Business Organizations Law Commons^™

Esg Is Not Libertarian: A Response To Jonathan Macey, Allen Mendenhall, Daniel Sutter

Emory Business Law Review

Investing, like any market activity, is voluntary. Investors may invest however they wish, whether to maximize returns, minimize risk, or support what they view as good causes. Is the current Environmental, Social and Governance (ESG) movement a libertarian embrace of socially responsible investing, as Jonathan Macey has argued? We answer with a definite no for several reasons. Government policies impel much ESG investment, most prominently through clean energy transition and financial regulations. Most ESG investment dollars stem not from investor decisions but from potential opportunism by managers of public pensions and sovereign wealth funds. Much investor activism for ESG results …

Oppression On The Blockchain, Erwin J. Kwok, Moin A. Yahya

Emory Business Law Review

When Ethereum (ETH) shifted from a Proof of Work (PoW) protocol to a Proof of Stake (PoS) protocol, not all users were enthused. We use Ethereum’s shift from PoW to PoS as a case study for the broader question of whether developers of a blockchain owe its members certain fiduciary or fiduciary-like duties. We argue that if done properly, in accordance to the rules governing the blockchain, then developers do not necessarily owe fiduciary responsibility to other members of the chain, but they nonetheless may owe fiduciary-like responsibilities to users inadvertently and negatively impacted. We argue these users may be …

Justice On Trial: Integrating Ethics In Law School Advocacy Courses, Veronica J. Finkelstein

Emory Business Law Review

The rule of law depends not only on legal doctrine and institutional design, but on the daily ethical choices of the lawyers who operate within the adversarial system. Trial lawyers, in particular, wield extraordinary power courtroom outcomes, yet law schools too often train future advocates to perform persuasive techniques without meaningful engagement with the ethical obligations that constrain those techniques and the lawyers who wield them. This article argues that the persistent separation between trial advocacy education and legal ethics instruction leaves law students ill-prepared for the moral complexities of litigation and threatens public confidence in the justice system.

Tracing …

Summoning Firms: Promoting Democratic Stability And Economic Prosperity In Times Of Constitutional Crisis, Jon D. Michaels

Emory Business Law Review

No abstract provided.

Illiberal Democracy, Merger Regulation, And Corporate Culture, Brian Jm Quinn

Emory Business Law Review

This Essay examines how the second Trump Administration has weaponized merger regulation and regulatory approval processes as tools of corporate capture in service of democratic backsliding toward an illiberal regime. Drawing on theoretical frameworks of competitive authoritarianism and illiberal democracy, this paper demonstrates how discretionary regulatory authority combined with weakened enforcement mechanisms creates opportunities for grand corruption that systematically undermines liberal democratic institutions.

This Essay accomplishes three primary objectives. First, it establishes the essential characteristics of illiberal regimes which maintain the facade of democratic institutions while systematically skewing the political playing field through selective enforcement and regulatory capture. Second, it …

No 'Dexit': Delaware's New Statutory Corporate Law Loosens The Restrictions On Controlling Shareholder Transactions In Response To Corporate Outlash Following Tornetta V. Musk, Reid A. Manabat

Emory Business Law Review

The recent Tornetta v. Musk decisions caused upheaval in the Delaware corporate community. Throughout 2024, shareholder executives have left or threatened to leave Delaware to incorporate elsewhere in a move termed “DExit.” The threat did not go unnoticed by Delawareans and lawmakers who contemplated a two-billion-dollar loss to the state’s tax revenue. Despite the courts’ willingness to require heightened scrutiny for conflicted-controller transactions, in recent years lawmakers have lowered the bar. I argue that Delaware’s new statutory corporate law does not adequately protect minority shareholders from conflicted controllers. First, the new statutory cleansing mechanisms ignore the unique dangers of conflicted-controller …

Quantum Ai And The Future Of Corporate Law, Michael R. Siebecker

Cardozo Law Review

As quantum computing and AI surge toward mainstream adoption, how corporate directors satisfy their duties of care and oversight requires some fiduciary recalibration. The current fiduciary framework that allows directors to escape liability absent “gross negligence” or “utter failure” in oversight may no longer be defensible in a world where advanced analytics offer unprecedented capacity to model, monitor, and foresee significant corporate risks. Behavioral economics makes clear that humans (including corporate managers) remain vulnerable to a variety of biases and heuristics shortcuts in decision making. Technological evolution provides the means to correct such cognitive distortions if boards take an active …

The Fiduciary Game, Lauren R. Roth

Elisabeth Haub School of Law Faculty Publications

Fiduciary duties are supposed to bridge the gap between public and private law. Private actors who engage in “public or quasi-public” functions (e.g., corporate directors and pension administrators) are often subject to fiduciary constraints to protect vulnerable parties who lack power in relationships with these actors. Recently, scholars have argued that both courts and legislatures have inappropriately expanded the use of fiduciary duties to purely private relationships. But what if the problem is not the expansion of fiduciary duties to private relationships, but the increasing delegation of public powers to private actors whose behavior cannot be adequately constrained by fiduciary …

Sustainability Assurance, Andrew F. Tuch, Luca Enriques, Alessandro Romano

Scholarship@WashULaw

A robust literature examines sustainability disclosures by public corporations, but legal scholarship has largely overlooked the role of third-party assurance—or verification—of such disclosures. This is a notable omission given the extensive literature on the auditing of financial statements, a related form of assurance.

This article responds by examining the role of assurance in sustainability reporting. In keeping with the theme of this symposium volume, it draws on US and EU law. Our discussion begins in Part I with sustainability disclosures, focusing on the requirements and practices of public companies. In Part II, we introduce sustainability assurance as well as assurance …

The Shareholder’S Standing To Challenge The Exercise Of Directorial Power: Tianrui (International) Holding Company V China Shanshui Cement Group Ltd, Pearlie M. C. Koh

Research Collection Yong Pung How School Of Law

An enduring problem with the proper purposes duty is the apparent right of the shareholder to enforce the same despite the duty being owed to the company. The cases on the proper purpose duty have thus far simply assumed the right of the shareholder to do so without dealing with the question of standing. In Tianrui (International) Holding Company Ltd v China Shanshui Cement Group Ltd, the Privy Council dealt with this issue directly and affirmed the shareholder's right to bring the action on the basis of the statutory contract constituted by the memorandum and articles of association of the …

Flows, Financing Decisions, And Institutional Ownership Of The U.S. Equity Market, Alon Brav, Dorothy S. Lund, Lin Zhao

Faculty Scholarship

This Article analyzes the relationship between flows to institutional investment managers, corporate financing decisions, and institutional ownership of U.S. public equity. In so doing, it provides new evidence about the drivers of institutional investor growth in equity ownership over the past two decades. Contrary to conventional narrative, we find that equity capital flows into the “Big Three” investment managers have slowed in recent years, with substantial differences between each institution. We also present a framework to understand how fund characteristics and corporate actions such as stock buybacks and equity issuances combine to shape the evolution of institutional ownership, including that …

"Activist" Versus "Passive" Investors: A Closer Look At Proxy Contests And The Contemporary Balance Of Advantage, John C. Coffee Jr.

Faculty Scholarship

The era of the hostile takeover has clearly given way to the era of the proxy contest led by an activist hedge fund. Today, a record number of such contests are underway, and they have changed the board composition at many U.S. companies and caused a record number of CEO resignations. But there is a mystery here: when activist funds negotiate for changes with target managements, they often obtain meaningful changes in the board of directors and corporate policies. However, when activists attempt a proxy contest, they have generally been unsuccessful, winning only a small number of seats in a …

Politics As Usual: Racial Pay Inequity And The Illusion Of Inclusion In The Rise And Fall Of Diversity, Equity, Inclusion, And Accessibility Executive Orders, Francois C. Melville

West Chester University Graduate Theses, Dissertations, and Final Projects

This research examines pressing moral policy questions of our time: who determines when the United States of America has fulfilled its broken promise of equality for all, and what constitutes an appropriate measure of reparative justice. It interrogates why the Diversity, Equity, and Inclusion (DEI) Executive Orders (EOs) implemented across presidential administrations, intended to advance social equity, were grounded in conflict and symbolic gestures rather than scientifically evidenced issues such as wage inequality directly linked to upward career mobility. Race conscious policy generates cultural clashes centered on the perception that gains made by Black and Brown Americans come at the …

Trophy Assets, Aneil Kovvali

Articles

Rich people like to own things that make them look cool. When the thing in question is a car, house, or boat, the implications are limited. But sometimes very rich people own assets that are more important. Within media, Elon Musk acquired Twitter, Jeff Bezos ac-quired the Washington Post, and Patrick Soon-Shiong acquired the Los Angeles Times. There has also been a craze for aerospace: Musk with Space X, Bezos with Blue Origin, Richard Branson with Virgin Galactic, and going back further, Howard Hughes with Hughes Aircraft Company. It is often difficult to understand the behavior in purely finan-cial terms, …

Corporate Cybersecurity Governance: Director Liability Under Europe’S Nis2 Directive And The Emerging Fiduciary Duty Of Proactive Cybersecurity Oversight, Stacey B. Barrack

American University Business Law Review

This Comment examines the implications of the European Union’s Network and Information Security 2 Directive (“NIS2”) on corporate cybersecurity governance, with a particular focus on the fiduciary duties of directors in multinational corporations operating in the United States. The NIS2 Directive, adopted in 2023 and currently being transposed into national law by EU member states, mandates that boards of directors must directly approve and oversee—and can be liable for—the cybersecurity risk management measures taken by their companies. 

This Comment delves into the intersection of NIS2 with Delaware corporate law and examines how NIS2 influences the fiduciary duty of oversight for …

Can Corporations Be Trusted? Voluntary Compliance And The Limits Of Non-Coercive Business Regulation, Yuval Feldman

American University Business Law Review

This Article extends the voluntary compliance framework developed in Can the Public Be Trusted? The Promise and Perils of Voluntary Compliance, to the corporate context. While recent scholarship has explored when states can rely on non-coercive regulatory approaches with individual citizens, comparatively little attention has been paid to whether these insights translate to business entities. This Article argues that corporations present both greater challenges and greater opportunities for voluntary compliance regimes. On one hand, the instrumental orientation of corporate decision-making, amplified by fiduciary duties and competitive pressures, may systematically undermine the intrinsic motivations that voluntary compliance frameworks depend upon. Drawing …

Finite Ventures, Andrew A. Schwartz

Publications

The law endows corporations and other business organizations with the awesome power of perpetual life—unless the charter expressly provides for a certain duration, such as ten years. But does anyone ever actually choose limited life? Why would they?

This article reveals that limited-life business entities—finite ventures—play a significant and underappreciated role in modern commerce. Private equity and venture capital funds, SPACs, and insurance syndicates are all organized with a limited lifespan.

Their motivation? This article claims that limited life is a valuable, but often overlooked, tool for ameliorating agency costs: the managers of a finite venture know they must produce …

The Spac Clock, Andrew A. Schwartz

Publications

Special purpose acquisition companies (SPACs) are public companies organized to die. Unlike ordinary corporations, which enjoy perpetual existence by default, SPACs are legally required to consummate a merger within a fixed period--usually two years, never more than three--or else liquidate and return investors' cash.

This Article takes that clock seriously and argues that limited life is foundational to the SPAC form: it disciplines sponsors by preventing indefinite warehousing of capital, reassures investors by guaranteeing liquidity, and makes the form marketable in the first place. A perpetual SPAC would be good for nobody.

At the same time, the SPAC clock distorts …

Are Private Equity Funds Liable For Anticompetitive Acquisitions?, Aslihan Asil, Paulo Henrique Alcantara Ramos, Amanda Starc, Thomas Wollmann

Faculty Scholarship

Private equity acquisitions grew tenfold over the past two decades. Over the same period, their focus shifted from financial engineering to industry consolidation, raising antitrust concerns. Heightening these concerns, privately backed acquisitions of competitors historically escaped detection by federal antitrust authorities in their incipiency because they fell below the reporting thresholds of the Premerger Notification Program. However, academic studies and agency investigations are now unearthing these transactions. Most salient is a recent complaint filed by the Federal Trade Commission challenging a series of acquisitions stretching back ten years.

In the wave of litigation that is likely to follow this “groundbreaking” …

Purpose-Driven Compliance, Veronica Root Martinez

Faculty Scholarship

Whether it is a small brokerage firm in Ann Arbor, Michigan, a private university in Cambridge, Massachusetts, or a multinational conglomerate head-quartered in New York City, organizations understand that they are required to fulfill a range of compliance obligations. Compliance programs today tend to have two important characteristics in common. First, the notion that perfect compliance is an impossible goal is a key component of the understandings and expectations of many firms’ compliance programs. Second, organizations have almost uniformly adopted compliance programs in areas where enforcement activity has been significant—like in the areas of antibribery and anticorruption, anti-money laundering, antitrust, …

The Oxymoron At The Heart Of Delaware's Making Elon Happy Legislation, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

Fearing that parties controlling corporations might incorporate elsewhere, Delaware has hurriedly enacted controversial legislation (SB-21) to reduce judicial scrutiny of dealings whereby such parties might further enrich themselves at the expense of public stockholders.

This article examines a basic problem with SB-21 that has been ignored in all the Sturm and Drang surrounding its enactment. Simply put, two key parts of the statute’s provisions addressing dealings by parties who control corporations are fundamentally at war with each other. These are the statute’s definition of controlling stockholder which focuses on the voting power to elect the directors and the statute’s provision …

Kedudukan Hukum Eks-Kreditor Pasca Debt To Equity Swap Yang Dihomologasi Dalam Pkpu Kedua Dan Kepailitan Debitor Akibat Pembatalan Perdamaian, Reza Rahmawati

Jurnal Hukum & Pembangunan

Debt to Equity Swap (DES) under a composition plan in Suspension of Debt Payment Obligations (PKPU) proceedings constitutes a restructuring mechanism that transforms the legal status of a Creditor into that of a shareholder upon homologation. Legal issues arise when The Debtor subsequently enters a Second PKPU due to newly incurred debts or is declared bankrupt following the annulment of the composition, while Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment does not expressly regulate the legal consequences of a DES under such circumstances. This normative legal research aims to analyze the legal standing and legal …

Corporate Childrearing, Katharine B. Silbaugh

Faculty Scholarship

With children influencing a trillion dollars in spending annually, corporations actively seek to shape children's identities in support of consumer culture and profit. Yet there are no scholarly treatments or theories of the legal relationship between children and corporations. Instead, scholars address individual industries such as food, social media, cosmetics, tobacco, or fashion, missing the structural role corporations play in children's identity formation. Family law evaluates child wellbeing interventions using a triangle to map the legal dynamics among child, parent, and state. This article adds corporations as fourth actors, reconceptualizing that triangle as a square. This square provides the first …

Corporate Law's Duty Of Data Loyalty, Andy Serwin, Neil Richards, Woodrow Hartzog, Ryan Durrie

Faculty Scholarship

Privacy law used to be a relatively tidy field, involving a few interesting but discrete topics like press disclosures of private facts, wiretapping, and the processing of personal data by internet companies. But as the digital revolution continues to disrupt area after area of human activity and software “is eating the world,” the core concerns of privacy law such as “when is it appropriate to process personal data?” have similarly entered field after field. Today, most fields of law, including discrimination law, antitrust, and international law, have found it necessary to reckon with the questions of informational harm and power …

Kedudukan Putusan Peradilan Etik Sebagai Keputusan Tata Usaha Negara: Studi Kasus Gugatan Hakim Konstitusi Anwar Usman, Satrio Febriyanto

Jurnal Hukum & Pembangunan

As an effort to concretize ethics, there is a process of formalizing ethics into a set of rules through a code of ethics. The code of ethics needs institutional enforcement instruments so that it can be effectively applied through ethical trials. Ethical courts, as institutions that adjudicate violations of the code of ethics, have the authority to issue decisions as a follow-up to cases of violations of the code of ethics that they handle. In carrying out its duties, ethical courts use ethical and moral analysis to assess the appropriateness of an action. This analytical approach differs from legal decisions …

Tinjauan Frasa “Setiap Orang” Dalam Pasal 3 Ayat (1) Peraturan Pemerintah Nomor 56 Tahun 2021 Tentang Pengelolaan Royalti Hak Cipta Lagu Dan/Atau Musik, Fajar Hidayansyah Ilham, Luna Dezeana Ticoalu

Jurnal Hukum & Pembangunan

Copyright is one form of legal protection for intellectual works, occupying an important position within the intellectual property law system. The Copyright Law explicitly grants exclusive rights to creators, encompassing both moral rights and economic rights. Economic rights, as stipulated in Article 9 paragraph (1), allow creators to obtain economic benefits from their works, ranging from publication, reproduction, distribution, performance, to communication to the public. This provision shows that creators hold a primary position as legal subjects entitled to protection, while also serving as central actors in the creative industry ecosystem. In practice, the mechanism for copyright protection requires implementing …

Dualisme Tujuan Pembebanan Uang Pengganti: Analisis Putusan Angelina Sondakh Di Berbagai Tingkat Peradilan, Valencia Puspa Novandra Ali, Tamsil .

Jurnal Hukum & Pembangunan

Studi ini meneliti perbedaan interpretasi dan penerapan hukuman tambahan berupa restitusi (uang pengganti) dalam kasus korupsi melalui analisis komparatif keputusan Angelina Sondakh di pengadilan tingkat pertama, pengadilan banding, pengadilan kasasi, dan pengadilan peninjauan yudisial. Muncul interpretasi ganda antara memandang restitusi sebagai kompensasi atas kerugian keuangan negara dan sebagai mekanisme untuk menyita keuntungan ilegal. Judex facti menolak penerapan restitusi dengan alasan bahwa tidak terjadi kerugian negara dalam kasus suap dan gratifikasi, sementara judex juris di tingkat kasasi menafsirkan restitusi sebagai instrumen pemulihan aset yang ditujukan untuk keuntungan yang diperoleh secara ilegal. Orientasi konseptual yang bertentangan ini menghasilkan perbedaan signifikan dalam penjatuhan …

The Boundaries Of Corporate Politicking, Ashlee A. Paxton-Turner

Law Faculty Publications

As corporations become red brands and blue brands (whether purposely or accidentally), they are participating in the American political landscape in ways distinct from lobbying and political spending. Specifically, corporations are increasingly making statements or launching ad campaigns that appear to support one side (or the other) of a political or social debate. This Article refers to that activity as “corporate politicking.” Unlike political spending or lobbying, corporate politicking lacks a legal definition and is far less regulated—whether internally or externally.

This Article’s central contribution is an administrable framework to demarcate corporate politicking from other corporate activities and decisions. It …