Law Commons^™

The Team Production Theory Of Corporate Law: A Critical Assessment, Alan J. Meese

Alan J. Meese

No abstract provided.

Limitations On Corporate Speech: Protection For Shareholders Or Abridgement Of Expression?, Alan J. Meese

Alan J. Meese

No abstract provided.

Individual Or Collective Liability For Corporate Directors?, Darian M. Ibrahim

Darian M. Ibrahim

Fiduciary duty is one of the most litigated areas in corporate law and the subject of much academic attention, yet one important question has been ignored: Should fiduciary liability be assessed individually, where directors are examined one-by-one for compliance, or collectively, where the board's compliance as a whole is all that matters? The choice between individual and collective assessment may be the difference between a director's liability and her exoneration, may affect how boards function, and informs the broader fiduciary duty literature in important ways. This Article is the first to explore the individual/collective question and suggest a systematic way …

Freezing The Company Charter, Eric Kades

Eric A. Kades

When legislatures alter corporate, partnership, and other business entity statutes, they simultaneously amend the governing document of all entities of that type formed within the jurisdiction. In many circumstances these business entities may wish to retain existing rules for internal governance. This Article offers a novel tool for firms wishing to so manage their own legal transitions: the "charter freeze." A freeze provision in the company charter declares that future (non-mandatory) changes in relevant statutes have no effect on the firm. Owners may affirmatively adopt the new rules, but choose to exercise complete control over their adoption vel non of …

The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol

Poonam Puri

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 …

Triumph Or Tragedy? The Curious Path Of Corporate Disclosure Reform In The U.K., Cynthia A. Williams, John M. Conley

Cynthia A. Williams

No abstract provided.

Rethinking The Nature Of The Firm: The Corporation As A Governance Object, Peer Zumbansen

Peer Zumbansen

This Article attempts to bridge two discourses—corporate governance and contract governance. Regarding the latter, a group of scholars has recently set out to develop a more comprehensive research agenda to explore the governance dimensions of contractual relations, highlighting the potential of contract theory to develop a more encompassing theory of social and economic transactions. While a renewed interest in the contribution of economic theory for a concept of contract governance drives one dimension of this research, another part of this undertaking has been to move contract theory closer to theories of social organization. Here, these scholars emphasize the “social” or …

Corporate Conduct That Does Not Maximize Shareholder Gain: Legal Conduct, Ethical Conduct, The Penumbra Effect, Reciprocity, The Prisoner's Dilemma, Sheep's Clothing, Social Conduct, And Disclosure, Melvin Aron Eisenberg

Melvin A. Eisenberg

Deals with the question of nonmaximizing corporate conduct. Types of corporate conduct that appear to be or are non nonmaximizing; Narration of the section 2.01 of the American Law Institute's `Principles of Corporate Governance' to shed understanding on the issue of nonmaximizing corporate conduct; Corporate philanthropy.

An Overview Of The Principles Of Corporate Governance, Melvin Aron Eisenberg

Melvin A. Eisenberg

Presents an overview of the book 'Principles of Corporate Governance' in the United States. Background architecture of the Principles of Corporate Governance of the American Law Institute; Explanations of the policy reasons of the provisions covered by the Principles; Restatement rules of the relevant law.

The Board Of Directors And Internal Control, Melvin A. Eisenberg

Melvin A. Eisenberg

No abstract provided.

The Conception That The Corporation Is A Nexus Of Contracts, And The Dual Nature Of The Firm, Melvin A. Eisenberg

Melvin A. Eisenberg

No abstract provided.

The Duty Of Good Faith In Corporate Law, Melvin A. Eisenberg

Melvin A. Eisenberg

An important development in corporate law is the recent explicit recognition, in a series of Delaware cases, that corporate managers owe a fiduciary duty of good faith in addition to their traditional duties of care and loyalty. The duty of good faith was not created by those cases. On the contrary, the duty has long been explicit under the statutes--for example, in statutory provisions that require directors to act in good faith, and in provisions concerning indemnification. The duty of good faith has also long existed implicitly in the case law--for example, in the formulation of the business judgment rule …

Creditors And Debt Governance, Charles K. Whitehead

Charles K Whitehead

This chapter from the book Research Handbook on the Economics of Corporate Law (Claire Hill & Brett McDonnell, eds.), provides an introduction to the law and economic theory relating to creditors and debt governance. The chapter begins with a look at the traditional role of debt, focusing on the impact of debt on corporate governance and, in particular, the effect of an illiquid credit market on creditors’ reliance on covenants and monitoring. It then turns to changes in the private credit market and their effect on lending structure. Greater liquidity raises its own set of agency costs. In response, loans …

On The Rise Of Shareholder Primacy, Signs Of Its Fall, And The Return Of Managerialism (In The Closet), Lynn Stout

Lynn A. Stout

In their 1932 opus "The Modern Corporation and Public Property," Adolf Berle and Gardiner Means famously documented the evolution of a new economic entity—the public corporation. What made the public corporation “public,” of course, was that it had thousands or even hundreds of thousands of shareholders, none of whom owned more than a small fraction of outstanding shares. As a result, the public firm’s shareholders had little individual incentive to pay close attention to what was going on inside the firm, or even to vote. Dispersed shareholders were rationally apathetic. If they voted at all, they usually voted to approve …

Who Sits On Texas Corporate Boards? Texas Corporate Directors: Who They Are & What They Do, Lawrence J. Trautman

Lawrence J. Trautman Sr.

Corporate directors play an important role in governing American business, in the capital formation process, and are fundamental to the stewardship of economic growth. Texas businesses play a disproportionately important role among the states in aggregate U.S. job creation, responsible for 37% of all net new American jobs since the post 2008-2009 recovery began. It is the job of the board of directors to govern the corporation. The duties and responsibilities of a corporate director include: the duty of care; duty of loyalty; and duty of good faith. This paper results from the author’s previously assembled biographical data for most …

Shareholder Engagement Through Informal Dialogue: A Perspective From Spanish Listed Companies, Javier Agudo

Javier Agudo

The purpose of this research is to further understand the behaviour of listed companies in the informal dialogue with their shareholders. While dialogue in CSR issues and the relations between IR officers and funds had already been studied, additional exploration was needed on dialogue regarding corporate governance and on the role of other company actors and external advisors in it. For this, a qualitative study was undertaken in the Spanish context. A total of eleven semi-structured interviews were conducted with directors of the board, heads of investor relations and secretaries of the board from various listed companies, together with proxy …

Corporate Culture And Erm, Michelle M. Harner

Michelle M. Harner

The attitudes and actions of those viewed as leaders within a company (commonly referred to as “tone at the top”) help to define corporate culture and are critical to implementing a successful enterprise risk management (ERM) program. This paper explores the challenges and benefits of creating a risk-aware corporate culture, including the potential legal implications for boards of directors.

Re-Enchanting The Corporation, Lyman P.Q. Johnson

Lyman P. Q. Johnson

No abstract provided.

Corporate Governance Reform In A Time Of Crisis, Christopher M. Bruner

Christopher M. Bruner

In this article I argue that crisis-driven corporate governance reform efforts in the United States and the United Kingdom that aim to empower shareholders are misguided, and offer an explanation of why policymakers in each country have reacted to the financial crisis as they have. I first discuss the risk incentives of shareholders and managers in financial firms, and examine how excessive leverage and risk-taking in pursuit of short-term returns for shareholders led to the crisis. I then describe the far greater power and centrality that U.K. shareholders have historically possessed relative to their U.S. counterparts, and explore historical and …

New Owners And Old Managers: Lessons From The Socialist Camp, Richard M. Buxbaum

Richard M. Buxbaum

No abstract provided.

Major Violations For The Ncaa: How The Ncaa Can Apply The Dodd-Frank Act To Reform Its Own Corporate Goverance Scheme, Jason Rudderman

Jason Rudderman

This paper applies the Dodd-Frank Act, and specifically its corporate governance laws, to the National Collegiate Athletic Associate (NCAA). The NCAA has experienced rapid, largely uncontrolled growth over the past decade that has led to an influx of corporate governance and regulatory problems within its member institutions. As with financial institutions, the influx of money itself is not the inherent problem. Money in college athletics is good. When large schools succeed, they help support smaller schools in their conference through revenue sharing plans. It is the lack of control and governance mechanisms regulating the influx of money that poses the …

El Traje Nuevo Del Emperador, Diego G. Pardow, Rodrigo Vallejo

Diego G. Pardow

This note is a public policy analysis on the duty of state-owned corporations to disclose their executive compensation plans.

Toward A Public Enforcement Model For Directors' Duty Of Oversight, Renee Jones, Michelle Welsh

Renee Jones

This Article proposes a public enforcement model for the fiduciary duties of corporate directors. Under the dominant model of corporate governance, the principal function of the board of directors is to oversee the conduct of senior corporate officials. When directors fail to provide proper oversight, the consequences can be severe for shareholders, creditors, employees, and society at large. Despite general agreement on the importance of director oversight, courts have yet to develop a coherent doctrine governing director liability for the breach of oversight duties. In Delaware, the dominant state for U.S. corporate law, the courts tout the importance of board …

Corporate Governance And Accountability, Renee M. Jones

Renee Jones

This book chapter on Corporate Governance and Accountability is a contribution to the book CORPORATE GOVERNANCE - SYNTHESIS OF THEORY, RESEARCH, AND PRACTICE (Wiley, forthcoming 2010), edited by Ronald Anderson and H. Kent Baker. This chapter describes the sources of corporate governance standards for American corporations and analyzes the accountability mechanisms designed to ensure that corporate officials act faithfully in their management of corporate affairs. The chapter focuses on the financial reporting system under the U.S. securities laws which forms the foundation of the accountability system, and discusses structures and rules designed to ensure the integrity of financial reporting. The …

Law, Norms, And The Breakdown Of The Board, Renee M. Jones

Renee Jones

This Article considers the dominant claim in corporate law literature that extra-legal mechanisms such as markets and social norms provide adequate safeguards against corporate mismanagement and opportunism. After noting recognized deficiencies in the arguments from market discipline, the Article draws on psychological insights to show that certain behavioral phenomena prevent social norms from appropriately constraining corporate conduct. It then argues that because neither markets nor social norms can sufficiently discipline corporate officials, a credible accountability mechanism is necessary to prevent director conduct standards from deteriorating. Unfortunately, an inveterate tradition of judicial deference in corporate law has undermined the role of …

International Law And Transnational Corporations: Towards A Final Summation, Varun Vaish

Varun Vaish

The regulation of transnational corporations (TNCs) by an international legal order fundamentally centred on states proves to be difficult when they exercise political influence and have the ability to generate revenue which can eclipse the economies of many countries in comparison. According to the World Investment Report 2007, as of 2006 there were 78,411 parent corporations and 777,647 affiliates worldwide.4 The scale of the concentration of economic power is illustrated by the statistics: of the world’s hundred largest economic entities, 51 are multinational companies and 49 are nation states. The Texaco Corporation functioned for years in Ecuador with annual global …

Law And Venture Capital: The Case Of Japanese Entrepreneurs, Zenichi Shishido

Zenichi Shishido

The biggest difference in the incentive bargains made in the venture capital industries in the US and Japan is that American entrepreneurs abandon control while Japanese entrepreneurs do not. Years ago, this difference was thought to be caused by a lack of liquid IPO markets by some experts in the field. However, there are currently multiple liquid IPO markets in Japan, yet Japanese entrepreneurs are still reluctant to abandon control of their companies to venture capitalists. While there are likely to be many complementary reasons for this difference, it can be partly explained by the different legal systems in the …

Creditors And Debt Governance.Pdf, Charles K. Whitehead

Charles K Whitehead

Behind Closed Doors: The Influence Of Creditors In Business Reorganizations, Michelle M. Harner, Jamie Marincic

Michelle M. Harner

General corporate law delegates the power to manage a corporation to the board of directors. The board in turn acts as a fiduciary and generally owes its duties to the corporation and its shareholders. Many courts and commentators summarize the board’s primary objective as maximizing shareholder wealth. Accordingly, one would expect a board’s conduct to be governed largely by the interests of the corporation and its shareholders. Yet, anecdotal and increasing empirical evidence suggest that large creditors wield significant influence over their corporate debtors. Although this influence is most apparent as the corporation approaches insolvency, the strength of the creditors’ …

The Corporation As Imperfect Society, Brian M. Mccall

Brian M McCall

Corporations are ubiquitous in modern society. They pervade every aspect of our life, consumer, professional, investment activity. Probably, people have more contact with corporations on a daily basis than any other institution, including government. From the South Sea Bubble to the Stock market Crash of 1929 to Enron to General Motors and Countrywide Mortgage, corporate scandals and controversies invite fundamental questions about corporate law. This article attempts to bring a fresh perspective to the question: “what is a corporation and how should the law treat it?” The article articulates a corporate metaphysics rooted in political philosophy. The dominant models of …