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Business Law, Public Responsibility, and Ethics Commons

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Articles 1 - 8 of 8

Full-Text Articles in Business Law, Public Responsibility, and Ethics

Fiduciary Principles In Agency Law, Deborah A. Demott Jan 2018

Fiduciary Principles In Agency Law, Deborah A. Demott

Faculty Scholarship

No abstract provided.


The Separation Of Corporate Law And Social Welfare, William W. Bratton Jan 2017

The Separation Of Corporate Law And Social Welfare, William W. Bratton

Faculty Scholarship at Penn Law

A half century ago, corporate legal theory pursued an institutional vision in which corporations and the law that creates them protect people from the ravages of volatile free markets. That vision was challenged on the ground during the 1980s, when corporate legal institutions and market forces came to blows over questions concerning hostile takeovers. By 1990, it seemed like the institutions had won. But a different picture has emerged as the years have gone by. It is now clear that the market side really won the battle of the 1980s, succeeding in entering a wedge between corporate law and social ...


The Bylaw Puzzle In Delaware Corporate Law, David A. Skeel Jr. Jan 2017

The Bylaw Puzzle In Delaware Corporate Law, David A. Skeel Jr.

Faculty Scholarship at Penn Law

In less than a decade, Delaware’s legislature has overruled its courts and reshaped Delaware corporate law on two different occasions, with proxy access bylaws in 2009 and with shareholder litigation bylaws in 2015. Having two dramatic interventions in quick succession would be puzzling under any circumstances. The interventions are doubly puzzling because with proxy access, Delaware’s legislature authorized the use of bylaws or charter provisions that Delaware’s courts had banned; while with shareholder litigation, it banned bylaws or charter provisions that the courts had authorized. This Article attempts to unravel the puzzle.

I start with corporate law ...


The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch Jan 2015

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

Faculty Scholarship at Penn Law

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 ...


Bankers And Chancellors, William W. Bratton, Michael L. Wachter Jan 2014

Bankers And Chancellors, William W. Bratton, Michael L. Wachter

Faculty Scholarship at Penn Law

The Delaware Chancery Court recently squared off against the investment banking world with a series of rulings that tie Revlon violations to banker conflicts of interest. Critics charge the Court with slamming down fiduciary principles of self-abnegation in a business context where they have no place or, contrariwise, letting culpable banks off the hook with ineffectual slaps on the wrist. This Article addresses this controversy, offering a sustained look at the banker-client advisory relationship. We pose a clear answer to the questions raised: although this is nominally fiduciary territory, both banker-client relationships and the Chancery Court’s recent interventions are ...


The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee May 2013

The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee

Robert Rhee

This Article corrects a misconception in corporation law – the belief that principles of tort law do not apply to the liability scheme of fiduciary duty. A board’s duty of care implies exposure to liability, but the business judgment rule precludes it. Tort law finds fault; corporation law excuses it. The conventional wisdom says that the tort analogy fails. This dismissal of tort prinicples is wrong. Although shareholder derivative suits and ordinary tort cases properly yield systemically antipodal outcomes, they are bound by a common analytical framework. The principles of board liability are rooted in tort doctrines governing duty, customs ...


The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee Jan 2013

The Tort Foundation Of Duty Of Care And Business Judgment, Robert J. Rhee

Faculty Scholarship

This Article corrects a misconception in corporation law – the belief that principles of tort law do not apply to the liability scheme of fiduciary duty. A board’s duty of care implies exposure to liability, but the business judgment rule precludes it. Tort law finds fault; corporation law excuses it. The conventional wisdom says that the tort analogy fails. This dismissal of tort prinicples is wrong. Although shareholder derivative suits and ordinary tort cases properly yield systemically antipodal outcomes, they are bound by a common analytical framework. The principles of board liability are rooted in tort doctrines governing duty, customs ...


Adapting To The New Shareholder-Centric Reality, Edward B. Rock Jan 2013

Adapting To The New Shareholder-Centric Reality, Edward B. Rock

Faculty Scholarship at Penn Law

After more than eighty years of sustained attention, the master problem of U.S. corporate law—the separation of ownership and control—has mostly been brought under control. This resolution has occurred more through changes in market and corporate practices than through changes in the law. This Article explores how corporate law and practice are adapting to the new shareholder-centric reality that has emerged.

Because solving the shareholder–manager agency cost problem aggravates shareholder–creditor agency costs, I focus on implications for creditors. After considering how debt contracts, compensation arrangements, and governance structures can work together to limit shareholder–creditor ...