Law Commons^™

A Critical Look At Corporate Governance, Lawrence E. Mitchell

Vanderbilt Law Review

The internal law of corporations is built upon the problem of competition-not competition with the world outside the corporate entity, which, according to liberal economic theory, is essential to the increase of wealth and well-being in society, but competition among the various groups of individuals that animate the corporation. The problem is (to extend the implicit metaphor) as if a human being's internal organs were constantly battling to capture all of the body's energy, rather than working together to contribute to the well-being of the whole. Like the human body, the corporation's "energy" (its assets) is, at any given point …

Untenable Status Of Corporate Governance Listing Standards Under The Securities Exchange Act, Douglas C. Michael

Law Faculty Scholarly Articles

United States securities markets operate under a system of supervised self-regulation created by the Securities Exchange Act of 1934 (Exchange Act). That system includes substantive regulation of the traders and the issuers of securities traded in those markets through the use of listing standards.

These listing standards have a unique status. They are part of a self-regulatory system, but are not classic self-regulation. The markets do not govern the traders of which it consists; rather, it governs outsiders—the issuers. The markets and the Securities and Exchange Commissions have sought to control issuers in ways not clearly related to trading in …

Corporate Law: What Is The Impact Of New Ali Proposals On Shareholder Litigation, John C. Coffee Jr., Michael P. Dooley

Faculty Scholarship

When the American Law Institute's Corporate Governance Project meets this month, one of the most hotly debated agenda items is likely to be its new rules governing shareholder litigation, which are now up for final approval.

The proposed change means that corporate boards will now have to prove in court that a decision to dismiss a shareholder claim alleging self-dealing was in the corporation's best interest. In addition, the requirement for a formal "demand" on the board by shareholders will be uniform, rather than subject to excuse, as it is under Delaware law and in the majority of states.

Drafters …