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Joan Heminway

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Professor Heminway brought nearly 15 years of corporate practice experience to the University of Tennessee College of Law when she joined the faculty in 2000. She practiced transactional business law (working in the areas of public offerings, private placements, mergers, acquisitions, dispositions, and restructurings) in the Boston office of Skadden, Arps, Slate, Meagher & Flom LLP from 1985 through 2000.

She has served as an expert witness and consultant on business entity and finance and federal and state securities law matters and is a frequent academic and continuing legal education presenter on business law issues. Professor Heminway also has represented pro bono clients on political asylum applications, landlord/tenant appeals, social security/disability cases, and not-for-profit incorporations and related business law issues. Read More

For those of you who have seen the classic film
The Wizard of Oz, you may remember the scene where Dorothy, the tin man, and the scarecrow made their way through the Spooky Forest chanting “lions and
tigers and bears, oh my.”  They feared what could come next on their
journey. Some in the business community have a similar fear of what could come
next with the rise of shareholder activism, increasing but unclear regulation,
and more demands from particular investors.

On October 16th,  I had the privilege of serving on a
panel with the corporate secretary of JP Morgan Chase, an executive of the
AFL-CIO, and the fund controller for Vanguard during an informational session on
corporate governance and proxy trends. The US Chamber of Commerce Center for
Capital Markets Competitiveness sponsored the event.

The
morning started with New Jersey Congressman Scott Garrett setting the tone for
the day by praising SEC Chair Mary Jo White for her recent statements promoting
agency independence and discretion, and decrying disclosure overload.  He expressed his opposition to what he
perceived to be a growing push to “hijack” the SEC disclosure regime to push “environmental and social causes that are immaterial to investors.”…

On October 16th, the US Chamber of Commerce’s
Center for Capital Markets Competitiveness will host a half-day event to
examine trends from the 2013 proxy season and look ahead to 2014.  The day
will start with a presentation from the Manhattan Institute about the 2013 season
and then I will be on a panel with Tony Horan, the Corporate Secretary of
JP Morgan Chase, Vineeta Anand from the Office of Investment of the AFL-CIO,
and Darla Stuckey of the Society of Corporate Secretaries and Governance
Professionals. Our panel will look  back at the 2013 proxy season and discuss hot
topics in corporate governance in general.  Later in the day, Harvey Pitt
and other panelists will talk about future trends and reform proposals, and
depending on the state of the government shutdown, we expect a
member of Congress to be the keynote speaker. The event will be webcast for
those who cannot make it to DC.  Click here
to register.

Dodd-Frank requires the SEC to issue rules barring national exchanges
from listing any company that has not implemented a clawback policy that does
not include recoupment of incentive-based compensation for current and former
executives for a three-year period.  Unlike the Sarbanes-Oxley clawback rule,  Dodd-Frank requires companies to recover compensation,
including options, based on materially inaccurate financial information,
regardless of misconduct or fault.

Although the SEC has not yet issued rules on this provision,
a number of companies have already disclosed their clawback policies, likely
because proxy advisory firms Glass Lewis and Institutional Shareholder Services
have taken clawback policies into consideration when making Say on Pay voting
recommendations. Equilar has reviewed the proxy statements for Fortune 100
companies filed in calendar year 2013 for compensation events for fiscal year
2012. The organization released a report
summarizing its findings, which are instructive. 

Of the 94 publicly-traded companies analyzed by Equilar, 89.4%
publicly disclosed their policies; 71.8% included provisions that contained
both financial restatement and ethical misconduct triggers; 29.1% included
non-compete violations as triggers and 27.2% had other forms of triggers.  68% of the policies applied to key executives
and employees including named executive officers, while only 14.6% applied to
all employees. 7.8%…

Too bad I
didn’t have this information from today’s
Wall Street Journal to add to my arsenal of reasons of why I think the Dodd-Frank conflict minerals
SEC disclosure is a well-intentioned but bad law to address rape, forced labor,
plundering of villages, murder, and exploitation of children in the Democratic
Republic of Congo. I won’t reiterate the reasons I outlined in my two-part blog
post a couple of weeks ago.  According
to press reports, while acknowledging her responsibility to uphold the law, SEC Chair Mary Jo White mirrored some of the arguments about
discretion that business groups and our amicus brief raised on appeal to the DC
Circuit, and further explained, “seeking
to improve safety in mines for workers or to end horrible human rights
atrocities in the Democratic Republic of the Congo are compelling objectives,
which, as a citizen, I wholeheartedly share … [b]ut, as the Chair of the SEC, I
must question, as a policy matter, using the federal securities laws and the
SEC’s powers of mandatory disclosure to accomplish these goals.”  I couldn’t agree more. While I have no problems with appropriate and relevant disclosure, corporate responsibility, and due diligence related to human rights, Congress should…

Professor Haskell Murray is presenting on
Delaware’s new Public Benefit Corporation Act on October 5th at the
Southeastern Law Scholars Conference.  Delaware is the 19th state to
pass such legislation and given the influence that the state has on others in the area of
corporate law, it may prompt the many states that are considering it to pass their
own pending legislation.  Many question
the need for benefit corporations in general given the constituency statutes that are already in
place in many states and the debate about the shareholder wealth maximization norm. Others worry about unintended consequences (see
here for example).  

Haskell has
probably written more extensively on these entities than almost anyone else (see here).
Although his latest article is not yet on SSRN, the abstract is below.  I look forward to reading his article and to
seeing how many Delaware corporations jump on the benefit corporation
bandwagon.

“Systems should exist to serve
society.  Right now our capitalist system is not serving society; it’s
serving shareholders.  And we can’t run around expecting different
outcomes until we change the rules of the game.”   -Jay Coen Gilbert
(Co-founder, B-Lab)

“Delaware, the leading incorporation state…

I have spent the
past two days at West Virginia University attending a conference entitled “Business
and Human Rights: Moving Forward and Looking Back.” This was not a bunch of academic
do-gooders fantasizing about imposing new corporate social responsibilities on
multinationals. The conference was supported by the UN Working Group on
Business and Human Rights, and attendees and speakers included the State
Department (which has a dedicated office for business and human rights), the Department
of Labor, nongovernmental organizations, economists, ethicists, academics,
members of the extractive industry (defined as oil, gas and mining),
representatives from small and medium sized enterprises (“SMEs”), Proctor and
Gamble, and Monsanto.

Professor Jena
Martin organized the conference after the UN Working Group visited West
Virginia earlier this year to learn more about SMEs and human rights issues.
She invited participants to help determine how to ground the 2011
UN Guiding Principles on Business and Human Rights into business practices
and move away from theory to the operational level. The nonbinding Guiding
Principles outline the state duty to protect human rights, the corporate duty
to respect human rights, and both the state and corporations’ duty to provide
judicial and non-judicial remedies to aggrieved parties.  Transnational corporations…

I first became interested in the Dodd-Frank conflict
minerals law after leaving my former employer, which managed other companies’
supply chains, and while serving as a founding board member of Footprints
Foundation, a nonprofit that works with rape survivors, midwives and hospitals
in the Democratic Republic of Congo (“DRC”) (see here). During a fact-finding
mission for the foundation to the DRC in late 2011, I observed the law through two
lenses– both as a compliance officer who used to conduct audits around the
world, and as a board member trying to determine whether this law would really
help stem the unconscionable violence which I witnessed first-hand when I saw
five massacred civilians lying on the road on my way to visit a mine.  (Note, my blog posts reflects my views only
and should neither be attributed to Footprints nor my former employer).  My 2011 trip and subsequent research convinced
me that the conflict minerals law could have unintended consequences that Congress had not
sufficiently thought through, and that the SEC, in writing the rules, had not
adequately addressed. For an article that describes the mining in the DRC today and some of the compliance successes and challenges see here. …

Apple
hasn’t released pre-order numbers yet for its highly anticipated iPhone 5s and
5c, but if media reports and my own call to the Apple Store are any indication,
throngs of consumers will be lining up tomorrow to get the latest product.  It’s very likely that most of the customers
have no idea of the highly successful campaign against Apple and other
electronics manufacturers that led in part to Dodd-Frank §1502, the conflict
minerals provision which is now up on appeal to the DC Circuit. Incorporated
into Dodd-Frank only days before its passage, it aims to focus investor and
consumer attention to potential corporate complicity in human rights abuses in
the Democratic Republic of the Congo (“DRC”), a country where the United
Nations recently deployed drones against rebel groups and where over five
million have died due to civil wars, malnutrition, disease and poverty in recent years. Eighty
thousand people were displaced from their villages due to fighting between rebels and the army in
just the last month according to a report out today from the UN. A UN
representative once called the country was once called the “rape capital of the
world.”

The
law affects an estimated 6,000 companies–almost…

I (Josh Fershee) will follow up with a post of some (I hope) substance
shortly, but I thought I’d take a moment to briefly re-introduce myself.   When I last wrote for BLPB, I was teaching
at the University of North Dakota School of Law. Last fall, we made the move to
West Virginia University College of Law. 
(I say “we” because my wife (Kendra Huard Fershee) not only moved with me, but because she is
also on the law faculty.)   I joined WVU as part of a university-wide
energy-law expansion and work with the Center for Energy and Sustainable
Development.

I teach business law courses and energy law courses, with
most of my research relating somehow to energy business and regulation.  I teach Business Organizations, Energy Law
Survey, Energy Business: Law & Strategy, and Energy Law and Practice.  I plan to add a Hydraulic Fracturing
Seminar, too, in the near future. 

Of perhaps some interest to our readers, I have taught my Energy Business: Law & Strategy course once, and I plan to do so again in the
spring.  I think it is a unique class,
especially in the law school environment, with its focus on how law comes to be and how businesses are strategic in their use of law and regulation.  (Note: I am of the mind that this reality is important to understand whether you want to work for businesses and employ such strategies or if you want to work to limit businesses in the ability to do so.)  I have the students work in groups, and they draft a written final
project, which they also present to the class. 

Below the jump, I provide the books, course description, goals, and
assessment items for the course. I welcome any comments or suggestions for additional teaching
materials or concepts. 

The Atlanta Falcons lost to the New Orleans Saints in overtime in Sunday.  The Falcons failed in a fourth-down attempt in their own territory, leading to a lot of second guessing on the NFL post-game shows. Here’s the breakdown from Slate & Deadspin‘s NFL roundtable:

So arbitrary formulas aren’t always the thing. But pure probabilities? Everyone’s an expert today, thanks to the Falcons’ decision to go for it in overtime on fourth and inches from their own 29-yard line. They were stuffed by the Saints, who slotted home a gimme field goal for a big division win. Here is a comprehensive list of every reason why Mike Smith’s decision is being criticized: because it didn’t happen to work.

. . . . A fourth-and-a-yard succeeds 74 percent of the time, and Michael Turner was not a yard away. . . . .

Brian Burke at Advanced NFL Stats has picked the perfect day to unveil the Fourthdownulator, a handy little application that allows you to plug in the situation and decide whether going for it makes statistical sense. Before running the fourth-down play, the Falcons’ win probability stood at 47 percent (it would’ve

…