The following post comes to us from Charles K. Whitehead, Professor of Law at Cornell Law School, and is based on his recent paper, “Paying for Risk: Bankers, Compensation, and Competition,” which is co-authored by Simone M. Sepe, Associate Professor of Law and Finance, University of Arizona James E. Rogers College of Law. The full paper is available here.
The financial markets have transformed in the last four decades. Greater competition among banks and non-banks across traditional business lines has benefited consumers. But at what expense?
In Paying for Risk: Bankers, Compensation, and Competition, my co-author, Simone Sepe, … Read more
The accepted wisdom is that a lawyer who represents herself—by acting as both a lawyer and a director—has a fool for a client. In our working paper, Lawyers and Fools: Lawyer-Directors in Public Corporations, my co-authors, Lubomir Litov and Simone Sepe, and I explain why the accepted wisdom is outdated. The benefits of lawyer-directors in today’s world significantly outweigh the costs. Beyond monitoring, they help manage litigation and regulation, as well as structure compensation to align CEO and shareholder interests. On average, a lawyer-director increases firm value by 9.5 percent, and when the lawyer is also a company executive, … Read more