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Reconstructing The Corporation: A Mutual-Control Model Of Corporate Governance, Grant M. Hayden, Matthew T. Bodie Jan 2019

Reconstructing The Corporation: A Mutual-Control Model Of Corporate Governance, Grant M. Hayden, Matthew T. Bodie

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The consensus around shareholder primacy is crumbling. Investors, long assumed to be uncomplicated profit-maximizers, are looking for ways to express a wider range of values in allocating their funds. Workers are agitating for greater voice at their workplaces. And prominent legislators have recently proposed corporate law reforms that would put a sizable number of employee representatives on the boards of directors of large public companies. These rumblings of public discontent are echoed in recent corporate law scholarship, which has cataloged the costs of shareholder control, touted the advantages of nonvoting stock, and questioned whether activist holders of various stripes are ...


Evolving Norms Of Corporate Social Responsibility: Lessons Learned From The European Union Directive On Non-Financial Reporting, Constance Z. Wagner Jan 2018

Evolving Norms Of Corporate Social Responsibility: Lessons Learned From The European Union Directive On Non-Financial Reporting, Constance Z. Wagner

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This article examines an important development in the field of corporate social responsibility, namely theadoption of a 2014 European Union Directive (“2014 EU Directive”) mandating non-financial reporting by certain large companies. Such disclosure has traditionally been provided by businesses on a voluntary basis, but the 2014 EU Directive reflects an emerging global trends toward mandatory reporting. Such trend emerged in response to the perceived low quantity and poor quality of information disclosed voluntarily onsocial and environmental topics of importance to corporate stakeholders. The author analyzes the history and development of policy and legislation on this issue both at the European ...


Partnership Tax Allocations: The Basics, Walter D. Schwidetzky May 2017

Partnership Tax Allocations: The Basics, Walter D. Schwidetzky

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This article endeavors to help practitioners who are not partnership tax allocation experts identify when they should consult with those with that expertise. The partnership-allocation Treasury Regulations have been called "a creation of prodigious complexity ... essentially impenetrable to all but those with the time, talent, and determination to become thoroughly prepared experts on the subject." This article is written for those, to date at least, without that time and determination. At the same time, the article provides an introduction to the partnership tax allocation rules for those contemplating making the requisite investment of time and determination.

The term "partnership," for ...


The Next Iteration Of Progressive Corporate Law, Matthew T. Bodie Jan 2017

The Next Iteration Of Progressive Corporate Law, Matthew T. Bodie

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A wave of progressive corporate law scholarship in the late 1980s and early 1990s reimagined corporate law from the perspective of employees, consumers, and other stakeholders left behind by shareholder primacy. Almost thirty years later, it is time to revisit this literature and consider what progressive corporate law should be in the 21st Century. This essay argues for three changes: (1) a move to the theory of the firm as the underlying economic literature; (2) a focus on employees, rather than stakeholders more generally, and (3) an effort to change statutory and structural aspects of corporate law, such as board ...


The Law And Policy Of People Analytics, Matthew T. Bodie, Miriam A. Cherry, Marcia L. Mccormick, Jintong Tang Jan 2016

The Law And Policy Of People Analytics, Matthew T. Bodie, Miriam A. Cherry, Marcia L. Mccormick, Jintong Tang

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Leading technology companies such as Google and Facebook have been experimenting with people analytics, a new data-driven approach to human resources management. People analytics is just one example of the new phenomenon of “big data,” in which analyses of huge sets of quantitative information are used to guide decisions. Applying big data to the workplace could lead to more effective outcomes, as in the Moneyball example, where the Oakland Athletics baseball franchise used statistics to assemble a winning team on a shoestring budget. Data may help firms determine which candidates to hire, how to help workers improve job performance, and ...


Income Inequality And Corporate Structure, Matthew T. Bodie Jan 2015

Income Inequality And Corporate Structure, Matthew T. Bodie

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Efforts to address income inequality generally focus on wealth redistribution through taxation and government benefits. But these efforts do not attack the core problem -- the unfair distribution of wealth at the firm level. This essay, a contribution to the "Inequality, Opportunity, and the Law of the Workplace" symposium, argues that workers need power within their firms to stake their claims to larger slices of the corporate pie. Even though the current law of the workplace does provide regulatory support for workers, it fails to change internal firm governance. Policymakers who want to take on income inequality as a structural matter ...


Training The Transactional Business Lawyer: Using The Business Associations Course As A Platform To Teach Practical Skills, Constance Z. Wagner Jan 2015

Training The Transactional Business Lawyer: Using The Business Associations Course As A Platform To Teach Practical Skills, Constance Z. Wagner

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Drawing on her own practice background as a business lawyer and her law school teaching experience, theauthor argues for the importance of introducing transactional lawyering skills into the law school course on business associations. She notes that business law practice is transactional in nature, but that the traditional method of teaching business associations centers on case law analysis. This litigation-focused approach misleads students about the nature of business law practice, which requires lawyers to act as problem solvers and planners and to engage in preventative lawyering. To bolster her argument, the author draws on some of the recent literature on ...


Integrating Subchapters K And S And Beyond, Walter D. Schwidetzky Oct 2014

Integrating Subchapters K And S And Beyond, Walter D. Schwidetzky

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This Article builds upon a similar, lengthier effort that I published in the Tax Lawyer in 2009. While there is overlap, this Article contains much new material. Important case law and tax proposals from the House Ways and Means Committee have come out in the interim. Due to space limitations, unlike my Tax Lawyer effort, this Article attempts to avoid prolixity. It assumes the reader has good knowledge of both Subchapters S and K and the tax entity selection process. If you are not that reader, a review of my Tax Lawyer article or Professor Mann's article in this ...


Pass-Through Entity Reform: Is A Major Overhaul Necessary?, Walter D. Schwidetzky Mar 2014

Pass-Through Entity Reform: Is A Major Overhaul Necessary?, Walter D. Schwidetzky

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No abstract provided.


A Court For The One Percent: How The Supreme Court Contributes To Economic Inequality, Michele E. Gilman Jan 2014

A Court For The One Percent: How The Supreme Court Contributes To Economic Inequality, Michele E. Gilman

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This Article explores the United States Supreme Court’s role in furthering economic inequality. The Occupy Wall Street movement in 2011 not only highlighted growing income and wealth inequality in the United States, but also pointed the blame at governmental policies that favor business interests and the wealthy due to their outsized influence on politicians. Numerous economists and political scientists agree with this thesis. However, in focusing ire on the political branches and big business, these critiques have largely overlooked the role of the judiciary in fostering economic inequality. The Court’s doctrine touches each of the major causes of ...


Corporate Social Responsibility And The Multinational Enterprise, Constance Z. Wagner Jan 2014

Corporate Social Responsibility And The Multinational Enterprise, Constance Z. Wagner

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In this book review, the author critiques Levi’s Children: Coming to Terms with Human Rights in the Global Marketplace by Karl Schoenberger. Schoenberger depicts the struggle by Levi Strauss & Co. to abide by its principles regarding workers’ rights after its decision to relocate some manufacturing operations abroad, an effort that he concludes was ultimately unsuccessful. In exploring this topic, he discusses the human rights issues confronting Levi Strauss & Co. and other U.S. multinationals and the increasing pressure exerted by the public for such companies to operate in a socially responsible manner. Schoenberger’s primary contribution to the growing ...


Participation As A Theory Of Employment, Matthew T. Bodie Jan 2013

Participation As A Theory Of Employment, Matthew T. Bodie

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The concept of employment is an important legal category, not only for labor and employment law, but also for intellectual property law, torts, criminal law, and tax. The right-to-control test has dominated the debate over the definition of “employee” since its origins in the master-servant doctrine. However, the test no longer represents our modern notion of what it means to be an employee. This change has played itself out in research on the theory of the firm, which has shifted from a model of control to a model of participation in a team production process. This Article uses the theory ...


The Supreme Court's Theory Of The Fund, William Birdthistle Nov 2012

The Supreme Court's Theory Of The Fund, William Birdthistle

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Just as the firm has long served as the foundational molecule of the U.S. capitalist economy, theories of the firm have for more than a century dominated legal and economic discourse. Ever since Ronald Coase published The Nature of the Firm in 1937 and asked why firms should exist in an efficient market, classicists and neoclassicists have competed to develop theories — predominantly managerialist and contractual — that best explain the structure and behavior of business organizations.

The investment fund, by contrast, has languished at the margins of corporate theory, relegated as simply a minor, if somewhat curious, example of the ...


American Legal History Survey: Syllabus, Anders Walker Jan 2012

American Legal History Survey: Syllabus, Anders Walker

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This syllabus provides an overview of American Legal History, focusing on the manner in which law has been used to organize American society. Several themes will be traced through the semester, including law’s role in encouraging innovation and regulating social relations, in part through the elaboration of legal disciplines like property, tort, contract, criminal law, tax, business associations, administrative law, environmental law, securities regulation, commercial law, immigration, and health law. Emphasis will also be placed on the origins and evolution of constitutional law, from the founding to the present.


Incorporating Litigation Perspectives To Enhance The Business Associations Course, Ann M. Scarlett Jan 2012

Incorporating Litigation Perspectives To Enhance The Business Associations Course, Ann M. Scarlett

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This Article discusses having students in a Business Associations course think about the potential risks of a business decision, including consideration of the multiple perspectives that might produce litigation, as a method for enhancing students understanding of the new legal norms for businesses and the process for advising businesses.


The Post-Revolutionary Period In Corporate Law: Returning To The Theory Of The Firm, Matthew T. Bodie Jan 2012

The Post-Revolutionary Period In Corporate Law: Returning To The Theory Of The Firm, Matthew T. Bodie

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Law and economics revolutionized the study of corporate law. However, while modern finance theory and attendant empirical research continue to explore the effects of law on shareholder value, the theory of the firm literature has been underutilized. This paper, presented as part of the Berle III: Theory of the Firm Symposium at Seattle University School of Law, argues that corporate law scholars should turn their attention back to this literature and develop a deeper understanding of the corporation as firm.


The Bizarre Law & Economics Of 'Business Roundtable V. Sec', Grant M. Hayden, Matthew T. Bodie Jan 2012

The Bizarre Law & Economics Of 'Business Roundtable V. Sec', Grant M. Hayden, Matthew T. Bodie

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Corporations are legal entities designed to foster certain kinds of collective economic activity. The decisionmaking power within a corporation ultimately rests with a board of directors elected by shareholders. Shareholders, however, do not use anything like a conventional ballot in these elections; instead, they fill out a “proxy ballot,” delivered to them by the incumbent board. This proxy ballot lists only the incumbent board’s chosen nominees, very often the board members themselves. If a shareholder wants to run for director or propose another nominee for the board, she needs to provide all other shareholders with a separate proxy ballot ...


The Garcetti Virus, Nancy M. Modesitt Oct 2011

The Garcetti Virus, Nancy M. Modesitt

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In an era where corporate malfeasance has imposed staggering costs on society, ranging from the largest oil spill in recorded history to the largest government bailout of Wall Street, one would think that those who uncover corporate wrongdoing before it causes significant harm should receive awards. Employees are particularly well-placed to uncover such wrongdoing within companies. However, rather than reward these employees, employers tend to fire or marginalize them. While there are statutory protections for whistleblowers, a disturbing new trend appears to be developing: courts are excluding from the protection of whistleblowing statutes employees who report wrongdoing as part of ...


The Uncorporation And The Unraveling Of 'Nexus Of Contracts' Theory, Grant M. Hayden, Matthew T. Bodie Jan 2011

The Uncorporation And The Unraveling Of 'Nexus Of Contracts' Theory, Grant M. Hayden, Matthew T. Bodie

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This is a review of The Rise of the Uncorporation, by Larry E. Ribstein (Oxford University Press 2010). The Rise of the Uncorporation gives a compelling account of the increasing reliance on business forms other than the corporation. These new organizational forms - such as limited liability companies, limited liability partnerships, partnerships, and the like - give businesses greater freedom to structure themselves in ways that best facilitate their particular needs. And this, according to Ribstein, is an unqualified good, for it allows firms to operate more efficiently than if they were forced to assume an intensely regulated form.

Like most stories ...


What's In A Name? - The Tale Of Louis Wolfson's Affirmed, Alan M. Weinberger Jan 2011

What's In A Name? - The Tale Of Louis Wolfson's Affirmed, Alan M. Weinberger

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Why would someone choose to name a thoroughbred racehorse "Affirmed" after his conviction for federal securities laws violations had been affirmed on appeal? This inquiry is the basis for exploring the enigmatic life and spectacular career of Louis E. Wolfson, owner and breeder of the last winner of horse racing's Triple Crown.

Perhaps best known as the central figure in the scandal that resulted in the forced resignation of Supreme Court Justice Abe Fortas, Wolfson left a sizable footprint on corporate legal history. He has been described as the original corporate raider, the inventor of the market for corporate ...


Employees And The Boundaries Of The Corporation, Matthew T. Bodie Jan 2011

Employees And The Boundaries Of The Corporation, Matthew T. Bodie

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Employees have no formal role in U.S. corporate law. According to most theories of the firm, however, employees play a critical role in differentiating firms from markets. This essay examines the disparity in treatment and seeks to understand the ramifications of the separation of employees from the corporation. After discussing the absence of employees from the corporate structure, the essay looks at the role of the employees in theories of the firm. In contrast to corporate law, these theories generally include employees within the core of the firm, and they often explain the nature and purpose of the firm ...


Imitation Or Improvement? The Evolution Of Shareholder Derivative Litigation In The United States, United Kingdom, Canada, And Australia, Ann M. Scarlett Jan 2011

Imitation Or Improvement? The Evolution Of Shareholder Derivative Litigation In The United States, United Kingdom, Canada, And Australia, Ann M. Scarlett

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Shareholder derivative litigation is a target of constant criticism within the United States (U.S.). Many scholars advocate for its abolition and others propose strict limitations on its use. If shareholder derivative litigation were universally disfavored, one would expect countries to be abandoning such litigation through legislative enactments or judicial rulings. Instead, many countries are expanding shareholder derivative litigation.

This Article compares the shareholder derivative action as developed in the U.S. with such actions in the United Kingdom, Canada, and Australia. The U.S. has the most recognized and frequent uses of shareholder derivative actions, whereas such actions are ...


Nascar Green: The Problem Of Sustainability In Corporations And Corporate Law, Matthew T. Bodie Jan 2011

Nascar Green: The Problem Of Sustainability In Corporations And Corporate Law, Matthew T. Bodie

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The concept of "sustainability" is, at root, about a commitment to considering the future of the planet in our everyday affairs. In the corporate law context, supporters of sustainability seek to integrate these long-term environmental and social concerns into the corporation's DNA. This article seeks to explore sustainability as a corporate law concept by looking at the sustainability efforts of NASCAR and its affiliated firms. NASCAR has undertaken a series of "green" initiatives, most notably in the promotion of alternative fuels. These sustainability efforts are facilitated, in part, by the unusual structure of NASCAR and the sport of stock-car ...


Shareholder Democracy And The Curious Turn Toward Board Primacy, Grant M. Hayden, Matthew T. Bodie Jan 2010

Shareholder Democracy And The Curious Turn Toward Board Primacy, Grant M. Hayden, Matthew T. Bodie

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Corporate law is consumed with a debate over shareholder democracy. The conventional wisdom counsels that shareholders should have more voice in corporate governance, in order to reduce agency costs and provide democratic legitimacy. A second set of theorists, described as “board primacists,” advocates against greater shareholder democracy and in favor of increased board discretion. These theorists argue that shareholders need to delegate their authority in order to provide the board with the proper authority to manage the enterprise and avoid short-term decision making.

In the last few years, the classical economic underpinnings of corporate law have been destabilized by a ...


The Case For Employee Referenda On Transformative Transactions As Shareholder Proposals, Matthew T. Bodie Jan 2010

The Case For Employee Referenda On Transformative Transactions As Shareholder Proposals, Matthew T. Bodie

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This Comment describes and advocates for employee referenda as implemented through a SEC Rule 14a-8 shareholder proposal. The proposal provides for a nonbinding referendum amongst all employees whenever the corporation's shareholders must vote to approve a merger, acquisition, sale of substantially all assets, or other transformative transaction. The purpose of the referendum is to provide employees with a voice in the transaction and to provide shareholders with a mechanism for tapping into employee sentiment. Because the referendum would be nonbinding, it is best viewed as an informational tool for shareholders and employees to use in policing management's transactions ...


Families For Tax Purposes: What About The Steps, Wendy G. Gerzog Jul 2009

Families For Tax Purposes: What About The Steps, Wendy G. Gerzog

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At least 4.4 million families in the U.S. are blended ones that include step-children and step-parents. For tax purposes, these steps receive preferential treatment for their status because they are on the one hand included as family members for many income tax benefit sections, but on the other hand excluded as family members for business entity attribution purposes and for gift and estate tax anti-abuse provisions. In the interests of fairness and uniformity, steps should be treated as family members for all tax purposes where steps have in fact voluntarily acted as their biological or adoptive counterparts, both ...


Integrating Subchapters K And S — Just Do It, Walter D. Schwidetzky Apr 2009

Integrating Subchapters K And S — Just Do It, Walter D. Schwidetzky

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The Code contains two “pass-through” tax regimes for business entities. One is contained in Subchapter K, which applies to partnerships, the other in Subchapter S, which, unsurprisingly, applies to S corporations. In the main, both Subchapters tax the owners of the entities rather than the entities themselves. Having two pass-through tax regimes creates obvious administrative and other inefficiencies. There was a time when S corporations served a valuable purpose, particularly when taxpayers needed a fairly simple and foolproof pass-through entity that provided a liability shield. But limited liability companies (LLCs), which are usually taxed as partnerships, 1 in most contexts ...


Arrow's Theorem And The Exclusive Shareholder Franchise, Grant M. Hayden, Matthew T. Bodie Jan 2009

Arrow's Theorem And The Exclusive Shareholder Franchise, Grant M. Hayden, Matthew T. Bodie

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In this essay, we contest one of the main arguments for restricting corporate board voting to shareholders. In justifying the limitation of the franchise to shareholders, scholars have repeatedly turned to social choice theory—specifically, Arrow’s theorem—to justify the exclusive shareholder franchise. Citing to the theorem, corporate law commentators have argued that lumping different groups of stakeholders together into the electorate would result in a lack of consensus and, ultimately, the lack of coherence that attends intransitive social choices, perhaps even leading the corporation to self-destruct. We contend that this argument is misguided. First, we argue that scholars ...


Corporate Social Responsibility Of Multinational Enterprises And The International Business Law Curriculum, Constance Z. Wagner Jan 2008

Corporate Social Responsibility Of Multinational Enterprises And The International Business Law Curriculum, Constance Z. Wagner

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The author argues for expanded coverage of corporate social responsibility in the U.S. law school curriculum. Corporate social responsibility is of increasing importance for businesses, particularly for those companies that conduct multinational operations. Current national legal and regulatory regimes fail to adequately address the social and environmental issues that arise in business operations. As a result, intergovernmental organizations, non-governmental organizations and businesses have begun to promulgate voluntary codes ofconduct. These codes touch on such subjects as core labor standards, environmental protection, bribery offoreign government officials in international business and human rights. Examples include the Organization for Economic Cooperation and ...


Workers, Information, And Corporate Combinations: The Case For Non-Binding Employee Referenda In Transformative Transactions, Matthew T. Bodie Jan 2008

Workers, Information, And Corporate Combinations: The Case For Non-Binding Employee Referenda In Transformative Transactions, Matthew T. Bodie

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Employees present a curious puzzle for corporate law. The success of a corporation depends on its employees, from the chief executive officer down to the front-line production or service worker. But for the most part, corporate law relegates employees to the sidelines. Perhaps nowhere is this difference as dramatic as in the realm of mergers, acquisitions, and other transformative transactions. Such transactions are usually negotiated at the highest levels of management, approved by the board, and ultimately approved by the shareholders. In contrast, employees at most may be able to bargain about the effects of the merger through union representatives ...