Business history and theory reflect a tension between public and private conceptions of the corporation. This tension and conceptual ambiguity lay close to the surface of The Modern Corporation and Private Property, in which Berle and Means portrayed the modern public corporation as straddling the public/private divide. It is also embodied in the famous Berle-Dodd debate, which provides the basis for contemporary clashes between “different visions of corporatism,” such as the conflict between shareholder primacy and stakeholder-centered versions of the corporation.
In my recent paper, “Corporations, Directors’ Duties and the Public/Private Divide,” I examine a number of … Read more
The global financial crisis highlighted the interconnectedness of international financial markets and the risk of contagion it posed. The crisis also emphasized the importance of supranational regulation and regulatory cooperation to help address and ameliorate that risk.
Yet, although capital flows are global, securities regulation is not. As a 2019 report by the International Organization of Securities Commissions (IOSCO) notes, the regulatory challenges, which were revealed so starkly during the global financial crisis, have by no means dissipated over the last decade. According to IOSCO, lack of international standards, or differences in the way jurisdictions implement such standards, can lead … Read more
My forthcoming article, “The Conundrum of Common Ownership,” examines the phenomenon of common ownership through a corporate governance lens. The common ownership debate has become one of the most contentious in corporate law. It is a by-product of major changes to capital-market ownership structure, which have triggered concerns about the rise of institutional investors, the growth of index investing, and the rapid concentration of ownership in major international financial markets.
Common ownership theory focuses on concerns about the incentives of large financial institutions holding widely diversified portfolios of shares in competing companies within a particular economic sector. A … Read more
The problems in global financial markets are often similar, even though the capital market structure across jurisdictions differs significantly. The beginning of the 21st century was marked by a spate of international corporate scandals, and the 2007-2009 global financial crisis reflected the global interconnectedness of contemporary international capital markets.
These corporate crises prompted major financial market reforms around the world. Discerning the causes of the crises was no easy feat, yet framing of the underlying problems was critical to the regulatory responses. In relation to the global financial crisis, for example, opinion continues to be divided across different jurisdictions … Read more
In a 2010 article in the Texas Law Review entitled “Embattled CEOs”, Professors Marcel Kahan and Ed Rock argued that, over the past decade or so, CEOs of US public companies have gradually been losing power to their boards and their shareholders. In their view, the days of the “imperial CEO” are now numbered. In early 2013, the growing tension they identified between CEO and board power was on display at two major corporations in different continents – J.P. Morgan Chase & Co in the United States and Rio Tinto in Australia.
At J.P. Morgan on January 15, 2013, Jamie … Read more
Not all jurisdictions around the world suffered the effects of the so-called “global” financial crisis equally. Even among common law countries, which are routinely bundled together in much academic literature, the impact of the crisis varied significantly from jurisdiction to jurisdiction.
The crisis proved dire for some common law countries, such as the United States and the United Kingdom. Others, however, including Australia and Canada, were considerably more fortunate. Although there were over fifty government-sponsored bank bailouts around the globe during the crisis, including in the United States and the United Kingdom, there were no such bailouts in either Australia … Read more