Law Commons^™

Startup Biases, Jennifer S. Fan

Articles

This Article provides an original descriptive account of bias in the startup context and explains why litigation is eschewed and what happens when it is used as a mechanism to combat bias in the venture capital ecosystem. Further, this Article identifies two particular phenomena in the startup context that exacerbate gender and racial bias. First, homophily—the idea that like attracts like—abounds and has been part of the DNA of venture capital since its inception. The thick networks that developed as venture capital made its way from the East Coast to the West Coast were limited to an elite group that …

Woke Capital Revisited, Jennifer S. Fan

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Inclusive corporate leadership is now at the forefront of discussions related to corporate governance. Two corporate theories help to explain the rise in prominence of diversity, equity, and inclusion (“DEI”) efforts in corporate leadership. First, an expanded definition of corporate purpose which elevated the idea of the importance of stakeholders, contributed to the momentum from business and legal quarters for broader corporate inclusion. Second, the increasing publicness of corporations—the social expectation of how large, typically public corporations should act given their position of power—also led to corporations becoming more active in the DEI space. It is against this backdrop that …

Blockchain Games And A Disruptive Corporate Business Model, Xuan-Thao Nguyen

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This Article is the first to identify and theorize on a new disruptive corporate business model unfolding in the gaming industry that is larger than both the movie and music sectors combined. Corporations in blockchain gaming reject the old paradigm of amassing profits by turning the public into spenders for and consumers of corporate products. The new corporate business model transforms members of the public into producers and true owners of new corporate property while earning income and garnering governance voting rights. Through a case study of Axie Infinity, a blockchain game launched in 2021, this Article explores how the …

The Landscape Of Startup Corporate Governance In The Founder-Friendly Era, Jennifer S. Fan

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In corporate governance scholarship, there is an important debate about the nature and roles of the members of the board of directors in venture capital-backed private companies. The impact of a newly emerged, founder-centric model has been underappreciated, while the role of the independent director as tiebreaker or swing vote is vastly overstated. The reality is that corporate governance in these companies is a norm-driven, consensus-building process that rarely spills out into open conflict.

This is the first empirical study of startup corporate governance post-Great Recession and during the pandemic. Using survey and interview methodologies, this Article makes four primary …

#Metoo Innovators: Disrupting The Race And Gender Code By Asian Americans In The Tech Industry, Xuan-Thao Nguyen

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This Article focuses on how Asian American women innovators of the #MeToo generation are disrupting the code of conduct in the tech industry. The code is hard-wired into the tech bro culture of mirrortocracy, resulting in hiring practices that perpetuate existing company demographics and statistics that show that Asian American women face 2.91 times the disadvantage compared to white women. In addition, of all gender and racial groups, Asian American female innovators are the least likely to become executives. This Article identifies and explains how these innovators are the disruptors on several fronts. Utilizing everything from judicial means to traditional …

Employees As Regulators: The New Private Ordering In High Technology Companies, Jennifer S. Fan

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There is mounting public concern over the influence that high technology companies have in our society. In the past, these companies were lauded for their innovations, but now as one scandal after another has plagued them, from being a conduit in influencing elections (think Cambridge Analytica) to the development of weaponized artificial intelligence, to their own moment of reckoning with the #MeToo movement, these same companies are under scrutiny. Leaders in high technology companies created their own sets of norms through private ordering. Their work was largely unfettered by regulators, with the exception of the Securities and Exchange Commission’s oversight …

Innovating Inclusion: The Impact Of Women On Private Company Boards, Jennifer S. Fan

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Eight percent—that is the percentage of women who serve on the boards of directors of private high technology companies. Private companies, particularly high technology companies, have transformed citizens’ daily lives, while the unprecedented availability of private capital has allowed those companies to remain private longer. This rise, however, has also obscured some of the weaknesses of private companies, which are not subject to public disclosure and regulatory oversight: rampant sexual harassment, the lack of women leaders in technology companies, the relative absence of female venture capitalists, and the dearth of female board members, to name a few. Yet thus far, …

Woke Capital: The Role Of Corporations In Social Movements, Jennifer S. Fan

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Iconic companies such as Apple, BlackRock, Delta, Google (now Alphabet), Lyft, Salesforce, and Starbucks, have recently taken very public stances on various social issues. In the past, corporations were largely silent in the face of them. Now the opposite is true—corporations play an increasingly visible role in social movements and there are times when corporations have led the discussion, particularly in areas where they have a self-interest or public opinion supports it. The enormous influence corporations wield on both the economic and social fabric of our society due to the legal framework and norms under which they operate make them …

From Governess To Governance: Advancing Gender Equity In Corporate Leadership, Kellye Y. Testy

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Even as corporate influence on every aspect of life continues to grow, women (overall, and especially women of color) remain woefully underrepresented in corporate governance roles, particularly on boards of directors. This lack of gender diversity in the corporate boardroom is prevalent not only in more established companies but also persists—often at even higher levels— in new ventures as well. This Essay details the persistent lack of progress over more than a half century in diversifying leadership in corporate governance. This progress is especially concerning given that the benefits of diversity for sound decisionmaking and overall corporate welfare have been …

Astroturf Activism, Melissa J. Durkee

Articles

Corporate influence in government is more than a national issue; it is an international phenomenon. For years, businesses have been infiltrating international legal processes. They secretly lobby lawmakers through front groups: “astroturf” imitations of grassroots organizations. But because this business lobbying is covert, it has been underappreciated in both the literature and the law.

This Article unearths the “astroturf activism” phenomenon. It offers an original descriptive account that classifies modes of business access to international officials and identifies harms, then develops a critical analysis of the laws that regulate this access. I show that the perplexing set of access rules …

The Business Of Treaties, Melissa J. Durkee

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Business entities play important and underappreciated roles in the production of international treaties. At the same time, international treaty law is hobbled by state-centric presumptions that render its response to business ad hoc and unprincipled.

This Article makes three principal contributions. First, it draws from case studies to demonstrate the significance of business participation in treaty production. The descriptive account invites a shift from attention to traditional lobbying at the domestic level and private standard-setting at the transnational level to the ways business entities have become autonomous international actors, using a panoply of means to transform their preferred policies into …

Regulating Unicorns: Disclosure And The New Private Economy, Jennifer S. Fan

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“Unicorns” are private companies with valuations of a billion dollars or more. As their name indicates, unicorns were originally so rare as to be almost mythical. But Uber and other technology companies have ushered in a new era: we now have a blessing of unicorns, each one of which has the potential to transform financial and cultural norms.

Yet from a legal perspective, these behemoths are regulated just like their much smaller, non-mythical counterparts. Unicorns’ dizzying valuations have not been matched with any expansion or recalibration of regulation. As a result, vital information about these companies remains secret, perhaps for …

Corporate Social Responsibility Versus Business And Human Rights: Bridging The Gap Between Responsibility And Accountability, Anita Ramasastry

Articles

This article explores the evolution of business and human rights (BHR) from a lawyer’s perspective and examines how it is contextually and conceptually different from corporate social responsibility (CSR) in its aims and ambitions. While CSR emphasizes responsible behavior, BHR focuses on a more delineated commitment in the area of human rights. BHR is, in part, a response to CSR and its perceived failure. This has led to a gap with two disciplines or strands of discourse that are diverging rather than converging. This article explores how the quest for accountability shapes a very different narrative for BHR, which takes …

White Paper: Options For A Treaty On Business And Human Rights, Anita Ramasastry, Douglass Cassell

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The United Nations Human Rights Council decided in June 2014 to establish an Intergovernmental Working Group to “elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises.” The first meeting of the Working Group took take place in Geneva in July 2015. The Council did not further specify what sort of instrument should be drafted. The Center for Human Rights of the American Bar Association and the Law Society of England and Wales asked the present authors to prepare a “White Paper” on possible options for a treaty …

Too Many Tiaras: Conflicting Fiduciary Duties In The Family-Owned Business Context, Karen E. Boxx

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Family-owned businesses have been called the "backbone of the U.S. economy," but passing control of a family business to the next generation is so complex that the majority of family businesses do not survive the transition. A common scenario that leads to problems is where owners want to leave the business to their children but only one child is interested in and capable of managing the business.

A popular solution is to leave the interested child an equal share of the business, together with management control, and leave the other children's interests in the business in trust, with the manager …

Translating Unocal: The Expanding Web Of Liability For Business Entities Implicated In International Crimes, Anita Ramasastry, Robert C. Thompson, Mark B. Taylor

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The Ninth Circuit ruled that a corporation could be held liable under the federal Alien Tort Claims Act for its complicity in a violation of international criminal law occurring outside the U.S. (Doe I v. Unocal Corp., 395 F.3d 932 (9th Cir. 2002)). Since then, litigants have filed increasing numbers of such cases. These cases raise two questions: (1) Is the United States the only country that provides judicial accountability for business entities involved in international crimes abroad? and (2) How are other countries "translating" the basic kinds of accountability that Unocal recognized into their own legal systems? This Article …

Transitioning The Family Business, Dwight Drake

Articles

By any measure, family-dominated businesses are the backbone of the American economy. Although a large majority of family businesses are managed by senior family members who are older than age 55 and more than 80 percent of such senior family members claim that they want the business to remain in the family, less than 30 percent of such businesses have tackled the challenge of developing a plan for transitioning the business to the next generation.

For over 90 percent of such families, this planning challenge is aggravated by the fact that they have no diversified wealth: the family’s wealth is …