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Earlier this week, the Wall Street Journal reported that many institutional investors – including large mutual fund complexes like BlackRock and State Street – have become concerned about “overboarding,” namely, the phenomenon where corporate directors sit on multiple boards.

There are good reasons to be concerned.  Researchers have found that in many, though perhaps not all, cases when corporate directors are “overboarded” – and thus presumably unable to devote their full attention to governance at particular companies – companies are less profitable and have a lower market to book ratio.  (Similarly effects are found for distracted directors.)

That said, there’s a particular irony in seeing mutual fund companies, of all investors, leading the charge.  Most mutual fund companies employ a single board – or a few clusters of boards – to oversee all of the funds in the complex.  This can result in directors serving on over 100 boards in extreme cases.  State Street’s Equity 500 Index Fund, for example, reports trustees who serve on 72 or 78 boards within the complex.  BlackRock’s Target Allocation Funds have trustees who serve on either 28 and 98 different boards (depending on how you count).

I’ll admit this…

States frequently compete with each other to attract businesses.  They’ll offer tax credits, subsidies, and regulatory waivers to persuade corporations to set up shop locally.  (Right now, Amazon is asking cities to compete to host its second headquarters.)  These incentives may or may not work out well for the state; it’s not uncommon for the promised jobs to disappear.  Meanwhile, competition among states can promote a race to the bottom, with states offering increasingly generous – and unaffordable – financial packages in exchange for a temporary boost in economic activity.

Wisconsin’s new deal with Foxconn represents a striking new frontier in these wars between the states.  Foxconn is a Taiwanese company with a history of reneging on its promises to establish manufacturing plants in exchange for rich government incentives.  Nonetheless, Wisconsin has promised it $2.85 billion over 15 years if it will build a $10 billion plant and hire 13,000 workers.   And to sweeten the deal, Wisconsin has also promised Foxconn preferential treatment in the Wisconsin court system.

Apparently concerned that its grant of certain environmental waivers may prompt local lawsuits, Wisconsin has promised Foxconn an expedited litigation process, including automatic stays of trial…

Here at BLPB, Joan Heminway has written a couple of posts discussing comparisons between norms in corporate theory, and norms in democratic theory.   A few months ago, she discussed the potential conflicts between Donald Trump’s private business interests, and his role as a “fiduciary” for the United States.  As she pointed out, in corporate law, we have procedures to address potential conflicts, which include fully informed approval by the principal or unconflicted fiduciaries, and external review to determine fairness.  But there is no similar procedure to address conflicts in the political realm.

Well, it appears that Joan’s not the only one thinking along these lines.  I read with interest this amicus brief submitted in the Supreme Court case of Gill v. Whitford, posted by Professor D. Theodore Rave at the University of Houston.  The case itself is about political redistricting, but Prof. Rave makes the intriguing argument that redistricting should be addressed the same way we address conflicts of interest in business law.  Specifically – and drawing on his earlier article in the Harvard Law Review, Politicians as Fiduciaries – he proposes that districts drawn by independent commissions receive a lower level of scrutiny than districts drawn by…