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Legal Diversification, Kelli A. Alces
Legal Diversification, Kelli A. Alces
Scholarly Publications
The greatest protection investors have from the risks associated with capital investment is diversification. This Essay introduces a new dimension of diversification for investors: legal diversification. Legal diversification of investment means building a portfolio of securities that are governed by a variety of legal rules. Legal diversification protects investors from the risk that a particular method of minimizing agency costs will prove ineffective and allows investors to own securities in a variety of firms, with each security governed by the most efficient set of legal rules given the circumstances of the investment. Diversification of investment by legal rules is possible …
Public-Private Regime Interactions In Global Food Safety Governance, Ching-Fu Lin
Public-Private Regime Interactions In Global Food Safety Governance, Ching-Fu Lin
Transnational Business Governance Interactions Working Papers
In response to an apparent decline in global food safety, numerous public and private regulatory initiatives have emerged to restore public confidence. This trend has been particularly marked by the growing influence of private regulators such as multinational food companies, supermarket chains and non-governmental organizations (NGOs), who employ private standards, certification protocols, third-party auditing, and transnational contracting practices. This paper explores how the structure and processes of private food safety governance interact with traditional public governance regimes, focusing on Global Good Agricultural Practices (GlobalGAP) as a primary example of the former. Due to the inefficiency and ineffectiveness of public regulation …
The Agency Costs Of Agency Capitalism: Activist Investors And The Revaluation Of Governance Rights, Ronald J. Gilson, Jeffrey N. Gordon
The Agency Costs Of Agency Capitalism: Activist Investors And The Revaluation Of Governance Rights, Ronald J. Gilson, Jeffrey N. Gordon
Faculty Scholarship
Equity ownership in the United States no longer reflects the dispersed share ownership of the canonical Berle-Means firm. Instead, we observe the reconcentration of ownership in the hands of institutional investment intermediaries, which gives rise to "the agency costs of agency capitalism." This ownership change has occurred because of (i) political decisions to privatize the provision of retirement savings and to require funding of such provision and (ii) capital market developments that favor investment intermediaries offering low-cost diversified investment vehicles. A new set of agency costs arises because in addition to divergence between the interests of record owners and the …
Agency Capitalism: Further Implications Of Equity Intermediation, Ronald J. Gilson, Jeffrey N. Gordon
Agency Capitalism: Further Implications Of Equity Intermediation, Ronald J. Gilson, Jeffrey N. Gordon
Faculty Scholarship
This chapter continues our examination of the corporate law and governance implications of the fundamental shift in ownership structure of U.S. public corporations from the Berle-Means pattern of widely distributed shareholders to one of Agency Capitalism – the reconcentration of ownership in intermediary institutional investors as record holders for their beneficial owners. A Berle-Means ownership distribution provided the foundation for the agency cost orientation of modern corporate law and governance – the goal was to bridge the gap between the interests of managers and shareholders that dispersed shareholders could not do for themselves. The equity intermediation of the last 30 …