Current Affairs

Subscribe to Current Affairs via RSS

Regular readers of this blog have seen several posts discussing the materiality of various SEC disclosures. See here and here for recent examples. I have been vocal about my objection to the Dodd-Frank conflict minerals rule, which requires US issuers to disclose their use of tin, tungsten, tantalum and gold deriving from the Democratic Republic of Congo and surrounding nations, and describe the measures taken to conduct audits and due diligence of their supply chains. See this post and this law review article.

Last year SEC Chair Mary Jo White indicated that she has concerns about the amount and types of disclosures that companies put forth and whether or not they truly assist investors in making informed decisions.  In fact, the agency is undergoing a review of corporate disclosures and has recently announced that rather than focusing on disclosure “overload” the agency wants to look at “effectiveness,” duplication, and “holes in the regulatory regime where additional disclosure may be good for investors.”

I’m glad that the SEC is looking at these issues and I urge lawmakers to consider this SEC focus when drafting additional disclosure regulation. One possible test case is the Business Supply Chain Transparency on Trafficking and…

A new poll, conducted by Greenberg Quinlan Rosner Research, suggests that the desire for new Wall Street regulations has not been maximized by candidates for political office.  Here are some of the poll’s key findings.  The release about the poll states:

A strong, bipartisan majority of likely 2014 voters support stricter federal regulations on the way banks and other financial institutions conduct their business. Voters want accountability and do not want Wall Street pretending to police themselves: they want real cops back on the Wall Street beat enforcing the law.

As evidence, the release notes that David Brat’s upset win over Eric Cantor in the Virginia 7th District Republican primary, may have been related to Brat’s attack on Wall Street, sharing Brat’s words from a radio interview: “The crooks up on Wall Street and some of the big banks — I’m pro-business, I’m just talking about the crooks — they didn’t go to jail, they are on Eric’s Rolodex.”

The poll found that voters consider Wall Street and the large banks as “bad actors,” with 64% saying,  “the stock market is rigged for insiders and people who know how to manipulate the system.”  Another 60% want “stricter regulation on the way banks and other…

My former colleague, Scott Pryor (Regent), recently posted an interesting article entitled Municipal Bankruptcy: When Doing Less is Best. In 2013 Professor Pryor was the Resident Scholar of the American Bankruptcy Institute.  His paper’s abstract is below.  

The bankruptcy process takes as a given the pre-bankruptcy allocation of economic risk. Yet, the Bankruptcy Code permits this risk to be reallocated through the adjustment process so long as that reallocation is “fair and equitable,” does not “discriminate unfairly,” and is in the “best interests” of creditors. The first two look to bankruptcy law for their definitions; the third derives from state law.

Chapter 9 of the Bankruptcy Code does not resolve any conflicts among these requirements. This uncertain state of affairs generates a powerful incentive among most parties to settle. So long as the court retains the power to dismiss the case and remit the conflicts to the vagaries of state adjudication, Chapter 9 functions to create an institutional game of Chicken driving stakeholders to consensus.

Greetings from Salvador, Bahia, one of the twelve cities hosting the World Cup. Apologies in advance for any spacing issues. I am typing on an iPad with spotty internet service in Brazil so editing is an issue.
The long plane ride gave me some time to reflect on the Law and Society Conference I attended two weeks ago. It was my second time and once again, it didn’t disappoint. I served as the discussant on a panel on Theorizing the Corporation with Elizabeth Pollman, Charlotte Garden and Sarah Haan. All of the papers talked about a right to speak. The common theme was the question of who is speaking, the basis of that right and whose interests are being served by the speech. I found them particularly interesting given my background. Prior to joining academia I was a deputy GC and our PAC and lobbying activities reported to me.
Elizabeth Pollman presented “The Derivative Nature of Corporate Constitutional Rights”, which she co-authored with Margaret Blair. She started off by providing us with a 200-year history of the corporation which I plan to incorporate in my BA class next fall. Her paper provided a framework for the court to think about…

The following comes to us from Maximilian Martin, Ph.D., the founder and global managing director of Impact Economy, an impact investment and strategy firm based in Lausanne, Switzerland, and the author of the report “Driving Innovation through Corporate Impact Venturing.”

In 2010, despite the then-recent economic downturn, an overwhelming majority of corporate CEOs in the UN Global Compact-Accenture CEO Study on Sustainability—93 percent—responded that sustainability will be critical to the future success of their companies. What’s more, they believed that a tipping point could be reached that fully meshes sustainability with core business within a decade, fundamentally transforming core business capabilities, processes, and systems throughout global supply chains and subsidiaries. Three years later, a new 2013 edition of the study argued that many corporate CEOs have found themselves stuck on the ascent towards sustainability.

Radical change in market structures and systems is needed, and a bolder path for industry transformation needs to be charted, at a time when the logic of value creation is changing. The days of traditional corporate social responsibility (CSR)—the bolt-on approach that is compliance driven, costs money, and produces limited reputational benefits—are fast coming to an end, because sustainability is now increasingly driving value creation itself. Assessing joint opportunities for financial and social returns is the way forward.

[CONTINUE AFTER THE BREAK]

If you were designing a massive open online course (a “MOOC”), how would you make it as effective as possible? 

This week I am not looking at how MOOCs compare to in-person courses, but rather I am looking at how various MOOCs compare to one another. 

A few of my thoughts are below. 

Studio Filming.  Some of the earlier MOOCs, like Ben Polak’s Game Theory class at Yale, simply set a camera in the room and recorded the class.  Even with a dynamic professor like Polak, this strategy did not seem to fit the medium well.  Later MOOCs, like Northwestern University’s Law & Entrepreneurship course, were filmed specially for the MOOC, in what appears to be a studio of sorts.  The studio, edited versions of a course seem to produce a much more efficient and engaging experience.  To increase engagement even further, some have asked whether celebrities like Matt Damon should teach MOOCs (presumably from a script prepared by professors in the field)…or maybe professors should take acting classes.

Deadlines and Certificates.  It is well-known that the completion rate for MOOCs is miserable.  The completion rate has been reported as less than 7%.  I imagine…

Last week I posted about proxy advisory firm ISS and its recommendations regarding Wal-Mart and Target.

This week the US Chamber of Commerce weighed in on the two main proxy advisory firms, what the organization sees as their potential conflict of interests and the lack of transparency, and the SEC’s imminent release of guidance on the firms. It’s worth a read and has some great links.

Next week I will be blogging from Salvador, Brazil where I will be enjoying the World Cup. I will post a brief recap of some of the business-related Law and Society sessions I attended in Minneapolis last weekend. With all of the controversy that invariably surrounds a large sporting event in a country that scores high on the corruption perception index, I may even be inspired to write a law review article on the FCPA. 

Institutional Shareholder Services (ISS) has always had a lot of influence – some think too much- and it’s also received quite a bit of press this week. First, the Wall Street Journal reported that the proxy advisory firm slammed Wal-Mart’s board for lack of independence regarding its executive pay practices in particular how compensation is (un)affected by declining company performance. ISS also raised concerns about the company’s ongoing FCPA troubles and how or whether executives will be held accountable. ISS called for more board independence. Given the fact that the Walton family owns 50% of the company stock, it’s not likely that ISS’ recommendations will have much weight, but it’s still noteworthy nonetheless.

This morning, the press reported that ISS took aim at another troubled company, Target. In addition to its revenue declines, Target also reported a massive data breach last year, which led to numerous shareholder derivative suits. ISS recommended that seven of the ten board members lose their seats for failing to adequately monitor the risk. Target has already made a number of significant management changes. This recommendation from ISS may be an even bigger wake up call to board members (including those outside of Target) about…

Greetings from the Law and Society conference. Tomorrow I serve as the discussant on a panel entitled Theorizing the Corporation at Legal Intersections with Professors Charlotte Garden of Seattle, Sarah Haan of Idaho and Elizabeth Pollman of Loyola, Los Angeles. We will debate/discuss corporate personhood and how Citizens United has affected elections in ways that people might not expect. I’ll explain more about that and other panel discussions in next week’s blog.

If you’re at the conference or Minneapolis, swing by the University of St. Thomas, Room MSL 458 at 12:45 on Friday.

A New York Times article this weekend explained that many U.S. Supreme Court decisions are altered after they have been published, sometimes quickly and other times much later.  Article author Adam Liptak explains:

The Supreme Court has been quietly revising its decisions years after they were issued, altering the law of the land without public notice. The revisions include “truly substantive changes in factual statements and legal reasoning,” said Richard J. Lazarus, a law professor at Harvard and the author of a new study examining the phenomenon.

The court can act quickly, as when Justice Antonin Scalia last month corrected an embarrassing error in a dissent in a case involving the Environmental Protection Agency.

But most changes are neither prompt nor publicized, and the court’s secretive editing process has led judges and law professors astray, causing them to rely on passages that were later scrubbed from the official record. 

I have followed this particular change because of my interest in the EPA case, but I suspect this article is the first many people had heard of it.  It makes some sense that articles would be fixed before going to final print, but the idea that opinions have been changed…