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John P. Anderson

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Dean Anderson's scholarship focuses on securities enforcement, white-collar crime, and intersections of law and philosophy (e.g., business ethics, constitutionalism, problems of pluralism, and human rights).

His recent articles address the law and ethics of insider trading, the problem of how to build a just and enduring constitutional order in the face of increasing religious and cultural pluralism, and the theoretical underpinnings of our international human rights regime. Read More

The BLPB editors have been nice enough to let me pen a quick post concerning an idea I floated way back in May. In my role as that month’s guest blogger, I offered my thoughts on how rationalizing—that very powerful, and very human, psychological process that allows us to view ourselves positively (say, as an upstanding citizen, family man, etc.), while taking actions inconsistent with that view according to society’s standards (say, by passing a stock tip to a friend, misrepresenting a company’s financials, etc.)—helps explain corporate wrongdoing. I also offered a thesis for how overcriminalization, particularly in the white collar area, might be fostering rationalizations, and thus undermining crime control efforts. In a bit of a cliffhanger (not quite Game of Thrones quality, but a cliffhanger nonetheless), I promised a final post discussing how these ideas impact corporate compliance. Well, almost a year later, I’ve finally finished an article on the topic. Let me know what you think (and also if John Snow is really dead.)

Todd Haugh, The Criminalization of Compliance, 92 Notre Dame L. Rev. (forthcoming 2016).

Corporate compliance is becoming increasingly “criminalized.” What began as a means of industry self-regulation has morphed into a multi-billion dollar effort …

I would like to thank the Business Law Professor Blog for this very important symposium. My brief thoughts are filling in for Marcia Narine. I became well acquainted with LLCs when I practiced in the alternative entities group of a Delaware law firm. What most stood out during my time there was the freedom enjoyed by LLCs and LPs to abridge fiduciary duties and deviate from other corporate orthodoxies. I constantly thought about whether this freedom of contract was a good thing; after all, case law tells only the tragic stories.

As mentioned in other posts, contractual freedom is ideal when sophisticated parties of comparable strengths are allowed to define their relationships. And generally, few problems arise from the LLC form. Law firms typically provide those seeking to form an LLC one of their standard, boilerplate operating agreements, which includes fiduciary duties. In turn, business owners are able to enjoy limited liability while avoiding many of the formalities, transactions costs, and tax burdens associated with traditional corporations. However, there seems to be an increasing number of cases where operating agreements resemble adhesion contracts, creating opportunities for abuse. Is it wise that unsophisticated are more at risk for contractual related harms so…

Just a few days ago, San Franciscans voted against Proposition F, a referendum that would have placed restrictions on AirBnBs and other short-term housing rentals. This type of legislation is far from unique. Fueled by arguably the United States’ most prominent housing crisis, San Francisco has enacted layers of housing laws intended to protect tenants from skyrocketing rents, arbitrary evictions, and diminished rental supplies. Notable examples include laws governing rent controls (landlords have little ability to raise rents), market exoduses (the Ellis Act often incentives landlords to withdraw from the San Francisco rental market for five years), and buyout restrictions (landlords face numerous obstacles in buying out a tenant’s lease). Although the motives behind these statutes is admirable—considering affordable housing’s position as a social justice issue—many housing laws intended to benefit tenants are misguided, harming both tenants and landlords.

The folly of housing laws is neatly described by an economics term known as the “cobra effect,” which refers to solutions that exacerbate an original problem. The term was coined after cobras overran Delhi, prompting city officials to issue bounties for each killed cobra. Upon learning that local residents had begun farming cobras to generate additional bounties, city…

I would like to build off of Marcia Narine’s post about binding arbitration clauses. In her post, she discusses two related subjects. The first concerns the importance of civil procedure, noting that jurisdictional problems prevented the human rights victims in Kiobel from finding justice. The second addressed the grim picture painted by the New York Times about how companies use arbitration clauses to undermine meritorious legal claims. I mention this because there seems to be a radical development brewing about how arbitration clauses might actually help human rights victims.

The problem with adjudicating human rights claims is that few courts have been able, or willing, to remedy violations. Most abuses occur in countries where legal systems are too weak to prosecute offenders. And, in light of Kiobel, the United States generally lacks jurisdiction over entirely foreign defendants and events. This has led commentators to conclude that courts of law are poorly equipped to hear human rights cases.

But could arbitration be the answer? Consider the Bangladesh Accord, which was recently signed by over 200 apparel companies—including H&M, Abercrombie & Fitch, and Adidas—after a series of sweatshop fires in Bangladesh. Signatories agree to take numerous proactive and remedial measures…

In my first post of this series, I asked whether business leaders had unknowingly provided the legal industry with a long-term solution to declining interest in the legal profession and potential waning influence.  I suggested that business leaders may be the driving force that ends up saving the legal profession.  In my second and third posts, I discussed the current state of in-house attorneys and law firms.  Today is my birthday, so it is a great present to be able to share my view on the future of the legal profession, and how shifts may occur. 

Eventually, corporations can (and most probably will, in my view) evolve their thinking about “legal strategies” (as Professors Bird and Orozco suggest) to the point that lawyers are essential resources in developing sophisticated corporate planning. In order for this evolution to take place throughout the business world to any great degree, it will take time, experience, and success with the legal strategy concepts.  In other words, lawyers must become valuable not only for their legal skills, but also because they have inherent business talent resulting from advanced training. 

 

If this conversion is to occur, companies …

In my first post of this series, I asked whether business leaders had unknowingly provided the legal industry with a long-term solution to declining interest in the legal profession and potential waning influence.  I suggested that business leaders may be the driving force that ends up saving the legal profession, and its “respectability”.  In my second post, I discussed the current state of in-house attorneys.  In this post, I would like to look at the current state of private firms as it relates to the in-house attorney discussion.  My view is that the competitive marketplace reactions of a growing number of firms are partially contributing to the dimming of their own future prospects.  Firms will need to evolve rather quickly; how they can, I’ll discuss in a future post.  However, because of the firms’ relatively weaker position compared to corporations, many firms are in very precarious circumstances.

In this interim period between past firm dominance and the future corporate acceptance of Professors Bird and Orozco’s “corporate legal strategy” (in which attorneys are fully accepted and integrated as part of business teams in corporations, resulting in greater legal opportunities), firms are struggling.   From my discussions with attorneys, I have learned that…

Earlier this week, the Wall Street Journal ran an interesting op-ed titled The West’s Bruised Confidence in Capitalism. In the op-ed the author summarized the findings of the recently published Corporate Perception Indicator survey, which found that 36% of those surveyed reported that they viewed corporations as a source of “hope,” while 37% viewed corporations as a source of “fear.” Broken down by generation, 44% of respondents over the age of 65 view corporations as a source of “hope,” compared to 36% of millennials (defined as those aged 18-34 – darn it, I just missed the cut off!) who view corporations as a source of “fear” rather than “hope.” The survey was not limited to the U.S. and one of the more interesting findings was that 61% of all respondents wanted to hear more about the ways in which corporations help to address broader social issues. The op-ed concluded by offering this thought: “For business leaders, six years after the financial crisis and amid continuing economic uncertainty, the challenge is to show how they use their positions of power to contribute to the common good. The public world-wide wants corporations to promote shared values around growth and opportunity…

A few weeks ago a group of CEOs, business execs, policy-makers, academics and spiritual guides converged for a three-day symposium in Switzerland to discuss specific pathways for blending “inspiration,” “innovation,” and “investment”.  Indeed, the title and central theme of this year’s symposium was “Daring for Big Impact — Blending Inspiration, Innovation and Investment” and I was humbled to be invited to present my work on Shareholder Cultivation and New Governance. I left feeling inspired and with a renewed sense of purpose, and recently posted a summary of the discussions on the HuffPo. A link to that piece is available here.

Happy summer! Now that the summer solstice has passed, if you’ve ever wondered about language choice and the effects it might have on corporate behavior and objective, I invite you to check out an essay I recently made public. Spoiler Alert: I am a Seuss fan – the essay was written in conjunction with a symposium on Dr. Seuss™ and Civil Society so it requires some willing suspension of disbelief… although not entirely because I do believe that the core proposition made is sound. Here’s a short abstract:

While sustainability proponents have been building their case for why corporations should care about more than profits, this essay argues that the case for sustainability or “CSR” cannot be successfully made without engaging with the entrenched norm of shareholder primacy. This essay makes the modest yet underexplored claim that any attempt to amend, rewrite, interrogate, or, at the extreme, debunk the shareholder primacy/private purpose view of the corporation must successfully counter the “framing effect” and “framing bias” that shareholder primacy enjoys.

The full essay is available here. And if you’re in the mood for something even more off the beaten path, there is a poem in the addendum. I invite you…

So, I’ve been thinking a lot about “happiness” lately. Not just because of Pharrell’s catchy tune, but more so because I am at the beginning of a project where I am questioning whether there is room for happiness and well-being in corporate law (both in theory and in practice).

First, what do I mean by happiness? To be honest, I am not quite sure yet and that may be part of my search and exploration.  Happiness can be thought of in terms of “raw subjective feeling”, where a happy life is one that “maximizes feelings of pleasure and minimizes pain” (the Hedonism Theory). It can also be thought of in terms of fulfilling whatever it is you desire (the Desire Theory) and yet still, happiness could also be viewed as consisting of achieving “things” (for lack of a better word) that are “objectively valuable” – for example, having financial security, love, a better education, and good health (the Objective List Theory). Additionally, happiness could be thought of as encompassing all three of these theories. For example the Authentic Happiness Theory developed by Martin E.P. Seligman and Ed Royzman, views happiness as consisting of “three distinct kinds of happiness:…