Law Commons^™

Mandatory Public Reason-Giving In Corporate Governance, Sarah C. Haan

Scholarly Articles

Since the late 1970s, corporate governance law has incorporated a growing number of mandates that require corporate boards to explain to their shareholders the reasons behind their decision-making. These mandates do more than merely require boards to disclose certain decisions. They compel boards to publicly state why they have made a particular choice.

Public reason-giving is a core democratic value that recognizes the accountability of a representative body to its constituents. It provides a basis for constituents to assess the quality of leaders’ decision-making and to engage with that decision-making in effective ways. In corporations, public reason-giving facilitates the shareholder’s …

Corporate Governance Speech, Sarah C. Haan

Scholarly Articles

The State has always regulated the intra-firm communications that make corporate governance possible, most commonly by mandating disclosures of information by a corporation to its shareholders. Some such laws are labeled “securities regulation,” but securities regulation is a broad category that extends to speech by actors who are outside the corporate enterprise as well. Also, the conventional securities regulation category does not capture all such laws; other examples, including information forcing mandates, can be found in state corporate law. This Article uses the term “corporate governance speech” to describe the communications among shareholders, directors, and officers through which corporate governance …

Comprehensive Bibliography On Independent Accountability Mechanisms At International Development Finance Institutions (1993-2024), Reagan Ferris, David Hunter

Bibliography

This bibliography collects published and some non-published material relating to the World Bank Inspection Panel and other independent accountability mechanisms (IAMs) at international development finance institutions (IFIs). Not included are those reports, decisions, action plans, etc., that are generated by the IAMs or IFIs in processing a specific case and made available on the IAM’s website through, for example, a registry of cases. The bibliography is organized according to the following sections:

I. Publications Relating to Independent Accountability Mechanisms, including Books, Chapters, Articles, Working Papers, Dissertations, Reports, Newsletters, Press Releases, Statements, and Comments

II. Publications from International Organizations, including publications …

Risk, Reimagined: The Untold Story Of Liability Laddering In Modern Commercial Dealmaking, Carrie Stanton

Scholarly Articles

In commercial contracting, bargaining parties regularly allocate risk in various ways, including contractual limitations of liability. However, it can be difficult to appropriately apportion responsibility for high-risk contingencies such as data breach. A seller may be unwilling to accept uncapped liability for a contingency whose cost could exceed the expected value of the transaction. Conversely, a buyer may be unwilling to live with only a general damages cap established as a rough-and-ready compromise for more ordinary contingencies. To surmount this impasse, which typically arises toward the end of a negotiation, deal lawyers have begun to craft elevated dollar caps, or …

A Uniform, National Body Of Law To Govern The Enforcement Of Arbitration Agreements, Imre S. Szalai

American University Business Law Review

The heart of the Federal Arbitration Act (FAA) is section 2, which contains a federal mandate that arbitration agreements are valid, irrevocable, and enforceable; the FAA's remaining provisions help carry out this mandate.

Introductory Remarks, Dana Welch

American University Business Law Review

The year 1925 proved to be eventful for the United States and for the world. The Scopes Monkey Trial placed evolution in the spotlight. The New Yorker published its first issue. The "Grand Ole Opry´ premiered on the radio as the WSM Barn Dance. And fascism threatened Europe as Benito Mussolini dissolved the Italian Parliament and declared himself "Il Duce," the dictator of Italy, while Adolf Hitler published the first volume of Mein Kampf, written from prison. On a lighter note, Washington, D.C., saw the first National Spelling Bee, won by Frank Neuhauser, an eleven-year-old from Kentucky who correctly spelled …

Bringing Section 7 Into The Next Century, Amy J. Schmitz, David M. Brodsky

American University Business Law Review

In 1925, Congress passed a historic piece of legislation, the Federal Arbitration Act (FAA), that attempted to change the American judiciary's hostility towards enforcing arbitration agreements and awards. This hostility was rooted in English common law and migrated to the American civil justice system. But in 1925, Congress gave life to the broad use of executory agreements to enforce compliance with contracts through arbitration.

Through A Glass Darkly: How Securities Disclosures Give A Distorted View Of The Economy, Gerald F. Davis

Seattle University Law Review

Our understanding of the American economy often relies on stylized facts derived from mandatory disclosures by listed corporations. Data vendors like Standard & Poor’s vacuum up 10Ks and proxy statements into databases, and scholars distill these into tentative maps. This may have been adequate for a postwar economy centered on asset-heavy manufacturers, but it is increasingly out of step with an information-based economy. Companies listed on the stock market are fewer in number and less representative than they were, light in tangible assets and people, and heavy on IP. Basic facts such as what industry they are in are increasingly …

Blood Cobalt: Unmasking And Charging Corporations For Involvement In International Law Violations In The Democratic Republic Of Congo, Bolu Jegede

American University International Law Review

Joint Criminal Enterprise (JCE) is a legal doctrine developed by the International Criminal Tribunal for the Former Yugoslavia (ICTY) to hold participants in a criminal enterprise equally liable for all results of the group’s criminal actions, even if the individuals were not directly involved in committing the crimes. While traditionally used to prosecute individual criminal actions, JCE provides a legal pathway to hold corporations criminally liable for their actions that further international law violations. Although corporations currently do not have specific, listed responsibilities under international law, they are required to respect human rights and ensure their activities do not perpetrate …

The Small Business Dilemma, Rachel G. Ngo Ntomp

Faculty Articles

Small businesses face a unique and challenging dilemma in today’s business landscape. On the one hand, they are typically and rightfully considered the more powerful party in their contractual relations with consumers, thus prompting a need to protect consumers against unfair contractual terms. On the other hand, when engaging with larger businesses, small businesses typically find themselves in the position of the weaker, more vulnerable party, possibly in need of greater protection themselves from unfair terms. This Article addresses the inherent dilemma faced by small businesses and argues that the prevailing perception of businesses as sophisticated and experienced, based exclusively …

Ai As A Service: What Lawyers And Business Clients Need To Know, Martin Petrin

Commissioned Reports, Studies and Public Policy Documents

AI is seemingly everywhere. Hardly a day goes by in which there is not another media report on new areas in which the technology is being deployed and its potential consequences. While the advances of AI entail many opportunities for business and society, they also create challenges and risks. Although there is already awareness around problems such as AI bias, privacy, and human rights impacts, there are significant issues arising in the specific business-to-business context that have remained largely hidden and tend to receive much less attention. This article will, first, look at business-to-business more generally and show how AI …

The Gift Of Exit Financing, Robert W. Miller

Marquette Law Review

Aggressive liability management exercises have spilled over into bankruptcy court and exit financing is often the prize in the center of the arena. Debtors no longer rely upon gifting, the traditional strategy for buying plan support. Instead, they can replicate gifting’s benefits in a more defensible package by funneling discounted subscription rights to chosen constituencies as part of exit financing.

Recognizing exit financing’s distortive power, courts responded by evaluating the quality of negotiations and reviewing precedent transactions. Meanwhile, commentators suggest heightened monitoring and informal guardrails. All of these approaches ignore the shortcomings of judicial valuation. Market testing is the only …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Corporate Scenarios: Drawing Lessons From History, Madison Condon

Seattle University Law Review

As corporations are increasingly pressed to reveal information about their exposure to climate-related risks, they are often asked to undertake and disclose the outcome of “scenario analysis.” In this exercise, corporations, including financial institutions, examine how their business would fare under different pathways the future may take. One oft-used scenario, for example, is the International Energy Agency’s “Net-Zero by 2050: A Roadmap for the Energy Sector.” This Essay presents a history of the use of scenarios as a corporate planning tool, particularly in the oil industry, arguing that it is key for understanding our present moment and the role of …

Shareholder Expression In A Time Of Heightened Political Tension, Aaron A. Dhir

Seattle University Law Review

In this article, I provide context for my forthcoming research project on shareholder proposals and racial equity audits. Since the murder of George Floyd in May of 2020, progressive shareholder actors have increasingly used the proposal mechanism to advance diversity, equity, inclusion, and justice-related goals. These proposals have frequently gone beyond requesting the usual corporate fare of diversity trainings, intersectionality workshops, affinity groups, etc. Instead, a more ambitious type of proposal asks corporate America to conduct racial equity audits, defined as “an independent, objective and holistic analysis of a company’s policies, practices, products, services and efforts to combat systemic racism …

Corporate Governance Speech, Sarah C. Haan

Seattle University Law Review

The State has always regulated the intra-firm communications that make corporate governance possible, most commonly by mandating disclosures of information by a corporation to its shareholders. Some such laws are labeled “securities regulation,” but securities regulation is a broad category that extends to speech by actors who are outside the corporate enterprise as well. Also, the conventional securities regulation category does not capture all such laws; other examples, including informationforcing mandates, can be found in state corporate law. This Article uses the term “corporate governance speech” to describe the communications among shareholders, directors, and officers through which corporate governance is …

Dark Accounting Matter, Colleen Honigsberg

Seattle University Law Review

Physicists calculate that approximately 85% of the matter in the universe is composed of “dark matter” that “does not absorb, reflect, or emit electromagnetic radiation and is therefore difficult to detect.” The S&P 500 currently trades at a price-to-book value of 4.2, suggesting that book value accounts for less than 20% of the S&P 500’s market value. The remaining 80% appears nowhere in these firms’ balance sheets—it is invisible to contemporary accounting techniques and constitutes “dark accounting matter.”

Some “dark accounting matter” is composed of factors commonly described as components of “ESG.” Human capital, for example, is an intangible asset …

The Employees’ Dilemma: Balancing Internal Reporting, Whistleblowing, And Insider Trading Risks, Geeyoung Min

Seattle University Law Review

The Essay examines how recent developments in insider trading regulations and whistleblower reward programs can lead to unintended and counterproductive results of discouraging employees from using internal reporting channels within corporate compliance programs. While the presence of a robust and well-functioning corporate compliance program is a critical factor both in mitigating the level of public enforcement actions against companies and in protecting corporate managers from liability in private litigation, these programs often provide little incentive for employees to report potential misconduct internally.

Corporate compliance programs are designed to promote the upward information flow within the company, which is essential for …

How The Antidiscrimination Law Of Commercial Transactions Really Works, Helen Norton

Seattle University Law Review

A variety of businesses now cite 303 Creative when seeking First Amendment protection for their refusal to serve certain customers based on those customers’ protected class status. How this litigation will play out remains to be seen. But future courts need not, and should not, repeat the 303 Creative Court’s misunderstanding of how the antidiscrimination law of commercial transactions actually works.

Part I of this Essay explains the Court’s longstanding understanding of the antidiscrimination law of commercial transactions, and then describes the Court’s failure to engage with this precedent in 303 Creative. Part II then identifies the 303 Creative decision’s …

The Problem Of Purpose In Corporate Law, Matthew T. Bodie, Grant M. Hayden

Articles

For the last half century, shareholder primacy has reigned as the dominant definition of corporate purpose, as to both the purpose of individual companies and corporate law more generally. Recently, however, the Business Roundtable, the American Law Institute’s Restatement of the Law: Corporate Governance, and many business and legal academics have developed new answers to explain why we have corporations, and the ends to which their massive economic powers should be directed. This Essay endeavors to reframe the focus of the debate beyond purpose itself into the realm of actual governing power. In order to be meaningful, purpose needs governance. …

Alternatives To Delaware? Evaluating Corporate Law In Nevada, Texas, And Wyoming, Joseph Landau, Bailey Swartz, Anthony Rickey, Robert Ragazzo, Benjamin P. Edwards, George A. Mocsary

Scholarly Works

No abstract provided.

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Do Courts Get It Right When Piercing The Corporate Veil? An Empirical Study, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

This Article presents the results of a unique empirical study addressing whether courts achieve rational outcomes when piercing the corporate veil. The study examined a set of over 300 court decisions upholding piercing claims in the last almost four years. It asked whether the courts in these cases could rationally have found either deception of the creditors or improper removal of corporate assets (siphoning)—two grounds generally agreed to justify imposing liability upon the shareholders. The result was an affirmative answer in around three-quarters of the cases. This result provides an important response to the argument that piercing decisions are irrational …

The Efficient Default Rule For Sandbagging In Mergers And Acquisitions: A Limited Pro-Sandbagging Default, Alexis Klimaszewski

Connecticut Law Review

In the area of mergers and acquisitions (“M&A”), a buyer “sandbags” a seller when, knowing the seller has breached—intentionally or unintentionally—a representation or warranty prior to closing, the buyer nonetheless closes the sale and subsequently brings a post-closing indemnification claim. Parties to a merger or acquisition can negotiate a pro- or anti-sandbagging provision; however, the recent trend has been rising instances of silence in M&A agreements. Given the modern majority default rule, the result is that most buyers in the United States hold a sandbagging right; however, default rules are ambiguous, uncertain, and inconsistent across jurisdictions. While sandbagging at first …

Altering Rules: The New Frontier For Corporate Governance, Gabriel Rauterberg, Sarath Sanga

Faculty Scholarship

Corporate law has taken a contractarian turn. Shareholders are increasingly contracting around its foundational rules — statutory rights, the fiduciary duty of loyalty, even the central role of the board — and Delaware courts are increasingly enforcing these contracts. In the one case where they did not, the legislature swiftly overruled the decision and adopted a new statutory provision permitting boards to completely cede their powers to a shareholder by contract. These developments have sparked a polarized debate, with some calling for a return to mandatory rules, while others push for total contractual freedom.

We argue, however, that the best …

Under The Influence: Duties, Deception, Disclosures, And Due Diligence Of Social Media Influencers, Arianna Kiaei

Washington and Lee Law Review

The encroachment of social media into the daily lives of society reflects a major shift in consumer behavior. As social media moves from providing platforms of narrow connectivity among friends and family to social connection beyond one’s personal network, novel channels are being formed for consumers to absorb and share information. It opens opportunity for corporations to market their products beyond traditional methods and establishes the “influencer” sharing personal thoughts and recommendations on such products.

Social media’s immense purchasing power has a direct effect on the decision-making processes of individuals and the profit margins of corporations, and thus, the capacity …