In recent years, interest in alternatives to shareholder-centric corporate governance has increased significantly. It has been 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 options for reform, however, because prevailing theories of corporate governance limit the debate in ways that obscure many of the most consequential possibilities.
According to those views, our options amount to board versus shareholder power, and shareholder versus stakeholder purpose. … Read more
Delaware is widely known for providing the U.S. corporate law that governs most large, publicly traded companies. However, the economic imperatives prompting this have also led Delaware to explore opportunities in related though distinct fields, effectively leveraging its corporate law advantage to expand and diversify the state’s revenue streams. In a recent paper, I assess Delaware’s competitive position amidst this broader landscape.
The policy merits of the competition among states to incorporate companies remain contested. Some see a deregulatory race to the bottom where others see an efficient race to the top. U.S. charter competition in the late 19… Read more
Judges, legislators, corporate practitioners, and scholars of business law all conduct their work, within their respective professional spheres, based on some working conception of what “corporate law” is. Strangely, however, the question of what this conceptual vessel actually contains is seldom asked, let alone answered with any specificity. In a recent paper, I investigate the domain of corporate law – that is, the scope, content, and boundaries of the field. In so doing, I aim to illuminate why it is that defining the field with any precision has been so difficult, and what such insights have to tell us … Read more
The manner in which financial firms are governed directly affects the stability and sustainability of both the financial sector and the “real” economy, as the financial crisis and associated regulatory reform efforts have tragically demonstrated. However, two fundamental tensions continue to complicate efforts to reform corporate governance in post-crisis financial firms.
The first relates to reliance on increased equity capital as a buffer against shocks and a means of limiting leverage. The tension here arises from the fact that no corporate constituency desires risk more than equity does—and that risk preference only tends to be stronger in banks, and at … Read more
The degree to which business participants ought to be free to limit or eliminate fiduciary duties and associated liabilities remains a hotly contested matter in many jurisdictions. In a new chapter forthcoming in Edward Elgar’s Research Handbook on Fiduciary Law, I explore the extent of contractual freedom to opt out of the fiduciary governance paradigm in U.S. and U.K. business entities, including the U.S. corporation, general partnership, limited partnership, limited liability partnership, and limited liability company, and the U.K. limited company, general partnership, limited partnership, and limited liability partnership. I then consider potential explanations for observed divergences between two … Read more
Although U.S. corporate law has traditionally been left to the states, it is widely understood that a host of federal actors can and do affect the broader rules of corporate governance in fundamental ways. How might the corporate governance landscape change, then, in response to the tectonic shifts recently experienced in American politics – forces reflected most dramatically in the November 2016 election? Discerning how such dynamics might affect corporate governance moving forward naturally requires a thorough reckoning of how state and federal political forces have affected the field’s development to date. In a recent paper, I provide such … Read more