensate investors for losses caused by securities law violations. The most powerful objection to this new concept is that investors do not need a new insurance program for securities misinformation losses. Individual and institutional investors already can spread securities misinformation losses by holding a diversified portfolio. Nevertheless, a securities misinformation insurance program has the potential to provide systemic benefits: improved compliance with securities laws (resulting from cost …

Management-Based Strategies For Improving Private Sector Environmental Performance, Cary Coglianese, Jennifer Nash

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Improvements in environmental quality depend in large measure on changes in private sector management. In recognition of this fact, government and industry have begun in recent years to focus directly on shaping the internal management practices of private firms. New management-based strategies can take many forms, but unlike conventional regulatory approaches they are linked by their distinctive focus on management practices, rather than on environmental technologies or emissions targets. This article offers the first sustained analysis of both public and private sector initiatives designed specifically to improve firms' environmental management. Synthesizing the results of a conference of leading scholars and …

Enron And The Dark Side Of Shareholder Value, William W. Bratton

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No abstract provided.