Business Organizations Law Commons^™

Raising Corporate Consciousness Of Employer Liability For Video Zoom While Driving, Nanci K. Carr

William & Mary Business Law Review

Imagine that you have logged onto a video Zoom meeting, and you notice that one of the participants is driving. He fumbles with the phone, trying to align the camera with his face, looking from the phone to the road ahead. Other participants on the call either say nothing or thank him for being willing to participate from his car. That is distracted driving, and if he collides with a car or pedestrian due to that distraction, each of those meeting participants could be held liable for distracting the driver. In addition, they would be witnesses to his distracted driving …

Emergency Bylaws: An Underutilized Tool For Corporate Operation During An Emergency, Grace Myers

William & Mary Business Law Review

Emergency bylaws are an underutilized tool for corporate governance whose importance has been highlighted by COVID-19. Emergency bylaws can be included within corporations’ bylaws and only operate during an “emergency” as defined by state statutes. These provisions usually give boards more agency to act during an emergency through mechanisms such as looser quorum and notice requirements. These provisions will be increasingly important during future pandemics, wars, and global warming. However, few corporations have these bylaws, and the current hodgepodge of state statutes hinders their adoption. The current state of emergency bylaws regulation and implementation raises some questions about shareholder rights …

The Instrumental Case For Corporate Diversity, Naomi Cahn, June Carbone, Nancy Levit

Faculty Works

The moral case for diversity in businesses is compelling. The business case for diversity (that “diverse companies do better”) is mixed: studies in the business literature do not prove that simply adding diversity causes the improvement; instead, they posit that the improvement is likely to be “endogenous,” that is, the factors that encourage and sustain diversity, such as greater transparency, also improve financial performance. In this article, we make what we call “the instrumental case for diversity.” If the same factors that correlate with greater diversity also correlate with improved performance, then greater diversity can be a benchmark for better …

The Partnership Mystique: Law Firm Finance And Governance For The 21st Century American Law Firm, Maya Steinitz

William & Mary Law Review

This Article identifies and analyzes the de facto and de jure end of lawyers’ exclusivity over the practice of law in the United States. This development will have profound implications for the legal profession, the careers of individual lawyers, and the justice system as a whole.

First, the Article argues that various financial products that have recently flooded the legal market are functionally equivalent to investing in and owning law firms and create all the same governance challenges as allowing nonlawyers to directly own stock in law firms.

Second, the Article analyzes Arizona’s groundbreaking legalization of nonlawyer participation in law …

The Partnership Mystique: Law Firm Finance And Governance For The 21st Century American Law Firm, Maya Steinitz

Faculty Scholarship

This Article identifies and analyzes the de facto and de jure end of lawyers' exclusivity over the practice of law in the United States. This development will have profound implications for the legal profession, the careers of individual lawyers, and the justice system as a whole.

First, the Article argues that various financial products that have recently flooded the legal market are functionally equivalent to investing in and owning law firms and create all the same governance challenges as allowing nonlawyers to directly own stock in law firms.

Second, the Article analyzes Arizona's groundbreaking legalization of nonlawyer participation in law …

Corporate Governance Reform And The Sustainability Imperative, Christopher Bruner

Scholarly Works

Recent years have witnessed a significant upsurge of interest in alternatives to shareholder-centric corporate governance, driven by a growing sustainability imperative—widespread recognition that business as usual, despite the short-term returns generated, could undermine social and economic stability and even threaten our long-term survival if we fail to grapple with associated costs. We remain poorly positioned to assess corporate governance reform options, however, because prevailing theoretical lenses effectively cabin the terms of the debate in ways that obscure many of the most consequential possibilities. According to prevailing frameworks, our options essentially amount to board-versus-shareholder power, and shareholder-versus stakeholder purpose. This narrow …

What’S In The Forecast For The Spac Boom & The Pslra?, Nick Krone

SLU Law Journal Online

Special Purpose Acquisition Companies (SPACs) have exploded in popularity. These so-called “blank check” companies are used as vehicles to take companies public without going through a traditional IPO process. Financial projections in SPACs are currently protected by the safe harbor for forward-looking statements afforded by the Private Securities Litigation Reform Act (PSLRA). In this article, Nick Krone examines whether SPACs should be protected by the PSLRA.

Law School News: The Dean Meets The Governor 01-26-2022, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

Monsanto: Creator Of Cancer Liability

DePaul Business & Commercial Law Journal

No abstract provided.

Impact Of Corporate Response To Controversial Presidential Statements Or Policies

DePaul Business & Commercial Law Journal

No abstract provided.

Shareholder Activism & Departure From Board Centrism: Beware Of Federal Government’S Intervention, Artur Aziev

The Journal of Business, Entrepreneurship & the Law

No abstract provided.

Contractual Stakeholderism, Kishanthi Parella

Scholarly Articles

In 2019, the Business Roundtable announced its commitment to all corporate stakeholders—consumers, employees, suppliers, and communities—and not just shareholders. This announcement has reawakened an old debate over corporate social responsibility. Stakeholderism advocates argue that corporate leaders must consider the interests of the various stakeholders impacted by corporate decision-making. Stakeholderism critics challenge this view, expressing concerns that stakeholderism will magnify managerial agency costs, chill regulation, risk inauthenticity, and lead to impractical solutions.

This Article proposes “contractual stakeholderism” to operationalize stakeholderism in accordance with the views of its advocates but in a way that is attentive to the concerns of its critics. …

Corporate Governance And The Feminization Of Capital, Sarah C. Haan

Scholarly Articles

At the start of the twentieth century, women made up a small proportion of shareholders in American publicly traded companies. By 1956, women were the majority of individual shareholders. Although this change in shareholder gender demographics happened gradually, it was evident early in the century: Before the 1929 stock market crash, women shareholders had come to outnumber men at some of America’s largest and most influential corporations, including AT&T, General Electric, and the Pennsylvania Railroad. This Article synthesizes information from a range of historical sources to reveal an overlooked narrative of corporate history—the feminization of capital, or the transformation of …

Leadership For The Transactional Business Law Student, Joan Macleod Heminway

Scholarly Works

We do not always acknowledge this in legal education, but our students are learning to be leaders, because lawyers are leaders. That is as true of transactional business lawyers as it is of litigators, lawyers who hold political or regulatory appointments, lawyers engaged with compliance, and lawyers in general advisory practices. Yet, most law schools do little, if anything, to teach law students about leadership, or allow them to explore the contours and practices of lawyer leadership.

This edited transcript explains the importance of teaching leadership skills, traits, and processes to transactional business law students and offers insights on how …

Why Corporate Purpose Will Always Matter, Lyman P.Q. Johnson

Scholarly Articles

Business persons and lawyers (and law professors) perennially struggle over the question whether a business corporation does or should have a purpose other than advancing the interests of shareholders. After briefly setting the stage by describing the dispute over what the positive law of corporate purpose really is and the normative argument over what corporate purpose should be, this short article takes a different turn. It addresses why, in a dynamic, democratic, pluralist society, the foundational issue of corporate purpose remains so important and will not (and should not) go away. However adamantly divergent descriptive and prescriptive positions are held, …

Shareholder Appraisal Rights: Delaware’S Flawed Market-Out Exception, Lin (Lynn) Bai, William A. Murphy

Faculty Articles and Other Publications

State statutes give dissenting shareholders an appraisal right in some, but not all corporate mergers. A widely adopted market-out exception denies appraisal if the shares are publicly traded. The rationale for market-out is that the public market offers a reliable valuation of the stocks and a convenient exit to dissenting shareholders. A major criticism of market-out is that market prices may not reflect the full value of the shares due to information asymmetry in mergers involving conflicts of interests. Delaware’s market-out approach is drastically different from that adopted by the Model Business Corporation Act (MBCA), but both have a significant …

Teaching Theranos, Priya Baskaran

Tennessee Law Review

The story of Theranos and disgraced CEO Elizabeth Holmes highlights numerous missed opportunities for effective intervention by corporate counsel. In particular, the lawyers at Theranos served as weak gate-keepers who were easily steamrolled by a power-drunk entrepreneur. The dominant business law pedagogy contributes to this problem by emphasizing litigation mitigation as the primary function of corporate lawyers. This framing improperly minimizes the role and influence of transactional attorneys to the detriment of all involved. Law Professors can change this narrative through much needed pedagogical innovation. Currently, any innovation in business law courses centers on the incorporation of drafting and other …

Anonymous Companies, William J. Moon

Faculty Scholarship

Hardly a day goes by without hearing about nefarious activities facilitated by anonymous “shell” companies. Often described as menaces to the financial system, the creation of business entities with no real operations in sun-drenched offshore jurisdictions offering “zero percent” tax rates remains in vogue among business titans, pop stars, multimillionaires, and royals. The trending headlines and academic accounts, however, have paid insufficient attention to the legal uses of anonymous companies that are both ubiquitous and almost infinite in their variations.

This Article identifies privacy as a functional feature of modern business entities by documenting the hidden virtues of anonymous companies—business …

Sustainability Verification, Paul Rose

American University Law Review

From the earliest stages of the sustainable finance market and of green, social, and sustainable debt as an asset class, sustainability verifiers have been essential to the market’s function. Sustainability verifiers—professional service providers who provide an external review of an issuer’s alignment with established green bond frameworks—play a crucial role in reducing information asymmetries between sustainable finance instrument issuers and investors and serve as reputational intermediaries that assure buyers of the seller’s green, social, and sustainability-centered commitments. Yet, despite their essential function in facilitating the investment of trillions of dollars in green, social, and sustainable finance investments, the role and …

Racial Capitalism: Complexities With Enforcing Corporate Commitments To End Racial Injustice, 55 Uic L. Rev. 519 (2022), Natè Simmons

UIC Law Review

No abstract provided.

The “Corporation Revolution” And The Professional Ethics Of Giving Advice On Executive Protection Issues, Sarah Helene Duggin, Shannon "A.J." Singleton, James D. Wing

Scholarly Articles

In today's law enforcement environment, business entities facing criminal investigations and possible indictment have little practical choice but to cooperate with authorities. Cooperation offers the opportunity to avoid a costly trial and attendant adverse reputational, financial, and morale impacts. Resolution of potential criminal charges, however, almost always requires entities to cooperate with law enforcement efforts to impose criminal liability on individual business executives.

While businesses and their executives once generally perceived their interests as closely aligned, the “Cooperation Revolution” of the last few decades has forced corporate boards and business executives to reassess their individual obligations and risks. In so …

Combatting Wage Theft In Global Supply Chains: A Proposal For Transnational Wage Lien Laws, Nabila N. Khan

LL.M. Essays & Theses

When the world went into lockdown due to the COVID-19 pandemic, major fashion brands attempted to protect their profits by refusing to pay overseas suppliers for over $16 billion USD of goods between April and June 2020. These decisions had a devastating impact on garment workers who toil at the bottom of the supply chain; thousands of garment workers and their families faced wage theft, dealing with months of unpaid wages, benefits and/or severance pay. In the absence of a regulatory framework to hold corporations responsible, workers, unions, and NGOs resorted to naming and shaming brands into taking action. However, …

The Complex Dualisms Of Corporations And Democracy, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

These are perilous times for American democracy. Among the threats, many point to the power of corporations. This article examines that threat by considering a series of dualisms characterizing the relationship between corporations and democracy. This begins with a look at the anti- as well as the pro-democratic impacts of the earliest corporations and the paradoxes with respect to democracy created during the evolution of corporate law. The article then looks at internal corporate governance (so-called “corporate” or “shareholder democracy”) to show how, on the one hand, it contains features addressing some of the greatest current threats to American democracy, …

Legal And Market Initiatives To Increase Diversity In Corporations—A Cross-Jurisdictional Analysis, Akshaya Kamalnath

Seattle University Law Review

This Article will critically examine various legal and market initiatives to increase diversity in corporations, with the aim of assessing their effectiveness. The initiatives explored in this Article include quota laws in Europe (including recent amendments in France and Germany which introduce quotas for executive director positions) and California; disclosure laws in the U.S., Nasdaq, and U.K.; and initiatives by institutional investors. The main argument this Article makes is that both quotas and quantitative disclosures do not provide the right incentives for corporations to make genuine efforts to improve diversity. The alternative this Article proposes is not to simply leave …

The Implications Of Corporate Political Donations, Benjamin P. Edwards

Scholarly Works

No abstract provided.

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

Articles

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 …

Toward A Fair And Sustainable Corporate Governance System: Reflections On Leo Strine, Jr.'S Writing On Institutional Investors, Dorothy S. Lund

Faculty Scholarship

It is a privilege to contribute to this Festschrift for my friend, mentor, and co-author, Leo Strine, Jr. It is also a pleasure to revisit his vast body of work and to re-experience the breadth and depth of his scholarship, as well as reflect on his unparalleled influence on the development of corporate law that he brought about while presiding over its most influential courts for twenty-one years.

In thinking about this essay, I recalled a conversation that I had with “CJS” when I was serving as his law clerk. In this conversation, he decried (with James Taylor blasting in …

Crime And The Corporation: Making The Punishment Fit The Corporation, John C. Coffee Jr.

Faculty Scholarship

The debate over corporate criminal liability has long involved a fight between proponents who argue that corporate liability is necessary for effective deterrence and opponents who claim that it “punishes the innocent.” This Article agrees and disagrees with both sides. Corporate criminal liability could play a critical role in establishing an effective deterrent to organizational misconduct, but today it largely fails. Currently, we have a system that combines Deferred Prosecution Agreements, Non-Prosecution Agreements, and extraordinarily generous sentencing credits for compliance plans that have failed, and the result is a system that is more carrots than sticks. The evidence seems clear …

Agents Of Inequality: Common Ownership And The Decline Of The American Worker, Zohar Goshen, Doron Levit

Faculty Scholarship

The last forty years have seen two major economic trends: wages have stalled despite rising productivity, and institutional investors have replaced retail shareholders as the predominant owners of the U.S. equity markets. A few powerful institutional investors — dubbed common owners — now hold large stakes in most U.S. corporations. And in no coincidence, when U.S. workers acquired this new set of bosses, their wages stopped growing while shareholder returns increased. This Article explains how common owners shift wealth from labor to capital, thereby exacerbating income inequality.

Powerful institutional investors pushing public corporations en masse to adopt strong corporate governance …

The Future Of Board Time And Priorities, Janet Foutty, Eric L. Talley, Carey Oven, Erica Mitnick Klein, Maureen Bujno, Katherine Waldock, Molly Calkins, Lyssa Bantleon Little, Caroline Schoenecker

Faculty Scholarship

“Houston, we’ve had a problem.”

Popularized by the 1995 film Apollo 13, this one line signals a dramatic turning point in the story of the 1970 mission to land three people on the surface of the moon.

It recounts the pivotal moment when carefully laid plans for a 33-hour stay on the moon are about to go awry. The very purpose of the mission — two space walks, a series of geological surveys, and the placement of scientific instruments that would send data back to Earth for long after — is in jeopardy.

It is the moment when the playbook …