Business Commons^™

Unentrapped, William W. Bratton

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No abstract provided.

Embattled Ceos, Marcel Kahan, Edward B. Rock

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In this paper, we argue that chief executive officers of publicly-held corporations in the United States are losing power to their boards of directors and to their shareholders. This loss of power is recent (say, since 2000) and gradual, but nevertheless represents a significant move away from the imperial CEO who was surrounded by a hand-picked board and lethargic shareholders. After discussing the concept of power and its dimensions, we document the causes and symptoms of the decline in CEO power in several areas: share ownership composition and shareholder activism; governance rules and the board response to shareholder activism; regulatory …

The Hanging Chads Of Corporate Voting, Marcel Kahan, Edward B. Rock

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Never has voting been more important in corporate law. With greater activism among shareholders and the shift from plurality to majority voting for directors, the number of close votes is rising. But is the basic technology of corporate voting adequate to the task? In this Article, we first examine the incredibly complicated system of US corporate voting, a complexity that is driven by the underlying custodial ownership structure, by dispersed ownership and large trading volumes, and by the rise in short-selling and derivatives. We identify three ways in which things predictably go wrong: pathologies of complexity; pathologies of ownership; and …

Shareholder Primacy's Corporatist Origins: Adolf Berle And The Modern Corporation, William W. Bratton, Michael L. Wachter

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No abstract provided.

The Managerial Turn In Environmental Policy, Cary Coglianese

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Legitimacy And Corporate Governance, Cary Coglianese

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Parallels between corporate governance and state governance appear to be growing. This essay focuses on the suggestion that corporate governance is becoming structured much more like public government in certain ways. This shift may well be helpful for enhancing credibility and confidence in capital markets, but it also raises important questions. Will reforms enacted in the post-Enron era limit managers' discretion to innovate, take risks, and respond quickly to changing economic circumstances? How far should society go in imposing on corporations the kinds of procedures found commonly in democratic governments?

Measuring Efficiency In Corporate Law: The Role Of Shareholder Primacy, Jill E. Fisch

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The shareholder primacy norm defines the objective of the corporation as maximization of shareholder wealth. Law and economics scholars have incorporated the shareholder primacy norm into their empirical analyses of regulatory efficiency. An increasingly influential body of scholarship uses empirical methodology to evaluate legal rules that allocate power within the corporation. By embracing the shareholder primacy norm, empirical scholars offer normative assessments about regulatory choices based on the effect of legal rules on measures of shareholder value such as stock price, net profits, and Tobin’s Q.

This Article challenges the foundations of using the shareholder primacy norm to judge corporate …

Supersize Pay, Incentive Compatibility, And The Volatile Shareholder Interest, William W. Bratton

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No abstract provided.

Management-Based Strategies For Improving Private Sector Environmental Performance, Cary Coglianese, Jennifer Nash

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Improvements in environmental quality depend in large measure on changes in private sector management. In recognition of this fact, government and industry have begun in recent years to focus directly on shaping the internal management practices of private firms. New management-based strategies can take many forms, but unlike conventional regulatory approaches they are linked by their distinctive focus on management practices, rather than on environmental technologies or emissions targets. This article offers the first sustained analysis of both public and private sector initiatives designed specifically to improve firms' environmental management. Synthesizing the results of a conference of leading scholars and …

The Academic Tournament Over Executive Compensation, William W. Bratton

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No abstract provided.

Corporate Shaming Revisited: An Essay For Bill Klein, David A. Skeel Jr.

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No abstract provided.

Icarus In The Boardroom, Introduction, David A. Skeel Jr.

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Americans have always loved risk takers. Like the Icarus of ancient Greek lore, however, even the most talented entrepreneurs can overstep their bounds. All too often, the very qualities that make Icaran executives special - self-confidence, visionary insight, and extreme competitiveness - spur them to take misguided and even illegal chances. The Icaran failure of an ordinary entrepreneur isn't headline news. But put Icarus in the corporate boardroom and - as this book vividly demonstrates - the ripple effects can be profound. Ever since the first large-scale corporations emerged in the nineteenth century, their ability to tap huge amounts of …

The Role Of Government In Corporate Governance, Cary Coglianese, Elizabeth K. Keating, Michael L. Michael, Thomas J. Healey

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Numerous corporate scandals in the past several years have fueled widespread debate over proposals for government action. The central challenge for government is how to restore corporate integrity and market confidence without overreacting and stifling the dynamism that underlies a strong economy. To examine this challenge, the Center for Business and Government's Regulatory Policy Program organized a conference in May 2004 on The Role of Government in Corporate Governance. The conference brought together government officials, business leaders, and academic researchers to discuss three fundamental public policy issues raised by recent corporate abuses. First, who should regulate corporate management - government …

The Past, Present And Future Of Debtor-In-Possession Financing, David A. Skeel Jr.

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Chapter 11's distinctive post-petition financing rules trace their ancestry back to the origins of large scale corporate reorganization in America in the nineteenth century. In this sense, post-petition financing has always been with us. But in the past decade, the role of the financers has changed. After a century in the shadows, post-petition lenders have stepped onto center stage. The DIP loan agreement has become the single most important governance lever in many large Chapter 11 cases. Why have these formerly bashful financers suddenly started hogging the spotlight? I argue in this article that the generous terms offered to DIP …

Corporate Anatomy Lessons, David A. Skeel Jr.

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The book that will lay the groundwork for the corporate law debates of the coming decade is The Anatomy of Corporate Law. Written by seven of the world's leading corporate law scholars - Henry Hansmann, Reinier Kraakman and Ed Rock of the U.S.; Paul Davies of England; Gerard Hertig of Switzerland; Klaus Hopt of Germany; and Hideki Kanda of Japan - The Anatomy of Corporate Law attempts to identify the underlying structure of corporate law, and to provide a framework for understanding the wide range of approaches that different countries take to corporate law regulation. It is hard to overstate …

Is There A Role For Lawyers In Preventing Future Enrons?, Jill E. Fisch, Kenneth M. Rosen

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Following the collapse of the Enron Corporation, the ethical obligations of corporate attorneys have received increased scrutiny. The Sarbanes-Oxley Act of 2002, enacted in response to calls for corporate reform, specifically requires the Securities and Exchange Commission to address the lawyer’s role by requiring covered attorneys to “report up” evidence of corporate wrongdoing to key corporate officers, and, in some circumstances, to the board of directors. Failure to “report up” subjects a lawyer to liability under federal law.

This Article argues that the reporting up requirement reflects a second-best approach to corporate governance reform. Rather than focusing on the actors …

The Qualified Legal Compliance Committee: Using The Attorney Conduct Rules To Restructure The Board Of Directors, Jill E. Fisch, Caroline M. Gentile

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The Securities and Exchange Commission introduced a new corporate governance structure, the qualified legal compliance committee, as part of the professional standards of conduct for attorneys mandated by the Sarbanes-Oxley Act of 2002. QLCCs are consistent with the Commission’s general approach to improving corporate governance through specialized committees of independent directors. This Article suggests, however, that assessing the benefits and costs of creating QLCCs may be more complex than is initially apparent. Importantly, QLCCs are unlikely to be effective in the absence of incentives for active director monitoring. This Article concludes by considering three ways of increasing these incentives.

Corporate Control Transactions: Introduction, Edward B. Rock, Michael L. Wachter

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No abstract provided.

How I Learned To Stop Worrying And Love The Pill: Adaptive Responses To Takeover Law, Marcel Kahan, Edward B. Rock

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No abstract provided.

Venture Capital On The Downside: Preferred Stock And Corporate Control, William W. Bratton

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No abstract provided.

Dangerous Liaisons: Corporate Law, Trust Law, And Interdoctrinal Legal Transplants, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Shaming In Corporate Law, David A. Skeel Jr.

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Along with the burgeoning legal literature on norms has come a renewed interest in the use of shaming sanctions as an alternative to standard forms of punishment. Shaming enthusiasts such as Professor Dan Kahan have argued that shaming sanctions can be used either as an independent sanction, or to supplement sanctions such as fines that might not otherwise convey an adequate amount of moral disapproval. Shaming skeptics worry that shaming sanctions will lead to idiosyncratic or unpredictable enforcement. This Article focuses on the role that shaming can or could play in corporate law. Although this Article is not the first …

Norms & Corporate Law: Introduction, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Islands Of Conscious Power: Law, Norms, And The Self-Governing Corporation, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Publish Or Perish, Gideon Parchomovsky

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No abstract provided.

Corporate Law As A Facilitator Of Self Governance, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Understanding Lockups: Effects In Bankruptcy And The Market For Corporate Control, Kermit Roosevelt Iii

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The article investigates the effects of lockups, devices used to compensate unsuccessful bidders. Lockups are relevant in contexts in which sales have auction-like characteristics. Bankruptcy and the market for corporate control are two such situations, since the governing legal regimes prevent sales from being swiftly consummated and require sellers to take the most favorable offer that emerges during the waiting period. Existing scholarship has considered lockups in both areas. The analysis of lockups in the market for corporate control is fairly well developed. This article shows that it is importantly incomplete because it fails both to distinguish between ex ante …

Teaching Corporate Governance Through Shareholder Litigation, Jill E. Fisch

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No abstract provided.

The Market Revolution In Bank And Insurance Firm Governance: Its Logic And Limits, David A. Skeel Jr.

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No abstract provided.

Waiting For The Omelet To Set: Match-Specific Assets And Minority Oppression In The Close Corporation, Edward B. Rock, Michael L. Wachter

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No abstract provided.