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Full-Text Articles in Banking and Finance Law
Balancing The Governance Of Financial Institutions, David Min
Balancing The Governance Of Financial Institutions, David Min
Seattle University Law Review
Part I briefly describes the traditional agency–cost approach to corporate governance and the rationale that is offered for elevating the agency–cost concerns of shareholders over those of other stakeholders (especially creditors). But as Part I goes on to argue, even if this justification for shareholder primacy is convincing in corporate governance generally (and there are many who do not find it so), several unique characteristics of banks obviate the reasoning behind shareholder primacy. Banks are highly leveraged, which exacerbates creditor–shareholder agency conflicts and places greater importance on the interests of creditors. Banks enjoy government guarantees, and thus their corporate governance …
Corporations And Human Life, Frank Partnoy
Corporations And Human Life, Frank Partnoy
Seattle University Law Review
In Part I, I address decision-making. How should risk to human life be included in the jurisprudence of corporate decision-making? In terms of finance, how should corporations make net present value decisions when risk to human life is a factor? In terms of law, is there a case for exceptions to the business judgment rule based on risk to human life? Second, in Part II, I address oversight. How should risk to human life be included in the jurisprudence of oversight? In terms of finance, how should corporations approach risk management when human life is a factor? In terms of …
In Pursuit Of Good & Gold: Data Observations Of Employee Ownership & Impact Investment, Christopher Geczy, Jessica S. Jeffers, David K. Musto, Anne M. Tucker
In Pursuit Of Good & Gold: Data Observations Of Employee Ownership & Impact Investment, Christopher Geczy, Jessica S. Jeffers, David K. Musto, Anne M. Tucker
Seattle University Law Review
A startup’s path to self-sustaining profitability is risky and hard, and most do not make it. Venture capital (VC) investors try to improve these odds with contractual terms that focus and sharpen employees’ incentives to pursue gold. If the employees and investors expect the startup to balance the goal of profitability with another goal—the goal of good—the risks are likely to both grow and multiply. They grow to the extent that profits are threatened, and they multiply to the extent that balancing competing goals adds a dimension to the incentive problem. In this Article, we explore contracting terms specific to …
Social Enterprise And Investment Professionals: Sacrificing Financial Interests?, J. Haskell Murray
Social Enterprise And Investment Professionals: Sacrificing Financial Interests?, J. Haskell Murray
Seattle University Law Review
Over the past decade, more than three dozen jurisdictions in the United States passed some form of social enterprise legislation. Social enterprise statutes allow for the formation of for-profit entities that expressly require directors to consider the interests of corporate constituents beyond merely shareholders. Proponents of these social enterprise statutes argue that such statutes are needed because traditional corporate law prevents sacrificing the financial interests of shareholders in the interest of a broader social good, or in the interest of other stakeholders. Recently, social enterprises have started exploring public markets and showing up on the radar of investment professionals, including …
Financing The Benefit Corporation, Dana Brakman Reiser, Steven A. Dean
Financing The Benefit Corporation, Dana Brakman Reiser, Steven A. Dean
Seattle University Law Review
The hybrid organizational forms designed with social enterprises in mind have proven to be hothouse flowers. Flourishing in state legislatures, even those with the most distinguished pedigrees—such as Delaware’s public benefit corporation—have so far failed to thrive in the marketplace. Fortunately, hybrid financial instruments offer a source of strength and stability that can help social enterprise to take root. This Article examines the valuable role that financial instruments can play in providing social enterprises with the capital they need to grow. Debt with equity features and equity with debt characteristics constitute the lion’s share of such financial tools. More exotic …