Law Commons^™

Second Panel Discussion - Symposium: Who Makes Esg? Understanding Stakeholders In The Esg Debate, David H. Webber, Carmen Lu, Lisa Fairfox

Faculty Scholarship

This symposium was hosted virtually by Fordham University School of Law on October 23, 2020. The transcript has been edited for clarity and to provide sources, references, and explanatory materials for certain statements made by the speakers.

The second panel discussion was on the topic of "Stakeholders as the driving force of ESG." Panelists for the second panel were Carmen Lu, Lisa Fairfax, and David Webber.

The New Gatekeepers: Private Firms As Public Enforcers, Rory Van Loo

Faculty Scholarship

The world’s largest businesses must routinely police other businesses. By public mandate, Facebook monitors app developers’ privacy safeguards, Citibank audits call centers for deceptive sales practices, and Exxon reviews offshore oil platforms’ environmental standards. Scholars have devoted significant attention to how policy makers deploy other private sector enforcers, such as certification bodies, accountants, lawyers, and other periphery “gatekeepers.” However, the literature has yet to explore the emerging regulatory conscription of large firms at the center of the economy. This Article examines the rise of the enforcer-firm through case studies of the industries that are home to the most valuable companies, …

The Other Janus And The Future Of Labor’S Capital, David H. Webber

Faculty Scholarship

Two forms of labor’s capital—union funds and public pension funds—have profoundly reshaped the corporate world. They have successfully advocated for shareholder empowerment initiatives like proxy access, declassified boards, majority voting, say on pay, private fund registration, and the CEO-to-worker pay ratio. They have also served as lead plaintiffs in forty percent of federal securities fraud and Delaware deal class actions. Today, much-discussed reforms like revised shareholder proposal rules and mandatory arbitration threaten two of the main channels by which these shareholders have exercised power. But labor’s capital faces its greatest, even existential, threats from outside corporate law. This Essay addresses …

Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz

Faculty Scholarship

This Article makes two arguments that, combined, demonstrate an important synergy: first, including bondholders in corporate governance could help to reduce systemic risk because bondholders are more risk averse than shareholders; second, corporate governance should include bondholders because bonds now dwarf equity as a source of corporate financing and bond prices are increasingly tied to firm performance.

Lack Of Marketability And Minority Discounts In Valuing Close Corporation Stock: Elusiveness And Judicial Synchrony In Pursuit Of Equitable Consensus, Stephen J. Leacock

Faculty Scholarship

No abstract provided.

Impact Investing As A Form Of Lobbying And Its Corporate-Governance Effects, Andrzej Rapaczynski

Faculty Scholarship

Impact investment is attractive to many because it seems to combine support for progressive causes with an apparent commitment to the principles of a market economy. In fact, however, a rational impact investor is not simply creating demand for certain types of corporate actions; he/she is attempting to use corporate governance mechanisms to influence fiduciary decisions of the management. The cost of this tactic for the health of the capitalist economy is potentially very considerable. The American capitalist system relies heavily on a relatively fragile corporate governance arrangement in which the agency problems of a modern corporation are minimized by …

Tax And Corporate Governance: The Influence Of Tax On Managerial Agency Costs, David M. Schizer

Faculty Scholarship

This chapter examines the influence of tax on managerial agency costs, with particular emphasis on public companies in the United States. Focusing on “C-corporations,” this chapter first considers why tax is an imperfect vehicle for mitigating managerial agency costs. It then discusses how tax influences the compensation of managers, both in ways policy makers intended, and in ways they did not. The chapter also considers how tax affects management decisions about capital structure, hedging, and acquisitions. In addition, this chapter explores the tax system’s influence on the ability and incentives of shareholders to monitor management. This chapter then concludes with …

Governance In The Public Corporation Of The Future: The Battle For Control Of Corporate Governance, Z. Jill Barclift

Faculty Scholarship

Eight years after passage of the Sarbanes-Oxley Act, Congress has again passed sweeping legislation in response to a corporate crisis. In addition to changes in the regulatory environment for Wall Street financial firms and banks, the Dodd-Frank Act (D-F Act) also proposes reforms to corporate governance.

In this article, the author examines the latest governance mandates under the D-F Act. In particular, this article focuses on the disclosure requirements on the CEO and chairman positions, and argues that disclosures of whether the CEO is also the chairman benefit shareholders' governance rights under state law. The new provisions under D-F Act …

The Impact Of The Sarbanes-Oxley Act On Non-Shareholder Constituents: A Silver Lining, But Will It Endure?, Lisa M. Fairfax

Faculty Scholarship

No abstract provided.

Getting Out Of Business: Tax Costs And Opportunities In Exiting A Closely Held Business, Denise D. J. Roy

Faculty Scholarship

The primary purpose of this article is to encourage closely held business owners and their lawyers to consider exit costs, opportunities and strategies when making the initial choice-of-entity decision. A secondary purpose is to provide information about tax consequences and exit strategies useful to owners of businesses that are already up and running, whether in drafting a buy-sell agreement or planning for a specific transaction. Therefore, the article begins by comparing the major tax consequences of exiting the alternative entity types available to closely held businesses for tax purposes--C corporations, S corporations and partnerships. Part II of this article provides …

"Presumptions And Burdens Of Proof As Tools For Legal Stability And Change, Tamar Frankel

Faculty Scholarship

Presumptions and burdens of proof are used, among other purposes, to maintain legal stability and at the same time effect change. By imposing the burden of proof on the party asserting a certain outcome, courts can calibrate burdens of proof and substantive rules until experience points to rule retention or amendment. As agents of change, presumptions and burdens of proof are far more flexible and less brittle than rules.¹

This Article tells the story of presumptions and burdens of proof in litigation between corporate shareholders and managements. This litigation is replete with volatile presumptions and innovative burdens of proof, …

The Power Struggle Between Shareholders And Directors: The Demand Requirement In Derivative Suits, Tamar Frankel, Wayne M. Barsky

Faculty Scholarship

This article examines the demand shareholders must make on a corporation's board of directors prior to bringing a derivative suit. ... Presented with the question of whether the court would give effect to a decision of a committee of disinterested directors to terminate a shareholder derivative suit alleging directors' breach of fiduciary duties, the court ruled that even if the special committee was truly disinterested and independent, "[t]he Court should determine, applying its own independent business judgment, whether the [corporation's] motion [to dismiss the derivative action] should be granted." ... A derivative suit is one of the means for conducting …

Double Jeopardy Of Corporate Profits, The , Constantine N. Katsoris

Faculty Scholarship

The more one reads about our economy, the more one is baffled and alarmed. Permanent solutions to economic problems are elusive. Treating one financial malaise often aggravates another sector of the economy, necessitating a delicate balancing of conflicting interests. Furthermore, the problems are complicated by the constant influence of foreign forces. Nevertheless, most economists agree that any solution will require enormous funding. Unfortunately, the public has little, if any, confidence in our tax system. Indeed, some tax laws and proposals have been referred to as "obscene" and a "disgrace to the human race." Few quarrel with the aptness of such …