Law Commons^™

The Disaster At Bhopal: Lessons For Corporate Law?, Kent Greenfield

Kent Greenfield

Prepared for a conference at New England Law School marking the upcoming twenty-fifth anniversary of the disaster at Bhopal, this essay asks whether we have anything still to learn from what occurred in the early morning hours in Bhopal on December 3, 1984, and in the hours, days, and weeks that followed. Is there reason to believe, for example, that corporations have a tendency to create the context in which such disasters are more likely? More recent corporate behavior poses the same question, whether it pertains to environmental destruction, injuries to consumers, collusion with illegal governmental activities, or financial malfeasance. …

The Impact Of "Going Private" On Corporate Stakeholders, Kent Greenfield

Kent Greenfield

As capital markets in the United States increasingly "go private," it is unclear how the privatization of corporate finance will affect non-shareholder stakeholders of firms, most centrally employees, communities, and the environment. Some scholars and public policy experts believe that concern for such stakeholders should not hold any relevance in the discussion of corporate law in general, and thus may be presumed to believe the same about a conversation about privatization. In such a view, these concerns lie outside the realm of corporate governance law; they therefore should be of no great moment in the debate over whether public policy …

New Principles For Corporate Law, Kent Greenfield

Kent Greenfield

The fundamental assumptions of corporate law have changed little in decades. Accepted as truth are the notions that corporations are voluntary, private, contractual entities, that they have broad powers to make money in whatever ways and in whatever locations they see fit. The primary obligation of management is to shareholders, and shareholders alone. Corporations have broad powers but only a limited role: they exist to make money. Those who maintain these principles – a group that includes most of the legal scholars who teach and write in the area – have derived the narrow role of corporations in one of …

Democracy And The Dominance Of Delaware In Corporate Law, Kent Greenfield

Kent Greenfield

Among the grandest debates within corporate law is whether the dominance of Delaware is the result of a “race to the bottom” -- toward a legal regime that benefits managers at the expense of the shareholders -- or a “race to the top” -- toward an efficient, shareholder-centric governance framework. This paper argues that this debate is largely beside the point. Even if Delaware’s dominance is the result of a competition resulting in law that efficiently serves the interests of shareholders, it is nevertheless illegitimate. This is because the internal affairs doctrine, on which Delaware’s preeminence depends, in effect allows …

An Experimental Test Of Fairness Under Agency And Profit Constraints (With Notes On Implications For Corporate Governance), Kent Greenfield, Peter Kostant

Kent Greenfield

Building on the scholarship using ultimatum game experiments to explore the presence of fairness norms in bargaining exchanges, the authors test whether such norms are affected by agency relationships alone or agency relationships linked with a duty to maximize returns to the principal. The findings are dramatic. The study, the first of its kind, indicates a significant decrease in a concern for fairness (defined as a willingness to share a pot of money) when a participant in a bargaining transaction acts as an agent for another and owes a duty to maximize the return to the principal. We find no …

The Shareholders' Role To Foster Corporate Governance In Bangladesh : A Suggestive Review, Dr. Zahid Rafique Zr

Dr. Zahid Rafique ZR

Abstract This paper unveils the issues on shareholders’ activism to secure the desirable corporate governance in Bangladesh .The focal point is the motive and the nature of shareholders in company dealings. Factually, the prime agenda as observed of the shareholders to get profit affects the activities of a company and in Bangladesh, corruption has a curious link with shareholders some of whom thinks of dividend only irrespective of transparency and accountability. The dominating and controlling thought obsesses some shareholders who fear the disclosure and the losing of control over company they have set up. This creates rational apathy into the …

Private Ordering With Shareholder Bylaws, Gordon Smith, Matthew Wright, Marcus Hintze

D. Gordon Smith

Finding Shelter In A Time Of Crisis: A Process-Oriented Approach To Risk Management, Kristin Johnson

Kristin N Johnson

Success in financial markets rests on the effectiveness of a business’s risk management strategy: manage risks well and profits follow; fail to manage risks and a crisis ensues. It has long been evident that inadequate enterprise risk management policies, or internal risk-reducing strategies, create perilous consequences for a business. The recent financial crisis illustrates that the often disparate regulatory guidance and multiplicity of regulators who influence enterprise risk management policies were ill-suited to address conflicts and weaknesses in risk management accountability and enforcement mechanisms. During the crisis, a chorus of commentators demanded a federal solution to address the devastating economic …

Corporate Governance And Competition Policy, Spencer Weber Waller

Spencer Weber Waller

Corporate Governance and Competition Policy

Spencer Weber Waller

Abstract

Corporate governance law addresses the misaligned incentives between officers and directors of publicly-owned companies and their shareholders, and how this can lead to the destruction of shareholder value. Antitrust law governs the interaction between corporations and other economic actors in the marketplace and prohibits and penalizes anticompetitive agreements, unilateral conduct which unreasonably injures competition, and mergers and acquisitions which may substantially lessen competition.

This article explores the puzzling lack of meaningful interaction between these two fields of law which govern the internal and external operations of key economic players in our …