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Full-Text Articles in Law
Beyond Liability: Rewarding Effective Gatekeepers, Lawrence A. Cunningham
Beyond Liability: Rewarding Effective Gatekeepers, Lawrence A. Cunningham
GW Law Faculty Publications & Other Works
This Article adds to the emerging literature on rewards to promote effective capital market gatekeeping. Capital market gatekeeping theory traditionally relies heavily on threats of legal liability for failure to perform legally mandated functions (along with a presumed constraint imposed by reputation effects). The ineffectiveness of many gatekeepers in the past decade revealed limitations of the liability strategy and yet reforms continue to emphasize legal duties and liability for gatekeepers. This emphasis also has the negative side-effect of discouraging gatekeepers from willingness to perform desired functions - such as to detect for fraud. Using rewards can induce gatekeepers to perform …
Carrots For Vetogates: Incentive Systems To Promote Capital Market Gatekeeper Effectiveness, Lawrence A. Cunningham
Carrots For Vetogates: Incentive Systems To Promote Capital Market Gatekeeper Effectiveness, Lawrence A. Cunningham
GW Law Faculty Publications & Other Works
This Article contributes a novel idea to the literature on capital market gatekeepers: positive incentive systems for gatekeepers to perform functions not required of them in exchange for rewards if they perform the functions successfully. Capital market gatekeeping theory relies upon the reputations that gatekeepers are assumed to command and protect backstopped by negative threats of legal liability for failure to perform legally mandated functions. The ineffectiveness of many gatekeepers during the late 1990s and early 2000s revealed practical limitations of the reputational constraint and the reforms that responded to the failures continue to emphasize the legal duties and legal …
Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax
Spare The Rod, Spoil The Director? Revitalizing Directors' Fiduciary Duty Through Legal Liability, Lisa M. Fairfax
GW Law Faculty Publications & Other Works
It appears that our society has tacitly agreed to spare corporate directors any significant legal liability - which includes both financial and incarceration - for failing to perform their duties as board members. Thus, over the last twenty years, there has been a virtual elimination of legal liability - particularly in the form of financial penalties - for directors who breach their fiduciary duty of care. This is true despite the fact that we entrust directors with the awesome responsibility of monitoring all of America's corporations as well as the officers and agents within those corporations. More surprisingly, this tacit …
The Appeal And Limits Of Internal Controls To Fight Fraud, Terrorism, Other Ills, Lawrence A. Cunningham
The Appeal And Limits Of Internal Controls To Fight Fraud, Terrorism, Other Ills, Lawrence A. Cunningham
GW Law Faculty Publications & Other Works
Congress responded in similar ways to 2001's major national crises: bolstering internal controls in corporate America under the Sarbanes-Oxley Act in response to Enron's debacle and imposing internal controls on its financial services industry under the USA PATRIOT Act in response to 9/11's terrorism. These reflexive legislative responses to national crisis fit a pattern of proliferating controls as a first-order policy option dating to the mid-1970s. Documenting this proliferation and untangling the definition of internal controls, this Article attributes the appeal of internal controls as a policy option to systemic forces including the movements for deregulation and cooperative compliance, resistance …
The Impact Of Economic Globalization On Compliance, Dinah L. Shelton
The Impact Of Economic Globalization On Compliance, Dinah L. Shelton
GW Law Faculty Publications & Other Works
The introductory chapter of this book begins by defining globalization and the novel notion of the “common concern of humanity” and describes the ethical, cultural, and economic considerations underlying protection of the biosphere. The chapter describes the evolution of the common concern of humanity in depth and describes the increased presence of international organizations. Next, the chapter introduces the Marrakesh Charter and its corresponding economic principles. The chapter concludes that there exists the need to create an international liability system for both states and individuals for environmental degradation caused by international trade.