Law Commons^™

Mutual Fund Stewardship And The Empty Voting Problem, Jill E. Fisch

All Faculty Scholarship

When Roberta Karmel wrote the articles that are the subject of this symposium, she was skeptical of both the potential value of shareholder voting and the emerging involvement of institutional investors in corporate governance. In the ensuing years, both the increased role and engagement of institutional investors and the heightened importance of shareholder voting offer new reasons to take Professor Karmel’s concerns seriously. Institutional investors have taken on a broader range of issues ranging from diversity and political spending to climate change and human capital management, and their ability to influence corporate policy on these issues has become more significant. …

The Reverse Agency Problem In The Age Of Compliance, Asaf Eckstein, Gideon Parchomovsky

All Faculty Scholarship

The agency problem, the idea that corporate directors and officers are motivated to prioritize their self-interest over the interest of their corporation, has had long-lasting impact on corporate law theory and practice. In recent years, however, as federal agencies have stepped up enforcement efforts against corporations, a new problem that is the mirror image of the agency problem has surfaced—the reverse agency problem. The surge in criminal investigations against corporations, combined with the rising popularity of settlement mechanisms including Pretrial Diversion Agreements (PDAs), and corporate plea agreements, has led corporations to sacrifice directors and officers in order to reach settlements …

Corporate Oversight And Disobedience, Elizabeth Pollman

All Faculty Scholarship

Over a decade has passed since landmark Delaware corporate law decisions on oversight responsibility, and only a small handful of cases have survived a motion to dismiss. Scholars have puzzled over what it means to have the potential for corporate accountability lodged within the duty of good faith, but almost never brought to fruition in terms of trial liability.

This article explores the public-regarding purpose of the obedience and oversight duties in corporate law and provides a descriptive account of how they are applied in practice. The Article argues that the fidelity to external law required by the duty of …

Startup Governance, Elizabeth Pollman

All Faculty Scholarship

Although previously considered rare, over three hundred startups have reached valuations over a billion dollars. Thousands of smaller startups aim to follow in their paths. Despite the enormous social and economic impact of venture-backed startups, their internal governance receives scant scholarly attention. Longstanding theories of corporate ownership and governance do not capture the special features of startups. They can grow large with ownership shared by diverse participants, and they face issues that do not fit the dominant principal-agent paradigm of public corporations or the classic narrative of controlling shareholders in closely held corporations.

This Article offers an original, comprehensive framework …

Introduction To Institutional Investor Activism: Hedge Funds And Private Equity, Economics And Regulation, William W. Bratton, Joseph A. Mccahery

All Faculty Scholarship

The increase in institutional ownership of recent decades has been accompanied by an enhanced role played by institutions in monitoring companies’ corporate governance behaviour. Activist hedge funds and private equity firms have achieved a degree of success in actively shaping the business plans of target firms. They may be characterized as pursuing a common goal – in the words used in the OECD Steering Group on Corporate Governance, both seek ‘to increase the market value of their pooled capital through active engagement with individual public companies. This engagement may include demands for changes in management, the composition of the board, …

"We The People," Constitutional Accountability, And Outsourcing Government, Kimberly L. Wehle

All Faculty Scholarship

The ubiquitous outsourcing of federal functions to private contractors, although benign in the main, raises the most fundamental of constitutional questions: What institutions and actors comprise the "federal government" itself? From Abu Ghraib to Blackwater, a string of scandals has heightened public awareness that highly sensitive federal powers and responsibilities are routinely entrusted to government contractors. At the same time, the American populace seems vaguely aware that, when it comes to ensuring accountability for errors and abuses of power, contractors occupy a special space. The fact is that myriad structural and procedural means for holding traditionally government actors accountable do …

Regulatory Adjudication, Marcia L. Mccormick

All Faculty Scholarship

Calls for increased regulation are flying fast and furious these days. We use regulation in the United States to prevent harm that various kinds of activities might cause and also to create positive external benefits that those activities could yield, but might not without incentives. Most regulatory programs in the United States provide a blend of measures designed to create these positive external benefits, promote good practices in the industry, prevent harms, and provide those harmed with remedies. At a time in which we contemplate new ways to regulate to deal with the crises of the day and prevent the …

Presidential Control Of The Elite "Non-Agency", Kimberly L. Wehle

All Faculty Scholarship

This article examines the constitutionality of legislation creating a new form of independent agency – in effect, a “non-agency” agency residing in the no-man’s land between Articles I and II of the Constitution. In the Sarbanes-Oxley Act, Congress established the Public Company Accounting Oversight Board (“PCAOB” or “Board”) and endowed it with massive governmental powers while insulating it from traditional mechanisms for ensuring accountability. Congress deemed the PCAOB not an agency, rendered it substantially immune from judicial review, empowered Board members to set their own salaries and budget, and gave the embattled Securities and Exchange Commission – not the President …

Self-Handicapping And Managers’ Duty Of Care, David A. Hoffman

All Faculty Scholarship

This symposium essay focuses on the relationship between managers' duty of care and self-handicapping, or constructing obstacles to performance with the goal of influencing subsequent explanations about outcomes. Conventional explanations for failures of caretaking by managers have focused on motives (greed) and incentives (agency costs). This account of manager behavior has led some modern jurists, concerned about recent corporate scandals, to advocate for stronger deterrent measures to realign manager and shareholder incentives. * Self-handicapping theory, by contrast, teaches that bad manager behavior may occur even when incentives are well-aligned. Highly successful individuals in particular come to fear the pressure of …

Corporate Anatomy Lessons, David A. Skeel Jr.

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The book that will lay the groundwork for the corporate law debates of the coming decade is The Anatomy of Corporate Law. Written by seven of the world's leading corporate law scholars - Henry Hansmann, Reinier Kraakman and Ed Rock of the U.S.; Paul Davies of England; Gerard Hertig of Switzerland; Klaus Hopt of Germany; and Hideki Kanda of Japan - The Anatomy of Corporate Law attempts to identify the underlying structure of corporate law, and to provide a framework for understanding the wide range of approaches that different countries take to corporate law regulation. It is hard to overstate …

Dangerous Liaisons: Corporate Law, Trust Law, And Interdoctrinal Legal Transplants, Edward B. Rock, Michael L. Wachter

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No abstract provided.

The Costs Of Agencies: Waters V. Churchill And The First Amendment In The Administrative State, Kermit Roosevelt Iii

All Faculty Scholarship

106 Yale L. J. 1233 (1997)

Regulatory Competition, Regulatory Capture, And Corporate Self-Regulation, William W. Bratton, Joseph A. Mccahery Prof

All Faculty Scholarship

No abstract provided.

Foxes And Hen Houses?: Personal Trading By Mutual Fund Managers, Edward B. Rock

All Faculty Scholarship

No abstract provided.

Negotiability, Electronic Commercial Practices, And A New Structure For The U.C.C. Article 9 Filing System, Steven L. Harris, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.