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- Lawrence J. Trautman Sr. (1)
- Lubomir P. Litov (1)
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Articles 1 - 30 of 36
Full-Text Articles in Law
Protecting The State From Itself? Regulatory Interventions In Corporate Governance And The Financing Of China's 'State Capitalism', Nicholas C, Howson
Protecting The State From Itself? Regulatory Interventions In Corporate Governance And The Financing Of China's 'State Capitalism', Nicholas C, Howson
Book Chapters
From the start of China’s “corporatization without privatization” process in the late 1980s, a Chinese corporate governance regime, apparently shareholder-empowering and determined by enabling legal norms, has been altered by mandatory governance mechanisms imposed by a state administrative agency, the China Securities Regulatory Commission (CSRC). This has been done to protect minority shareholders against exploitation by the Party-state controlling shareholders, the power behind China’s “state capitalism.” This chapter reviews the path of this benign intervention by the CSRC and the structural reasons for it, and then speculates on why this novel example of the China’s “fragmented authoritarianism” continues to be …
Lawyers And Fools: Lawyer-Directors In Public Corporations, Lubomir P. Litov, Simone M. Sepe, Charles K. Whitehead
Lawyers And Fools: Lawyer-Directors In Public Corporations, Lubomir P. Litov, Simone M. Sepe, Charles K. Whitehead
Lubomir P. Litov
The accepted wisdom—that a lawyer who becomes a corporate director has a fool for a client—is outdated. The benefits of lawyer-directors in today’s world significantly outweigh the costs. Beyond monitoring, they help manage litigation and regulation, as well as structure compensation to align CEO and shareholder interests. The results have been an average 9.5% increase in firm value and an almost doubling in the percentage of public companies with lawyer-directors. This Article is the first to analyze the rise of lawyer-directors. It makes a variety of other empirical contributions, each of which is statistically significant and large in magnitude. First, …
Four Pillars To Build A New Corporate Law Federalism: Crowd Funding Exchanges, A Codified Internal Affairs Doctrine, City-Based Incorporation, And An Arbitrated Corporate Code, J.W. Verret
John W Verret
This article examines the event window opened by the pending creation of new crowdfunding platforms, a new means of creating publicly traded equity for smaller, early stage firms than have ever been permitted by the Securities and Exchange Commission to access the public securities markets. That event window could support a completely new paradigm for the development of corporation law and completely upend existing wisdom about interstate competition to develop corporate governance. This article considers the economics of crowdfunding precursors which share some of the attributes of equity crowdfunding, and also considers the expected attributes of equity crowdfunding, to demonstrate …
The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol
The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol
Osgoode Hall Law Journal
The role of corporate and securities laws in addressing foreign corrupt business practices have, to date, received limited consideration. Departing from the substantial literature on the criminal and public law response to international corruption, the authors analyze Canada’s Corruption of Foreign Public Officials Act in comparison with British and American legislation and conclude that the Canadian regime relies too heavily on the use of criminal sanctions and fails to contemplate the role of behaviour modification in its legislative structure. Recognizing that multinational corporations are well placed to identify, expose, and prevent corrupt business practices, the authors propose a private law-based …
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Robert Rhee
This Article proposes the adoption of employee say-on-pay in corporate governance. The board would benefit from an advisory vote of employees on executive compensation. This proposal is based on two considerations: firstly, the benefits of better monitoring and reduced agency cost in corporate governance; secondly, the link between executive compensation and income inequity and wealth disparity in the broader economy. If adopted, shareholders and employees would monitor executive performance and pay at different levels. Shareholders through the market mechanism can only monitor at the level of public disclosures and share price. Employees can leverage private information. Non-executive managers in particular …
Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge
Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge
Michigan Business & Entrepreneurial Law Review
Almost one hundred years ago, Henry Ford, as CEO of the Ford Motor Company, announced a plan to cease payment of special dividends to shareholders. Instead, the company would reinvest its profits to employ more workers and build more factories. Investing in new workers and factories would cut the cost of cars and make them affordable to more people. Ford publicly declared that his “ambition [was] to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting …
The Institutional Appetite For Quack Corporate Governance, Alicia J. Davis
The Institutional Appetite For Quack Corporate Governance, Alicia J. Davis
Articles
This Article offers evidence that higher quality internal corporate governance is associated with higher levels of ownership by institutional investors. This finding is consistent with the idea that institutions have greater reason than individual investors to prefer well-governed firms, but surprising given the substantial empirical evidence that casts doubt on the efficacy of internal governance mechanisms. The study described in this Article also finds that higher quality external governance is associated with lower proportions of ownership by certain types of institutional investors, also a somewhat surprising result given available empirical evidence on the positive relationship between external governance and firm …
E-Commerce, Cyber, And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman
E-Commerce, Cyber, And Electronic Payment System Risks: Lessons From Paypal, Lawrence J. Trautman
Lawrence J. Trautman Sr.
By now, almost without exception, every business has an internet presence, and is likely engaged in e-commerce. What are the major risks perceived by those engaged in e-commerce and electronic payment systems? What potential risks, if they become reality, may cause substantial increases in operating costs or threaten the very survival of the enterprise? This article utilizes the relevant annual report disclosures from eBay (parent of PayPal), along with other eBay and PayPal documents, as a potentially powerful teaching device. Most of the descriptive language to follow is excerpted directly from eBay’s regulatory filings. My additions include weaving these materials …
Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois
Looking Back And Looking Forward: Sarbanes-Oxley And The Future Of Corporate Governance, Scott Harshbarger, Goutam U. Jois
Akron Law Review
In this Article, we argue that all groups: business leaders, regulators and shareholders, should recognize the steps that must be taken to create a competitive, fair and ethical corporate climate. We are not calling merely for “voluntary cooperation” from businesses to improve the current situation. Indeed, SOX exists and is appropriate for this situation precisely because it imposes baseline obligations with which corporations are required to comply. Moreover, other regulations regarding independent directors, expensing of stock options, etc. are needed and are vital to keeping business interests in line with society’s. However, business leaders and regulators will have an easier …
Think Like A Businessperson: Using Business School Cases To Create Strategic Corporate Lawyers., Alicia J. Davis
Think Like A Businessperson: Using Business School Cases To Create Strategic Corporate Lawyers., Alicia J. Davis
Articles
For the past twenty-five years, my academic and professional pursuits have straddled the line between business and law. I majored in business administration in college and then worked as an analyst in the Corporate Finance department at a bulge bracket Wall Street firm. After completing a JD/MBA, I returned to investment banking with a focus on middle-market mergers and acquisitions (M&A) and subsequently practiced law with a focus on private equity and M&A. Finally, in 2004, I found my current home as a corporate law professor. In my courses, which include Mergers & Acquisitions, Enterprise Organization, and Investor Protection, I …
A Defense Of The Corporate Law Duty Of Care, Julian Velasco
A Defense Of The Corporate Law Duty Of Care, Julian Velasco
Journal Articles
Most people would acknowledge the importance of the duty of loyalty, but the same is not true of the duty of care. Historically, the corporate law duty of care has been underenforced at best, and arguably unenforced entirely. Some scholars do not consider the duty of care to be a fiduciary duty at all, and there are those who would do away with it entirely. In this paper, I intend to provide a comprehensive defense of the corporate law fiduciary duty of care. I hope to show that the duty of care is not simply an ill-fitting appendage to the …
A Defense Of The Corporate Law Duty Of Care, Julian Velasco
A Defense Of The Corporate Law Duty Of Care, Julian Velasco
Julian Velasco
Most people would acknowledge the importance of the duty of loyalty, but the same is not true of the duty of care. Historically, the corporate law duty of care has been underenforced at best, and arguably unenforced entirely. Some scholars do not consider the duty of care to be a fiduciary duty at all, and there are those who would do away with it entirely. In this paper, I intend to provide a comprehensive defense of the corporate law fiduciary duty of care. I hope to show that the duty of care is not simply an ill-fitting appendage to the …
Lawyers And Fools: Lawyer-Directors In Public Corporations, Lubomir P. Litov, Simone M. Sepe, Charles K. Whitehead
Lawyers And Fools: Lawyer-Directors In Public Corporations, Lubomir P. Litov, Simone M. Sepe, Charles K. Whitehead
Charles K Whitehead
The accepted wisdom—that a lawyer who becomes a corporate director has a fool for a client—is outdated. The benefits of lawyer-directors in today’s world significantly outweigh the costs. Beyond monitoring, they help manage litigation and regulation, as well as structure compensation to align CEO and shareholder interests. The results have been an average 9.5% increase in firm value and an almost doubling in the percentage of public companies with lawyer-directors. This Article is the first to analyze the rise of lawyer-directors. It makes a variety of other empirical contributions, each of which is statistically significant and large in magnitude. First, …
The Evolution Of Debt: Covenants, The Credit Market, And Corporate Governance, Charles K. Whitehead
The Evolution Of Debt: Covenants, The Credit Market, And Corporate Governance, Charles K. Whitehead
Charles K Whitehead
No abstract provided.
Why Not A Ceo Term Limit?, Charles K. Whitehead
Why Not A Ceo Term Limit?, Charles K. Whitehead
Charles K Whitehead
In this Essay, I ask: Why not require a mandatory CEO term limit? My purpose is not to propose a term limit, but rather to ask why CEO term limits are out-of-bounds – not addressed within the corporate governance scholarship – when they have long been advocated for directors and, more recently, public company auditors. The traditional answer has been that CEOs are agents of the corporation, subject to control by the board, which holds primary responsibility for the firm’s business and affairs. Senior officers are largely shielded from outside interference, permitting them to execute consistent, long-term business strategies under …
Director Accountability And The Mediating Role Of The Corporate Board, Margaret M. Blair, Lynn A. Stout
Director Accountability And The Mediating Role Of The Corporate Board, Margaret M. Blair, Lynn A. Stout
Lynn A. Stout
One of the most pressing questions facing both corporate scholars and businesspeople today is how corporate directors can be made accountable. Before addressing this issue, however, it seems important to consider two antecedent questions: To whom should directors be accountable? And for what? Contemporary corporate scholarship often starts from a "shareholder primacy" perspective that holds that directors of public corporations ought to be accountable only to the shareholders, and ought to be accountable only for maximizing the value of the shareholders' shares. This perspective rests on the conventional contractarian assumption that the shareholders are the sole residual claimants and risk …
On The Nature Of Corporations, Lynn A. Stout
On The Nature Of Corporations, Lynn A. Stout
Lynn A. Stout
Legal experts traditionally distinguish corporations from unincorporated business forms by focusing on corporate characteristics like limited shareholder liability, centralized management, perpetual life, and free transferability of shares. While such approaches have value, this essay argues that the nature of the corporation can be better understood by focusing on a fifth, often-overlooked, characteristic of corporations: their capacity to "lock in" equity investors' initial capital contributions by making it far more difficult for those investors to subsequently withdraw assets from the firm. Like a tar pit, a corporation is much easier for equity investors to get into, than to get out of. …
The Mythical Benefits Of Shareholder Control, Lynn A. Stout
The Mythical Benefits Of Shareholder Control, Lynn A. Stout
Lynn A. Stout
In "The Myth of the Shareholder Franchise," Professor Lucian Bebchuk elegantly argues that the notion that shareholders in public corporations have the power to remove directors is a myth. Although a director facing a proxy contest might find this to be a bit of an overstatement, the core idea is sound. In a public company with widely dispersed share ownership, it is difficult and expensive for shareholders to overcome obstacles to collective action and wage a proxy battle to oust an incumbent board. Nor is success likely when directors can use corporate funds to solicit proxies to stay in place. …
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Robert Rhee
This Article proposes the adoption of employee say-on-pay in corporate governance. The board would benefit from an advisory vote of employees on executive compensation. This proposal is based on two considerations: firstly, the benefits of better monitoring and reduced agency cost in corporate governance; secondly, the link between executive compensation and income inequity and wealth disparity in the broader economy. If adopted, shareholders and employees would monitor executive performance and pay at different levels. Shareholders through the market mechanism can only monitor at the level of public disclosures and share price. Employees can leverage private information. Non-executive managers in particular …
Incorporating Legal Claims, Maya Steinitz
Incorporating Legal Claims, Maya Steinitz
Faculty Scholarship
Recent years have seen an explosion of interest in commercial litigation funding. Whereas the judicial, legislative, and scholarly treatment of litigation finance has regarded litigation finance first and foremost as a form of champerty and sought to regulate it through rules of legal professional responsibility (hereinafter, the "legal ethics paradigm"), this Article suggests that the problems created by litigation finance are all facets of the classic problems created by "the separation of ownership and control" that have been a focus of business law since the advent of the corporate form. Therefore, an "incorporation paradigm," offered here, is more appropriate. "Incorporating …
The Political Economic Dimensions Of Executive Compensation Reform: Can The Foundations Of Shareholder Primacy Be Sustained In The Post - Crisis Regulatory Environment?, Dezso Peter Arpad Farkas
The Political Economic Dimensions Of Executive Compensation Reform: Can The Foundations Of Shareholder Primacy Be Sustained In The Post - Crisis Regulatory Environment?, Dezso Peter Arpad Farkas
LLM Theses
What is absent in much of the literature on executive compensation reform is a deeper appreciation of the shift that has occurred since the latest financial crisis away from performance-based corporate governance arrangements to an approach that seeks to put the brakes on a runaway train, the shareholder value model and its relentless pursuit of shareholder wealth at all costs. By situating this debate into a broader discussion of corporate purpose, corporate governance and the law’s role in how business corporations are run in their social, economic and political environment this project seeks to shed some light onto what really …
Balance And Team Production, Kelli A. Alces
Balance And Team Production, Kelli A. Alces
Seattle University Law Review
For decades, those holding the shareholder primacy view that the purpose of a corporation is to earn a profit for its shareholders have been debating with those who believe that corporations exist to serve broader societal interests. Adolph Berle and Merrick Dodd began the conversation over eighty years ago, and it continues today, with voices at various places along a spectrum of possible corporate purposes participating. Unfortunately, over time, the various sides of the debate have begun to talk past each other rather than engage with each other and have lost sight of whatever common ground they may be able …
The Long Road To Reformulating The Understanding Of Directors' Duties: Legalizing Team Production Theory?, Thomas Clarke
The Long Road To Reformulating The Understanding Of Directors' Duties: Legalizing Team Production Theory?, Thomas Clarke
Seattle University Law Review
In this Article, the historical evolution of corporate governance is considered, highlighting the different eras of governance, the dominant theoretical and practical paradigms, and the reformulation of paradigms and counter paradigms. Two alternative and sharply contrasting theorizations, one collective and collaborative (the work of Berle and Means), the other individualistic and contractual (agency theory and shareholder value) are focused upon. The explanatory potential of Blair and Stout’s team production theory is elaborated, along with its conception of the complexity of business enterprise, with a mediating hierarch (the board of directors) securing a balance between the interests of different stakeholders. The …
The Institutional Appetite For Quack Corporate Governance, Alicia J. Davis
The Institutional Appetite For Quack Corporate Governance, Alicia J. Davis
Alicia Davis
This Article offers evidence that higher quality internal corporate governance is associated with higher levels of ownership by institutional investors. This finding is consistent with the idea that institutions have greater reason than individual investors to prefer well-governed firms, but surprising given the substantial empirical evidence that casts doubt on the efficacy of internal governance mechanisms. The study described in this Article also finds that higher quality external governance is associated with lower proportions of ownership by certain types of institutional investors, also a somewhat surprising result given available empirical evidence on the positive relationship between external governance and firm …
Balance And Team Production, Kelli A. Alces
Balance And Team Production, Kelli A. Alces
Scholarly Publications
No abstract provided.
A Failure Of Substance And A Failure Of Process: The Circular Odyssey Of Oklahoma's Corporate Law Amendments In 2010, 2012, And 2013, Steven J. Cleveland
A Failure Of Substance And A Failure Of Process: The Circular Odyssey Of Oklahoma's Corporate Law Amendments In 2010, 2012, And 2013, Steven J. Cleveland
Oklahoma Law Review
No abstract provided.
Rediscovering Corporate Governance In Bankruptcy, David A. Skeel Jr.
Rediscovering Corporate Governance In Bankruptcy, David A. Skeel Jr.
All Faculty Scholarship
In this Essay on Lynn LoPucki and Bill Whitford’s corporate reorganization project, written for a symposium honoring Bill Whitford, I begin by very briefly describing its historical antecedents. The project draws on the insights and perspectives of two closely intertwined traditions: the legal realism of 1930s, whose exemplars included William Douglas and other participants in the SEC study; and the law in action movement at the University of Wisconsin. In Section II, I briefly survey the key contributions of the corporate governance project, which punctured the then-conventional wisdom about the treatment of shareholders in bankruptcy, managers’ principal allegiance, and many …
Corporate Law And The Limits Of Private Ordering, James D. Cox
Corporate Law And The Limits Of Private Ordering, James D. Cox
Faculty Scholarship
Solomon-like, the Delaware legislature in 2015 split the baby by amending the Delaware General Corporation Law to authorize forum-selection bylaws and to prohibit charter or bylaw provisions that would shift to the plaintiff defense costs incurred in connection with shareholder suits that were not successfully concluded. The legislature acted after the Boilermakers Local 154 Retirement Fund. v. Chevron Corp ATP Tour, Inc. v. Deutscher Tennis Bund, broadly empowered the board vis-à-vis the shareholders through the board’s power to amend the bylaws. Repeatedly the analysis used by each court referenced the contractual relationship the shareholders had through the articles of …
Addressing Agency Costs Through Private Litigation In The U.S: Tensions, Disappointments, And Substitutes, James D. Cox, Randall S. Thomas
Addressing Agency Costs Through Private Litigation In The U.S: Tensions, Disappointments, And Substitutes, James D. Cox, Randall S. Thomas
Faculty Scholarship
Many scholars argue that over the past seventy years, shareholder representative litigation has acted as an important policing mechanism of managerial abuses at U.S. public companies. Different types of representative litigation have had their moment in the sun – derivative suits early on, followed by federal securities class actions, and most recently merger litigation – often producing benefits for shareholders, but posing difficult challenges as well. In particular, the benefits are qualified by another concern, the litigation agency costs that surround shareholder suits. This form of agency costs arises since the suits are invariably representative with no requirement that the …
Forum-Selection Bylaws Refracted Through An Agency Lens, Deborah A. Demott
Forum-Selection Bylaws Refracted Through An Agency Lens, Deborah A. Demott
Faculty Scholarship
Both praise and controversy surround director-adopted bylaws that affect shareholders' litigation rights. Recent bylaws specify an exclusive forum for litigation of corporate governance claims, limit shareholder claims to resolution through arbitration, and (most controversially) impose a one-way regime of fee shifting on shareholder litigants. To one degree or another, courts have legitimated each development, while commentators differ in their assessments. This Article brings into clear focus issues so far blurred in debates surrounding these types of bylaws. Focusing on forum-selection bylaws, and on Delaware precedents, I argue that beginning from the standpoint of common law agency reveals the attenuated and …