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Stefan J. Padfield

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Director of the NCPPR's Free Enterprise Project. Prior experience includes 15+ years as a law professor, two federal judicial clerkships, private practice at Cravath, Swaine & Moore, LLP, and 6 years enlisted active duty (US Army). Immigrant (naturalized).

On June 11, 2015, the Delaware House of Representatives joined the Delaware Senate in passing a bill that would prohibit fee-shifting bylaws by Delaware stock corporations. The bill awaits signature by Delaware Governor Jack Markell. Nonetheless, the panel provides a nice debate, between practicing attorneys, and is available here. The information from the Chancery Daily is below. 

Fordham Law School hosted a panel on Fee Shifting in Shareholder Litigation, featuring three members of the corporate law council of the Delaware State Bar Association, which submitted proposed amendments to the Delaware General Corporation Law that would preclude the adoption of fee-shifting provisions in corporate instruments, on Thursday, March 26, 2015.  A webcast video of the panel is now available online here.
 
Moderated by:

Professor Sean J. Griffith – Fordham Law School

Panelists:

Frederick Alexander – Morris Nichols Arsht & Tunnell
Chris Cernich – Institutional Shareholder Services
Kurt Heyman – Proctor Heyman Enerio
Mark Lebovitch – Bernstein Litowitz Berger & Grossman
Norman Monhait – Rosenthal Monhait & Goddess
Andrew Pincus – Mayer Brown

Oregon has done those interested in social enterprise a great service by posting a list of their benefit companies online. Oregon also has a nice page about becoming an Oregon benefit company.

By my count, the version updated 6/3/15, lists the following number of entities (for a total of 500 benefit companies):

  • 1 professional benefit corporation 
  • 74 benefit corporations 
  • 425 benefit LLCs

Oregon is one of a very few states that provides for the formation of benefit LLCs, in addition to benefit corporations. As you can see, the benefit LLCs are a good bit more popular than the benefit corporations, likely because most social enterprises are small, closely-held entities that should probably be LLCs instead of corporations.  

LLC law is generally flexible enough to allow a social purpose and Oregon’s corporation law expressly allows corporations to be formed for a social purpose, so the main draw seems to be branding/signaling based rather than law based.

These are still relatively small numbers in the grand scheme, but it was a fairly short time ago that there were fewer than 500 total benefit companies nationwide.    

Recently, I received notice of the following call for papers from the French association of Law Professors in Business Schools – the Association des Professeurs de Droit des Grandes Ecoles (“APDGE”).  The theme of the conference is “Governance and Compliance in Companies: Constraints or Opportunities.” Additional information is available below and at the conference website:

——————-

TBS PDD

 3rd Conference of the Association of Law Professors of Les Grandes Ecoles/Business Schools, organized by Toulouse Business School

 

CALL FOR PAPERS

“Governance and Compliance in Companies: Constraints or Opportunities?”

December 3-4, 2015 – Toulouse Business School

Toulouse, France

Conference Website: http://www.tbs-education.fr/en/apdge-conference/

The taking into account of new legal rules (whether in Company Law, Banking Law, Tax Law, Environmental Law, Employment Law, Consumer Law, Digital Law, or in other fields of Law), involves increased attention to Governance and Compliance by companies, as well as by research professors.   The position of Chief Compliance Officer has become widespread within major companies, as have charters, codes of good conduct and codes of good governance.  Consequently, it is appropriate to look at Governance and Compliance in companies and to investigate whether or not they form constraints or opportunities for companies.    To what extent does the appearance of new legal and regulatory provisions represent new constraints for companies? On the contrary, may opportunities be detected in these practices in order to deal with upheavals in the Law?  What skills are necessary for lawyers in this new environment?  What are the roles of soft law and of Corporate Social Responsibility (CSR) in this context?

These two research days propose to focus discussion on constraints and opportunities for companies in the development of the new rules and practices of Governance and Compliance.

This Call for Papers seeks to explore the following questions (as illustrations, not limitations):

  • The links between Governance and Compliance, on the one hand, and Corporate Social Responsibility (CSR), on the other hand;
  • Programs to be put in place for a better compliance;
  • The role of lawyers  in Governance and Compliance;
  • Opportunities for good Governance and proper Compliance  for companies;
  • The impact of foreign laws on Governance (for example, the Sarbanes-Oxley Act);
  • The legal risks in a breach of compliance;
  • Legal monitoring and anticipation of new legal and regulatory constraints;
  • Government procurement and a company’s history of Compliance ;
  • The interface between internal control (internal auditing, reporting, etc.) and the Law;
  • The legal challenges of whistleblowing;
  • The strategic role of Compliance;
  • The interface between company lawyers, external advisors and operational staff in Governance and Compliance;
  • The theory of groups of parent companies or subsidiaries and Compliance;
  • Control of the chain of sub-contractors and subsidiaries and Compliance;
    • Analysis of the effectiveness of soft law in Compliance;
    • Investors and Governance;
    • The comparative study of Governance. 

A publication of the best papers is foreseen.

Key Dates

Proposals: June 30, 2015

Full Text: September 1, 2015

Author Notification by the Scientific Committee: October 12, 2015

[More information after the break]

The New Yorker recently ran an interesting article entitled Patagonia’s Anti-Growth Strategy. Patagonia is a certified B corporation and a California benefit corporation.

As a customer, Patagonia is my favorite company for casual/outdoor clothing, and one of my favorite companies in any industry. Initially, I thought Patagonia’s clothes were insanely expensive, but their clothes have been much cheaper on a “cost-per-wear” basis than any other clothes I have bought. In an age of cheap products and rampant consumerism, Patagonia is striking a chord with those who wish to buy fewer, quality products.

A taste of the article follows, but go read the entire thing.

The company’s anti-materialistic stance ramped up on Black Friday, 2011, with a memorable full-page advertisement in the Times that read, “Don’t Buy This Jacket.” The ad’s text broke down the environmental costs of the company’s top-selling R2 fleece sweater and asked consumers to think twice before buying it or any other product. The attention the ad received helped to bump Patagonia’s 2012 sales significantly. . . . Patagonia is trying second-hand-clothing sales at its shop in Portland, Oregon, and has made product repair and recycling a growing part of its business model. It recently invested

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I just signed up for the SEALSB Annual Conference, which will be held in Atlanta, GA from November 12 through 14. I have attended and presented at the SEALSB Annual Conference each of the past two years. Both years we had a good group of professors.

The paper presentations are not limited by legal subject area, and the presentations in past years have covered issues in corporate governance, constitutional law, employment law, international law, sports and the law, franchise law, and other areas.

The conference is intended for “teachers and scholars in the fields of business law, legal environment, and law-related courses outside of professional law schools.” Most participants teach legal studies in business schools. I am told that those who interested in or exploring teaching legal studies outside of a law school are also welcome.

Conference registration information is available here. 

Earlier this month, The Tennessean reported that the state of Tennessee approved $8 million of incentives for the fourth season of ABC’s show Nashville. The city of Nashville also plans to chip in about $500,000.  According to the article, the “show spends about $20 million each season on local labor.”

Economic incentives seem to be increasingly common, but this arrangement is interesting for a few reasons. First, this is an arrangement that not only brings jobs to town, but also brings publicity and tourists. Second, the lion share of the incentives appear to be coming from the state, but the lion share of the benefits seem to be directed at the city of Nashville – causing some in other parts of the state to complain. 

Some businesses, like the Bluebird Cafe, are featured regularly on the show, and I wonder whether they pay for that privilege. I don’t think they do, but have not been able to find out for sure. 

My wife and I watch the show, if only because we like seeing our city on TV. Nashville is a wonderful place, has been called an “it city” and the “south’s red hot town.” Even…