Business Law, Public Responsibility, and Ethics Commons^™

Shareholder As Ulysses: Some Empirical Evidence On Why Investors In Public Corporations Tolerate Board Governance, Lynn A. Stout

Cornell Law Faculty Publications

This Article evaluates two possible explanations for why shareholders of public corporations tolerate board control of corporate assets and outputs: the widely accepted monitoring hypothesis, which posits that shareholders rely on boards primarily to control the "agency costs" associated with turning day-to-day control over the firm over to self-interested corporate executives, and the mediating hypothesis, which posits that shareholders also seek to "tie their own hands" by ceding control to directors as a means of attracting the extracontractual, firm-specific investments of such stakeholder groups as executives, creditors, and rank-and- file employees.

Part I reviews each hypothesis and concludes that each …

An Empirical Investigation Of The Relationship Between Audit Committee Effectiveness And Internal Auditors' Professional Objectivity : A Focus On Financial Institutions In Malaysia, Panir Selvam Kannan

Student Works (2000-2009)

This study provides empirical evidence on the relationship between audit committee effectiveness and professional objectivity of internal auditors in the Malaysian banking industry. There was no prior study done on this relationship. Although many studies had been done on the audit committee effectiveness in Malaysia and on the internal auditor's objectivity in overseas, no study is yet to be done on the relationship between an effective audit committee and the professional objectivity of internal auditors. Therefore, this study fills such gap. Many official organizations and bodies internationally as well as in Malaysia have proposed an important role for audit committee …

Toward A New Theory Of The Shareholder Role: A Sacred Space In Corporate Transactions, Robert B. Thompson, D. Gordon Smith

Faculty Scholarship

Corporate law expresses a profound ambiguity toward the role of shareholders. Courts announce that shareholders are critical to the theory that legitimates the exercise of power - by directors and officers over vast aggregations of property that they do not own. At the same time shareholders have a very difficult time actually making any corporate decisions. In this Article, we strive to define a new role for shareholders by drawing on economic theories of the firm and the structure of corporate law. More particularly we examine the role of shareholders in hostile corporate takeovers, the area where the interests of …

Teaching Students How To Become In-House Counsel, Christian C. Day

Journal of Legal Education

No abstract provided.

Changing Role Of The Company Secretary In Malaysia, Cheng Luan Ooi

Student Works (2000-2009)

The role and responsibilities of the company secretary may not be so well known as that of the other profession like the accountants, advocates and solicitors, architects and doctors. It is also not well defined in company legislation nor does the Act in its present state distinguish between full time and professional company secretary. Thus the role of a company secretary in this context is somewhat confusing to outside parties as far as the scope of responsibilities is concerned. From the traditional role as a mere keeper of company's documents, in recent years, the role of company secretary calls for …

A Proposal To Eliminate Director Standards From The Model Business Corporations Act, D. Gordon Smith

Faculty Scholarship

The Committee on Corporate Laws of the Business Section of the American Bar Association recently adopted amendments to the section of the Model Business Corporation Act (MBCA) enunciating standards of director performance. In place of the current section 8.30, which has been adopted by 42 states, the Committee has adopted two sections - one defining a standard of conduct and one defining a standard of liability for corporate directors. This paper argues that these new standards do not achieve the goals of bifurcation. Moreover, if adopted and used, the new standards will engender confusion and possibly inequitable results. This paper …

The Shareholder Primacy Norm, D. Gordon Smith

Faculty Scholarship

Corporate directors have a fiduciary duty to make decisions in the best interests of the shareholders. This aspect of fiduciary duty is often called the shareholder primacy norm. Legal scholars generally assume that the shareholder primacy norm is a major factor considered by boards of directors of publicly traded corporations in making ordinary business decisions and that changing the shareholder primacy norm would have an effect on the substance of those decisions. This Article challenges this view and argues that the shareholder primacy norm was never equipped to mediate conflicts between shareholders and nonshareholder constituencies of a corporation. The origins …

Venture Capital Contracting In The Information Age, D. Gordon Smith

Faculty Scholarship

Most venture capitalists provide services to their portfolio companies beyond capital investment. Although these services form an important part of the bargain between the venture capitalists and the entrepreneur, they are rarely specified or even capable of specification in venture capital contracts. This article examines the moral hazard and adverse selection problems facing entrepreneurs who hire venture capitalists to provide value-added services and describes the role of the market for venture capitalist reputation in addressing those problems. Further, the Article speculates about whether advances in information technology - specifically, the World Wide Web - are likely to improve the efficiency …

Corporate Governance And Managerial Incompetence: Lessons From Kmart, D. Gordon Smith

Faculty Scholarship

Modern corporate governance scholars often extol an activist role by institutional investors in directing corporate activity. Widely viewed as a solution to the collective action problems that inhibit such activism by individual investors, institutional investors are praised for adding value to corporations through their participation in the decision making process. The ouster of Joseph Antonini as Chief Executive Officer of Kmart Corporation in 1995 might be taken as a vindication of this view, because substantial evidence indicates that institutional investors played a crucial role in influencing Kmart's board of directors to remove him. In this Article, Professor Smith challenges this …

Utah Limited Liability Companies: The ''Ugly Ducklings", Keen L. Ellsworth

BYU Law Review

No abstract provided.

Racial Discrimination In Business Transactions, Robert E. Suggs

Faculty Scholarship

When the Supreme Court invalidated a municipal minority business set-aside in City of Richmond v. J.A. Croson Co., it failed to recognize the special circumstances confronting the minority entrepreneur. Contrary to the Court’s own erroneous assertion that “[s]tates and their local subdivisions have many legislative weapons at their disposal both to punish and prevent present [business] discrimination ….” – they do not. Nor can they create effective antidiscrimination remedies as a practical matter. As a result that decision leaves minority business owners vulnerable to discrimination from other business firms but without a remedy. Part I identifies the glaring failure …

Defining And Upholding State Rights To Regulate Tender Offers After Mite And Cts, Michael A. Day

Brigham Young University Journal of Public Law

No abstract provided.

Utah's Business Name Statutes: "An Open Invitation To Litigation", Richard E. Turley Jr.

BYU Law Review

No abstract provided.

Dismissing Derivative Suits Under The Business Judgment Rule: Zapata Corp. V. Maldonado, J. Brad Wiggins

BYU Law Review

No abstract provided.

Book Review. The Corporation In Modern Society. Edited By Edward S. Mason, Thomas Ehrlich

Articles by Maurer Faculty

No abstract provided.