Law Commons^™

Out Of The Shadows: Requiring Strategic Management Disclosure, Nadelle Grossman

Nadelle Grossman

Under federal securities laws and related regulations, public companies must disclose a host of information about their risk management processes to protect firm value. By contrast, these companies need not disclose virtually anything about their strategic management processes to generate firm value. As a result, investors are given a lopsided picture of firm processes to create value, undermining one of the federal securities laws’ central purposes of ensuring that investors receive complete information about public firms.

To address this concern, I propose that the Securities and Exchange Commission require public firms to disclose those qualities of their strategic management processes …

Out Of The Shadows: Requiring Strategic Management Disclosure, Nadelle Grossman

Nadelle Grossman

Under federal securities laws and related regulations, public companies must disclose a host of information about their risk management processes to protect firm value. By contrast, these companies need not disclose virtually anything about their strategic management processes to generate firm value. As a result, investors are given a lopsided picture of firm processes to create value, undermining one of the federal securities laws’ central purposes of ensuring that investors receive complete information about public firms.

To address this concern, I propose that the Securities and Exchange Commission require public firms to disclose those qualities of their strategic management processes …

Strategic Management And The Role Of Legal Norms In Creating Corporate Value, Nadelle Grossman

Nadelle Grossman

Delaware corporate law currently requires that directors oversee their firm’s systems to monitor risk so that they can limit their firm’s losses from such risks. Corporate law does not, however, require either directors or officers to oversee the interrelated process of managing that firm’s strategy for gains. Yet managing both risk and strategy are essential to a firm in creating value. In fact, as I argue in the paper, the current focus by business courts and academic commentators only on risk management oversight to prevent losses could actually undermine a firm’s management of its strategy for gains. I therefore propose …

Strategic Management And The Role Of Legal Norms In Creating Corporate Value, Nadelle Grossman

Nadelle Grossman

Delaware corporate law currently requires that directors oversee their firm’s systems to monitor risk so that they can limit their firm’s losses from such risks. Corporate law does not, however, require either directors or officers to oversee the interrelated process of managing that firm’s strategy for gains. Yet managing both risk and strategy are essential to a firm in creating value. In fact, as I argue in the paper, the current focus by business courts and academic commentators only on risk management oversight to prevent losses could actually undermine a firm’s management of its strategy for gains. I therefore propose …

Short-Term Fling Or Long-Term Commitment: Board Duties In A New Era, Nadelle Grossman

Nadelle Grossman

Corporate boards face significant pressure to make decisions that maximize profits in the short run. That pressure comes in part from executives who are financially rewarded for short-term profits despite the long-term risks associated with those profit-making activities. The current financial crisis, where executives at AIG and numerous other institutions ignored the long-term risks associated with their mortgage-backed securities investments, arose largely because those executives were compensated for the short-term profits generated by those investments despite their longer-term risks. Pressure on boards for short-term profits also comes from activist investors who seek to make quick money off of trading in …