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Articles 211 - 240 of 257

Full-Text Articles in Law and Philosophy

Institutional Investors, Corporate Governance, And Firm Value, K.J. Martijn Cremers, Simone M. Sepe Feb 2018

Institutional Investors, Corporate Governance, And Firm Value, K.J. Martijn Cremers, Simone M. Sepe

Seattle University Law Review

In the corporate governance debate, the short-term versus longterm contention has grown into perhaps today’s most controversial topic. In this debate, descriptions of institutional investors tend to present a dichotomic nature. These investors are alternatively portrayed as homogenously short-termist or as consistent “forces for good,” focused on targeting underperforming companies. This Article moves beyond this dichotomy. It shows empirically that aggregate institutional investor behavior presents nuances that depend on a variety of factors, including individual firm characteristics, institutional ownership levels, and institutional propensity toward activism.


Flash Traders (Milliseconds) To Indexed Institutions (Centuries): The Challenges Of An Agency Theory Approach To Governance In The Era Of Diverse Investor Time Horizons, Harold Weston, Conrad Ciccotello Feb 2018

Flash Traders (Milliseconds) To Indexed Institutions (Centuries): The Challenges Of An Agency Theory Approach To Governance In The Era Of Diverse Investor Time Horizons, Harold Weston, Conrad Ciccotello

Seattle University Law Review

One aspect of the problem in trying to align a corporate investment horizon (the time period for return on investment) to that of its shareholders is the enormous range of investor time horizons, which can range from milliseconds to centuries. A second aspect of the problem is whether ownership of shares equates to ownership of the corporation. A third aspect of the problem is that, despite the theories and advocacy of shareholders being owners, based on the agency model of corporate finance first developed in the 1970s, the theory is contrary to corporate law. These three aspects will be developed …


Good Activist/Bad Activist: The Rise Of International Stewardship Codes, Jennifer G. Hill Feb 2018

Good Activist/Bad Activist: The Rise Of International Stewardship Codes, Jennifer G. Hill

Seattle University Law Review

Shareholder participation in corporate governance and investor activism are topics du jour in the United States and around the world. In the early part of the 20th century, Professors Berle and Means considered that shareholder participation was impossible in the transformed commercial world that they described in The Modern Corporation and Private Property. This was a world characterized by dispersed and vulnerable shareholders, in which owners do not manage, and managers do not own, the corporation. In such an environment, the goal of corporate law became one of protecting shareholder interests rather than providing shareholders with participation rights. The structure …


Wrong-Termism, Right-Termism, And The Liability Structure Of Investor Time Horizons, Andrew Verstein Feb 2018

Wrong-Termism, Right-Termism, And The Liability Structure Of Investor Time Horizons, Andrew Verstein

Seattle University Law Review

Do investor time horizons lead to inefficient business conduct in the real economy? An extensive finance literature analyzes whether particular practices (e.g., high frequency trading and stock buybacks) lead firms to operate with inefficiently myopic investment horizons, and an extensive legal literature considers the appropriateness of policy interventions. This Article joins those debates by charting the space of possibilities: what might be the causes of problematic time horizons? What solutions are available? One implication of this analysis is that there may be unexplored market-based solutions located on the liability side of investors’ balance sheets. This Article also argues that we …


Laudato Si’: Engaging Islamic Tradition And Implications For Legal Thought, Russell Powell Oct 2017

Laudato Si’: Engaging Islamic Tradition And Implications For Legal Thought, Russell Powell

Seattle University Law Review

This Essay considers the 2015 papal encyclical Laudato si’s engagement with Islamic religious and legal traditions in order to identify shared ethical and jurisprudential commitments and their broader implications for law. By 2025, Muslims will constitute 30% of the population of the world, while Catholics will likely be between 15% and 20%. The history of interreligious conflict is long and enduring. In many cases, legal structures related to security and immigration have exacerbated these tensions, prompting uncertainty and instability.5 Laudato si’ is a strategic document, intended to address climate change, increasing economic inequity, and interreligious conflict by opening a space …


Where Morality And The Law Coincide: How Legal Obligations Of Bystanders May Be Informed By The Social Teachings Of Pope Francis, Amelia J. Uelmen Oct 2017

Where Morality And The Law Coincide: How Legal Obligations Of Bystanders May Be Informed By The Social Teachings Of Pope Francis, Amelia J. Uelmen

Seattle University Law Review

Since the beginning of his pontificate, Pope Francis has offered to the world powerful signs of how we should aspire to treat each other as human beings, as brothers and sisters in the one human family. He has communicated his message and his teachings in myriad ways: through symbolic gestures; his presence and words at gatherings in our world’s most troubled places; brief messages, homilies and meditations; and official documents that continue the application of the principles of Catholic social teaching to contemporary social questions. What might these prophetic signs and statements mean for the dialogue between Catholic social thought …


A Cosmopolitan Church Confronts Right-Wing Populism, Vincent Rougeau Oct 2017

A Cosmopolitan Church Confronts Right-Wing Populism, Vincent Rougeau

Seattle University Law Review

Are all human beings of equal moral worth? If so, does this proposition generate moral obligations to others that transcend national and cultural boundaries? Cosmopolitans would answer yes to each of these questions, as would Pope Francis and Catholic Social Teaching (CST). Given our interconnected economic system, a global perspective on justice is not only pragmatic but also morally essential. In recent years, however, what had been an emerging consensus centered on a cosmopolitan view of the reciprocal responsibilities of nations has been stifled by a rising tide of nationalism and right-wing populism. As a right-wing populist leader of a …


Social Justice And The American Law School Today: Since We Are Made For Love, Michael Kaufman Oct 2017

Social Justice And The American Law School Today: Since We Are Made For Love, Michael Kaufman

Seattle University Law Review

This Article is intended to facilitate that new dialogue by finding a series of profound provocations in the Pope’s teachings. First, the Pope provokes us to consider whether our existing education and economic systems are based on an incomplete understanding of human nature.5 The first section contends that the understanding that human beings are by nature competitive and consumptive wealth maximizers is not only contrary to the Pope’s teachings but also contrary to the latest research in the fields of neuroscience, neuro-psychology, cognitive psychology, educational psychology, economics, and behavioral economics. Second, the Pope provokes us to consider whether our existing …


A Critique Of Pope Francis’S Laudato Si’, Nicholas Capaldi Oct 2017

A Critique Of Pope Francis’S Laudato Si’, Nicholas Capaldi

Seattle University Law Review

This is a critique of Pope Francis’s encyclical Laudato si’. The author summarizes and examines Pope Francis’s description of the problem, analysis of the roots of the problem, and proposed solution of the problem within the context of the Roman Catholic tradition. The author concludes that the encyclical abandons rigorous argument, as it lists complaints without offering substantive alternatives.


Mercy Versus Fear, Or Where The Law On Migration Stands, Gilbert Paul Carrasco, Iryna Zaverukha Oct 2017

Mercy Versus Fear, Or Where The Law On Migration Stands, Gilbert Paul Carrasco, Iryna Zaverukha

Seattle University Law Review

The theme of this Article contrasts the perspective of Papa Francisco on the subject of migration, juxtaposing his blueprint of mercy as the point of departure, with the oppositional resistance, which is based on various dimensions of fear. This perspective will be contextualized within the framework of both American immigration law and within the parameters of international human rights and transnational migration. Part I of this Article will consider the paradigm of mercy and fear in light of the various provisions of federal American immigration law in their historical context. It will recount many of the restrictive and nativist episodes …


The Teachings Of Pope Francis Symposium: Toward A Common Good For Our Common Home, Steven W. Bender Oct 2017

The Teachings Of Pope Francis Symposium: Toward A Common Good For Our Common Home, Steven W. Bender

Seattle University Law Review

Prompted by the teachings of Pope Francis conveyed through such writings as the Evangelii gaudium and Laudato si’, the symposium—titled The Teachings of Pope Francis: Towards a Vision of Social Justice and Sustainable Capitalism?—brought an impressive and diverse array of interdisciplinary scholars to Seattle University School of Law in February 2017. Speakers included economists, law professors, and theologians with a wide array of expertise on daunting policy issues facing the Global South and North. Fittingly, a Jesuit law school with a diverse faculty hosted the symposium centering, critiquing, and expanding the teachings of the first Jesuit Pope. Many of our …


Social Justice And Capitalism: An Assessment Of The Teachings Of Pope Francis From A Law And Macroeconomics Perspective, Steven A. Ramirez Oct 2017

Social Justice And Capitalism: An Assessment Of The Teachings Of Pope Francis From A Law And Macroeconomics Perspective, Steven A. Ramirez

Seattle University Law Review

The first part of this Article will synthesize the key teachings of Pope Francis from his most important statements on economic structures and social justice and situate these teachings within contemporary economic realities and traditional social justice teachings. Part II of this Article will demonstrate that the Pope’s teachings on social justice fundamentally reflect the best learning from economists on how to sustain economic growth. Part III of this Article will show that nations that undertake policies to pursue the fundamental tenets of the Pope’s teachings (such as minimizing childhood poverty) also perform the best in achieving high human development …


On The Existential Function Of The Social And The Limits Of Rationalist Accounts Of Human Behavior, Doug Mcadam Mar 2016

On The Existential Function Of The Social And The Limits Of Rationalist Accounts Of Human Behavior, Doug Mcadam

Seattle University Law Review

Rational choice theory has achieved widespread influence in a number of social science disciplines, most notably economics and political science. Given its prominent position within economics, it is not surprising that rational choice theory (and other rationalist perspectives) dominates theory and research on the corporation and decision-making by corporate actors. By contrast, however, the theory has failed to gain more than a toehold in sociology. Indeed, most sociologists are downright hostile to rational choice theory. When pressed to explain why, those in the discipline are very likely to complain that the perspective is “asociological”; that the theory posits an atomized …


Benefit Corporations And Strategic Action Fields Or (The Existential Failing Of Delaware), Brett Mcdonnell Mar 2016

Benefit Corporations And Strategic Action Fields Or (The Existential Failing Of Delaware), Brett Mcdonnell

Seattle University Law Review

This Article analyzes the creation and growth of benefit corporations from the perspective of strategic action field theory in an attempt to shed some light upon both the subject and the methodology. It considers how the new legal field of benefit corporations responded to weaknesses in the existing fields of business and nonprofit corporations. Where major field participants such as directors, officers, employees, shareholders, or donors wish to pursue both financial and public-spirited goals that sometimes conflict without subordinating either type of goal to the other, both profit and nonprofit corporations may be unsatisfactory. Benefit corporations attempt not only to …


Corporations In The Flow Of Culture, Greg Urban Mar 2016

Corporations In The Flow Of Culture, Greg Urban

Seattle University Law Review

As an anthropologist, coming out of three decades of research among indigenous Brazilian populations, I naturally saw modern for-profit business corporations as tribes—the collective bearers of adaptive cultural know-how. They appeared to me to be the entities housing the culture needed to produce commodities, to trade commodities on the open market, or both. I was also, of course, aware of the legal concept of the corporation as fictive person capable of owning property and having standing in court cases, which I thought of as akin to the anthropological corporation insofar as both recognized the group as social actor. However, it …


Culture In Corporate Law Or: A Black Corporation, A Christian Corporation, And A Māori Corporation Walk Into A Bar . . ., Gwendolyn Gordon Mar 2016

Culture In Corporate Law Or: A Black Corporation, A Christian Corporation, And A Māori Corporation Walk Into A Bar . . ., Gwendolyn Gordon

Seattle University Law Review

Recent Supreme Court cases have entrenched a new image of corporate civic identity, assigning to the corporate person rights and abilities based upon the cultural characteristics, social ties, civic commitments, and internal lives of the human beings involved in it. This vision of the corporation is exemplified in recent cases implicating a corporate right to engage in political speech (Citizens United v. Federal Election Commission) and a right of corporations to be free of government interference regarding religious convictions (Burwell v. Hobby Lobby Stores, Inc.). Although much is being written about the soundness of the results in these cases and …


The English East India Company And The Modern Corporation: Legacies, Lessons, And Limitations, Philip J. Stern Mar 2016

The English East India Company And The Modern Corporation: Legacies, Lessons, And Limitations, Philip J. Stern

Seattle University Law Review

The English East India Company was first chartered in 1600, endured until the late nineteenth century, and, in a clever act of corporate resurrection, has even recently returned as a global, upmarket retail outlet selling fine foods and commemorative coins. It has also endured in the popular imagination and culture, churning out heroes and villains alike in film, television, and video games. The script writer for a forthcoming BBC miniseries, in which the East India Company stars as the prime antagonist, even noted recently that the Company was like “the CIA, the NSA, and the biggest, baddest multinational corporation on …


Remarks: The Declining Role Of Outside Counsel In Enhancing Ethical Conduct By Corporations, Jed S. Rakoff Mar 2016

Remarks: The Declining Role Of Outside Counsel In Enhancing Ethical Conduct By Corporations, Jed S. Rakoff

Seattle University Law Review

Judge Rakoff’s remarks from the seventh annual Berle Symposium, held May 26–27, 2015 at Seattle University School of Law.


The Rhetoric Of Negative Externalities, Claire A. Hill Mar 2016

The Rhetoric Of Negative Externalities, Claire A. Hill

Seattle University Law Review

Negative externalities are costs imposed on third parties. The paradigmatic example is pollution. A firm manufactures a product that generates toxic waste, and dumps the waste; society pays for the associated cost, including, for instance, the community’s health problems caused by the waste. Profit is supposed to measure the firm’s revenues in excess of the associated costs; because this cost is not included, the firm’s profits are higher than they should be, and there is more pollution than there should be. What is privately optimal diverges from what is socially optimal. The concept of negative externalities is intuitively appealing. It …


Law And The Theory Of Fields, Frank Partnoy Mar 2016

Law And The Theory Of Fields, Frank Partnoy

Seattle University Law Review

The distinction between “material” and “existential” plays a prominent role in A Theory of Fields, and it played a prominent role in discussions at the Berle VII Symposium. In general, the authors advocated the importance of the ongoing use of social skills and the collaborative efforts to seek meaning, particularly in ways beyond the merely “material.” However, the extent to which rules might matter in these efforts was less clear. Overall, Fligstein and McAdam seek to use the concept of a strategic action field to develop a theory of social change and stability. Yet social change and stability are inextricably …


Notes On The Difficulty Of Studying The Corporation, Marina Welker Mar 2016

Notes On The Difficulty Of Studying The Corporation, Marina Welker

Seattle University Law Review

In the award-winning documentary The Corporation, public intellectuals and activists characterize corporations as “externalizing machines,” “doom machines,” “persons with no moral conscience,” and “monsters trying to devour as much profit as possible at anyone’s expense.” In other footage, people on the street personify corporations: “General Electric: a kind old man with lots of stories;” “Nike: young, energetic;” “Microsoft: aggressive;” “McDonald’s: young, outgoing, enthusiastic;” “Monsanto: immaculately dressed;” “Disney: goofy;” “The Body Shop: deceptive.” The documentary, like screenwriter and legal scholar Joel Bakan’s book The Corporation: The Pathological Pursuit of Profit and Power, imparts dissonant messages about corporations. On the one hand, …


The Theory Of Fields And Its Application To Corporate Governance, Neil Fligstein Mar 2016

The Theory Of Fields And Its Application To Corporate Governance, Neil Fligstein

Seattle University Law Review

My goal here is twofold. First, I want to introduce the theory of strategic action fields to the law audience. The main idea in field theory in sociology is that most social action occurs in social arenas where actors know one another and take one another into account in their action. Scholars use the field construct to make sense of how and why social orders emerge, reproduce, and transform. Underlying this formulation is the idea that a field is an ongoing game where actors have to understand what others are doing in order to frame their actions. Second, I want …


Agency Theory As Prophecy: How Boards, Analysts, And Fund Managers Perform Their Roles, Jiwook Jung, Frank Dobbin Mar 2016

Agency Theory As Prophecy: How Boards, Analysts, And Fund Managers Perform Their Roles, Jiwook Jung, Frank Dobbin

Seattle University Law Review

In 1976, Michael Jensen and William Meckling published a paper reintroducing agency theory that explained how the modern corporation is structured to serve dispersed shareholders. They purported to describe the world as it exists but, in fact, they described a utopia, and their piece was read as a blueprint for that utopia. We take a page from the sociology of knowledge to argue that, in the modern world, economic theories function as prescriptions for behavior as much as they function as descriptions. Economists and management theorists often act as prophets rather than scientists, describing the world not as it is, …


Balance And Team Production, Kelli A. Alces Jan 2015

Balance And Team Production, Kelli A. Alces

Seattle University Law Review

For decades, those holding the shareholder primacy view that the purpose of a corporation is to earn a profit for its shareholders have been debating with those who believe that corporations exist to serve broader societal interests. Adolph Berle and Merrick Dodd began the conversation over eighty years ago, and it continues today, with voices at various places along a spectrum of possible corporate purposes participating. Unfortunately, over time, the various sides of the debate have begun to talk past each other rather than engage with each other and have lost sight of whatever common ground they may be able …


The Boundaries Of "Team" Production Of Corporate Governance, Anthony J. Casey, M. Todd Henderson Jan 2015

The Boundaries Of "Team" Production Of Corporate Governance, Anthony J. Casey, M. Todd Henderson

Seattle University Law Review

We examine the cooperative production of corporate governance. We explain that this production does not occur exclusively within a “team” or “firm.” Rather, several aspects of corporate governance are quintessentially market products. Like Blair and Stout, we view the shareholder as but one of many stakeholders in a corporation. Where we depart from their analysis is in our view of the boundaries of a firm. We suggest that they overweight the intrafirm production of control. Focusing on the primacy of a board of directors, Blair and Stout posit a hierarchical team that governs the economic enterprise. We observe, however, that …


The Team Production Model As A Paradigm, Brian R. Cheffins Jan 2015

The Team Production Model As A Paradigm, Brian R. Cheffins

Seattle University Law Review

Margaret Blair and Lynn Stout suggested a few years after the publication of their 1999 Virginia Law Review article, A Team Production Theory of Corporate Law, that their team production model was poised to emerge as part of a new corporate law “paradigm.” In so doing, they specifically invoked Thomas Kuhn’s well-known analysis of scientific revolutions. This Article revisits Blair and Stout’s team production theory by offering a critique of their claim that their model is destined to become a new corporate law paradigm in the Kuhnian sense. In so doing the Article draws upon key corporate law theories and …


Testing The Normative Desirability Of The Mediating Hierarch, Zachary J. Gubler Jan 2015

Testing The Normative Desirability Of The Mediating Hierarch, Zachary J. Gubler

Seattle University Law Review

In their influential article, A Team Production Theory of Corporate Law, Professors Margaret Blair and Lynn Stout explained how corporate law might be viewed as an attempt at solving what is known as the team production problem. At its core, this problem has to do with the opportunistic behavior that arises when multiple economic actors make investments—whether of labor, capital, or otherwise—in a business venture where these investments are said to be “firm specific” because they cannot be easily withdrawn and redeployed in other projects. The problem is how to construct a governance regime that will create incentives for the …


Team Production & The Multinational Enterprise, Virginia Harper Ho Jan 2015

Team Production & The Multinational Enterprise, Virginia Harper Ho

Seattle University Law Review

Margaret Blair and Lynn Stout’s path-breaking article, A Team Production Theory of Corporate Law, advances a dual thesis: first, that team production theory does a better job than its competitors (in particular, principal–agent theory) of explaining the advantages of the public corporation and key features of corporate law; and second, that, as a matter of corporate law, corporate boards are charged with advancing the collective interest of all the contributors to the corporate enterprise rather than the shareholders’ interests alone. Its central insight is that the role of the independent, or insulated, corporate board is to serve as a “mediating …


Hostile Takeovers And Overreliance, Anthony Niblett Jan 2015

Hostile Takeovers And Overreliance, Anthony Niblett

Seattle University Law Review

Commentators have argued that employees should be compensated in the event of a hostile takeover; otherwise, the threat of such a takeover will fail to incentivize firm-specific investments by employees. Such deferred compensation is analogous to the payment of damages following a breach of contract. The analogous breach, here, is the breach of an implicit contract between management and employees. Employees trusted management to compensate them for firm-specific investments not explicitly contracted for. This Article uses a familiar result from the contract law literature: There is no measure of damages for breach of contract that can generate both efficient breach …


Buying Teams, Andres Sawicki Jan 2015

Buying Teams, Andres Sawicki

Seattle University Law Review

The Sixth Annual Berle Symposium reflects on Margaret Blair and Lynn Stout’s classic article: A Team Production Theory of Corporate Law. Blair and Stout recast the modern law of public corporations through the lens of the team production theory of the firm. Here, I apply Blair and Stout’s insights—emphasizing the value of team production, independent monitors, and intellectual property rights—to a novel corporate transaction structure: the acqui-hire. In an acqui-hire, a publicly owned technology firm wants to add a start-up’s engineers. Instead of simply hiring them, though, it buys the start-up, discards most of its assets, and retains the start-up’s …