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Full-Text Articles in Law
Keynote Reflections: The Public Governance Duty, Steven L. Schwarcz
Keynote Reflections: The Public Governance Duty, Steven L. Schwarcz
Faculty Scholarship
Firms must take ever greater risks to try to innovate and create value in our increasingly competitive and complex global economy. Corporate governance law generally delegates control over excessive risk-taking to the firm’s investors, principally its risk-seeking shareholders. But this does not cover the type of risk-taking that led to the global financial crisis and that is becoming ever more common - risk-taking that could have systemic consequences to the financial system. I argue for a “public governance duty,” requiring managers of systemically important firms to assess the impact of risk-taking on the public as well as on investors, and …
Excessive Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Excessive Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Faculty Scholarship
Government agencies and prosecutors are being criticized for seeking so few indictments against individuals in the wake of the 2008-09 financial crisis and its resulting banking failures. This article analyzes why — contrary to a longstanding historical trend — personal liability may be on the decline, and whether agencies and prosecutors should be doing more. The analysis confronts fundamental policy questions concerning changing corporate and social norms. The public and the media perceive the crisis’s harm as a “wrong” caused by excessive risk-taking. But that view can be too simplistic, ignoring the reality that firms must take greater risks to …
Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Keynote Address: The Role Of Lawyers In The Global Financial Crisis, Steven L. Schwarcz
Keynote Address: The Role Of Lawyers In The Global Financial Crisis, Steven L. Schwarcz
Faculty Scholarship
In recent articles, the author has argued that the global financial crisis can be attributed in large part to three causes — conflicts, complacency and complexity — as well as to a type of tragedy of the commons. This article, which comprised the keynote address for the 2010 Corporate Law Teachers Association Conference, will focus on the failure of market observers, including corporate lawyers, to foresee or act on critical correlations that might have prevented, or at least mitigated, the crisis. Although conflicts, complacency, complexity and the tragedy of the commons can help to explain this failure, the goal will …