On p. 17 of Rules for Principles and Principles for Rules: Tools for Crafting Sound Financial Regulation (here), Heath P. Tarbert, the Chairman and Chief Executive of the Commodity Futures Trading Commission, provides a useful table that he notes “is intended to be a helpful reference point for regulators confronted with finding the appropriate balance between principles and rules.”  I found myself thinking of how helpful a table like this – and the article in general – would have been when I was teaching courses focused on the regulation of financial markets! 

I highly recommend this very readable work to BLPB readers, especially to those teaching in the area of regulation.  In fact, I’d likely make this article assigned reading if I were teaching a course on financial regulation this fall.  It does an excellent job of providing an overview of the strengths and weaknesses of principles-based versus rules-based approaches to regulation and discussing hybrid possibilities.  It also examines four categories of factors that suggest taking one approach over the other (summarized in the p.17 table), and applies these factors to several areas (automated trading, position limits, cross-border regulations, and digital assets).             

I drafted this post before, well, the SEC got dragged into the middle of an SDNY meltdown and that’s obviously way more interesting than what I was going to say, but I have this whole post already here so… here goes.

One of the big business news stories of the past week has been Hertz and its failed stock offering. (N.B.: Well, it seemed like a big deal when this post was originally drafted)

During the pandemic, stock markets have gyrated wildly, apparently driven in part by retail traders who, left without the opportunity to bet on sports, have turned to trading as an alternative form of gambling.  They’re apparently encouraged by free trading apps and especially Robinhood, which – unlike other platforms which treat trading as srs bzns– gameifies the experience.  As one trader put it, “With sports, if I throw $1,000 at something, I lose the whole thing real quick, but here if things go south you can cut your losses.”

That particular theory was sort of tested when it came to Hertz, which is in bankruptcy.  Despite that fact, its stock started to climb, in what has been described as the equivalent of a Jackass sketch.  Everyone understood there was almost no chance of the company actually generating value for shareholders, but the coordinated attention acted as something of a combination dare, Ponzi scheme, market manipulation, and performance art.

Hertz tried to take advantage of it all by selling new stock, figuring hey, this might be an easy way to pay off its creditors, and that all by itself seems to have burst the bubble; traders weren’t expecting anyone to take them seriously.  But the plan was scotched when the SEC raised questions about the sufficiency of Hertz’s prospectus disclosures.

Really, though?

Here are the disclosures:

We are in the process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless.

And also here:

The price of our common stock has been volatile following the commencement of the Chapter 11 Cases and may decrease in value or become worthless. Accordingly, any trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks to purchasers of our common stock. As discussed below, recoveries in the Chapter 11 Cases for holders of common stock, if any, will depend upon our ability to negotiate and confirm a plan, the terms of such plan, the recovery of our business from the COVID-19 pandemic, if any, and the value of our assets. Although we cannot predict how our common stock will be treated under a plan, we expect that common stock holders would not receive a recovery through any plan unless the holders of more senior claims and interests, such as secured and unsecured indebtedness (which is currently trading at a significant discount), are paid in full, which would require a significant and rapid and currently unanticipated improvement in business conditions to pre-COVID-19 or close to pre-COVID-19 levels. We also expect our stockholders’ equity to decrease as we use cash on hand to support our operations in bankruptcy. Consequently, there is a significant risk that the holders of our common stock will receive no recovery under the Chapter 11 Cases and that our common stock will be worthless.

 Note how these disclosures were reported in the media:

“Hertz says it expects stockholders to lose all their money in filing for selling more stock”

“Hertz’s filing to sell its shares came with more dire warnings than a bottle of bleach.”

“Hertz, to its credit, disclosed the risks to prospective stock shareholders quite openly. If it had been permitted to proceed with the sale, buyers could not have said they weren’t warned.”

This does not, in short, seem like a disclosure problem at all.  And that means there’s a lot to think about.

First, there have been a lot of comparisons to the dot com bubble, and I agree, but in a very specific way.  The internet bubble featured anonymous commenters who’d engage in pump-and-dumps – recommend a stock, watch everyone pile in, and sell out – but it wasn’t necessarily the case that anyone was fooled.  People used the comments as a coordinating mechanism – which stock they’d all buy now – and play musical chairs to see who could make money and cash out before the crash.  That’s how Donald Langevoort viewed the SEC’s case against Jonathan Lebed, anyway, and it definitely is an element of what’s happening here.  (See this article about a website devoted to tracking Robinhood trades).  So all that raises the question of how much transparency markets can really bear.  (Cf. Matt Levine, writing about a different kind of transparency, in Too Much Information Can Be Bad)

Beyond that, the SEC’s interference betrays a rather surprising lack of faith both in market efficiency and investor autonomy, and thereby illustrates the SEC’s Janus-faced (heh) approach to investor protection.  Recently, the SEC has been fairly aggressive in its insistence that disclosure is a cure-all, that markets are efficient and no one needs to be told anything twice, and that retail investors should have more access to private capital.  At the same time, the SEC has resisted and denigrated the demands of actual investors regarding the types of information they need to make intelligent decisions.  And now, apparently, the SEC is willing to step in to save Hertz investors from themselves – even when they act with full disclosure on a widely traded, exchange-listed (for now), stock.  It seems the SEC has complete faith in efficient markets and investor wisdom, except when it doesn’t.

Another aspect of this story has to do with market efficiency in – as William Fisher once put it – “a time of madness.” As I said, it wasn’t just Hertz; there have been reports of retail traders playing stocks like a roulette wheel and even manipulating prices for the lulz.  There have also been several securities fraud lawsuits filed since the lockdowns, particularly ones pertaining to the coronavirus.  These are fraud-on-the-market cases, and they depend at least on market informational efficiency, if not fundamental value efficiency, which implies some amount of rationality.  Will the evident irrationality of markets at this time affect the plaintiffs’ ability to certify a class? 

It’s not an entirely crazy question; there is some precedent for courts treating market irrationality as evidence of inefficiency.  See In re Initial Public Offering Securities Litigation, 260 F.R.D. 81 (S.D.N.Y. 2009) (“there is insufficient evidence of efficiency to permit the use of the Basic presumption with respect to trading during the quiet periods. To the contrary, the evidence indicates that the quiet periods were marked by chaotic pricing, irrational purchases, and market inefficiencies.  [Plaintiffs’] own evidence demonstrates that the markets for the focus case shares were inefficient during the first weeks of trading. A purchaser of these securities during the relevant quiet period could not reasonably rely on the market price to reflect the market’s judgment of the security’s value. Therefore, the Basic presumptions cannot apply to these periods.”)

That said, the Supreme Court’s Halliburton v. Erica P. John Fund, 573 US 258 (2014), may have established a more forgiving standard for evaluating market efficiency, so we shall see.

But my final observation is this: All of this is kind of hilarious until you read these kinds of stories, where some 20-year-old Robinhood trader may have killed himself because he – mistakenly – believed he’d lost $700K.  Additionally, the Twitterati is ablaze with anecdotal reports of teens and even pre-teens trading stocks in Robinhood, treating it as an alternative to Fortnite – and I can’t wait to see what happens if those kids are trading on margin.  Now, Robinhood purports to require that accountholders be at least 18, so we have a bunch of questions: (1) are there really a bunch of children trading, or are those isolated examples no matter what Twitter says?; (2) are parents are intentionally giving their kids access to brokerage accounts, or are children just lying their way in?; and (3) just how robust are Robinhood’s age and suitability checks?  Robinhood has now promised to improve its interface regarding options trading, to consider “additional criteria and education for customers seeking level 3 options,” and to, umm, make a “$250,000 donation to the American Foundation for Suicide Prevention.” So, yay?

If you’re like me, you’re wondering how you can improve your teaching after last Spring’s foray into online learning. I wasn’t nearly as traumatized as many of my colleagues because I had already taught Transactional Drafting online asynchronously for several semesters. This summer, I’m teaching two courses — Transactional Drafting asynchronously and a hybrid course on Regulatory Compliance, Corporate Governance, and Sustainability. I’m making a list of tips based on my experience and will post about that in the future. In the meantime, I’ve started to think about how I can improve next semester when I will be teaching all of my courses online. Since I know that so many students had a mediocre to poor experience with emergency online teaching, I’ve spent a lot of time on webinars learning how to do better. This will be the first in a series of posts on what I’m learning on course design, learning styles, and best practices. But let’s start with the basic questions to ask yourself as you’re preparing for next semester.

First, think about whether you want to teach synchronously or not. If you’re looking for maximum flexibility for both you and the students, then asynchronous teaching makes sense. If you’re teaching solely asynchronously, then you need to consider how to make your videos and content as engaging as possible. You also have to do something to build community within the class and a rapport between you and the student. If you’re thinking of doing a hybrid, perhaps using a flipped classroom,  recognize that it will take longer to prepare than you would think. For my summer compliance course, I record videos on substantive legal issues, monitor discussion on the class discussion board, prepare questions for students to answer prior to class using Echo 360, and then review those answers all prior to teaching the 2-credit course live on Zoom. This requires substantially more time than normal class prep, but it’s well worth it because we can use class time to do simulations or interact with guest speakers from all over the world. More about these issues will come in a future post. 

Second, learn everything you can about the platforms you will use next semester so that you can master all of the features that will make your class more engaging. Even if your institution does not require you to use one platform, try to come to some consensus anyway. Students do not want to learn three different systems so do what you can to make sure that the platforms are uniform and intuitive for them. Then think of whether all of the tools you’re already using can integrate with that platform. Our university is using Blackboard, Echo 360, and Zoom. The students will have one place for logon and access everything from there. Next, think about whether you want to have students use discussion boards to interact or maybe develop Slack or Microsoft Teams instead. Since many students are uncomfortable speaking in class on video, we will have to work harder to foster classroom discussion. Teams and Slack channels can help, and many students will already use them for internships or business purposes. The more intentional you are, the better an experience your students will have, even if it takes some time to determine what works for you. If you have a research assistant or student you can contact, find out which tools did and didn’t work from their Spring experience. See if your university will survey students for feedback on online learning,

Third, think about whether you have the right equipment. Do you need a separate headset, webcam, or microphone? I actually don’t use any of those even though I have a separate microphone. How stable is your internet? Think about whether you might need an upgraded modem or even your own mesh network. One thing I absolutely recommend is a ring light. There are hundreds of YouTube videos on how to light yourself properly using your household lamps. But, I’ve found that having a separate ring light makes my videos brighter and more professional looking. 

Finally, while you’re designing your course, make sure you’re thinking of the Americans with Disabilities Act. At UM, we’ve been told to do the following for presentations:

  • provide wording for links and avoid using “click here” for the links;
  • use sans serif fonts for easy readability;
  • use dark font colors on light backgrounds;
  • avoid extremely bright colors as a background color;
  • use one font throughout the site;
  • avoid overuse of all CAPS, bold or italics;
  • avoid underlining words, as the screen reader can mistake it for a navigation link;
  • make sure that images are clear and optimized for efficient loading;
  • limit the use of animated and blinking images  text, or cursors because they  can cause seizures for some people;
  • make sure that audio file lengths are adequate to meet the goals of the activity without being too large to restrict users’ ability to download the file on computers with lower bandwidths;
  • provide a written transcript  with all audio files; and
  • provide closed-captioning or has accompanying text-based scripts for all videos.

After you’ve thought through some of these baseline issues, you can then turn to making your content as interesting and accessible for your students as possible. Future posts will cover tips for effective presentations, tools to increase engagement, and other best practices. In the meantime, if you have any tips to share or areas you want covered, please comment below. 

Just a quick reminder that the 2020 National Business Law Scholars Conference–the 11th annual conference and our first virtual conference–begins tomorrow morning at 9:00 am EDT and extends through Friday afternoon at 4:30 pm EDT.  The conference schedule is available here.  Even if your workday is full, think about joining us (with or without a beverage) for some business law fellowship at 6:15 pm EDT tomorrow during our virtual happy hour.

Please make sure that you have upgraded your Zoom client to Zoom 5.0 before attempting to join in from your computer.  Effective as of June 1, Zoom is no longer supporting earlier versions.  If you have questions about upgrading, check out this page from the Zoom Support Center.

We hope to see many of you there!

The New Public Interest in Private Markets: Transactional Innovation for Promoting Inclusion

January 5-9, 2021, AALS Annual Meeting

The AALS Section on Transactional Law and Skills is pleased to announce a program titled The New Public Interest in Private Markets: Transactional Innovation for Promoting Inclusion during the 2021 AALS Annual Meeting in San Francisco, California. This session will explore how recent developments in corporate and transactional practice address issues of bias in corporate governance and the workplace, with examples ranging from Weinstein representations & warranties in M&A agreements to California’s Women on Boards statute to inclusion riders in the entertainment industry. These developments raise immediate questions of whether public policy goals of achieving greater inclusivity are being met, and they also shed light on perennial debates about the role public law and private ordering play in spurring social innovation.

In addition to paper presentations, the program will feature a panel focusing on how to incorporate concepts, issues, and discussions of equity and inclusivity across the transactional
curriculum, including in clinics and other experiential courses, as well as in doctrinal courses.

FORMAT: Scholars whose papers are selected will provide a presentation of their paper, followed by commentary and audience Q&A.

SUBMISSION PROCEDURE: Scholars who are interested in participating in the program should send a draft or summary of at least three pages to Professor Matt Jennejohn at
jennejohnm@law.byu.edu on or before Friday, August 21, 2020. The subject line of the email should read: “Submission—AALS Transactional Law and Skills Section Program.”
Scholars whose papers are selected for the program will need to submit a draft by December 16, 2020.

Pursuant to AALS rules, faculty at fee-paid non-member law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit. Please note that all presenters at the program are responsible for paying their own annual meeting registration fees and travel expenses.

We have been having an on-going discussion about corporate responses to the protests and riots (see here, here, and here). A large chunk of that discussion has focused on my proposal (here) to add enhanced scrutiny to business decisions sufficiently raising a specter of political bias, and whether such enhanced scrutiny would be warranted for corporate decisions to strongly support “Black Lives Matter” while staying silent on the riots. The relevant posts have apparently been of interest to our readers, having been shared a combined 600+ times as of this writing. The discussion has many moving parts, and my views of the relevant issues have advanced as a result. Thus, I thought it worth updating and summarizing at least some of my current positions.

1.  The idea that “black lives matter” is unquestionably correct, and it is appropriate and important to strongly affirm that idea in light of current events.

2.  Perhaps the foregoing should end the discussion, but politically-charged controversy lurks just around the corner. Is “Black Lives Matter” an idea or a movement? If the latter, what are corporations endorsing when they emblazon their corporate banners with the phrase? Are they putting their weight behind the “defund the police” movement? What about blue lives? Google “police ambushed” and you’ll see that’s unfortunately a thing. Why aren’t we seeing corporations get behind “Blue Lives Matter”? Should those who connect the BLM movement with hatred of the police be simply dismissed as racists? Does endorsing “Black Lives Matter” mean corporations will now refuse to stand for the national anthem (metaphorically)? And while condemning the killing of George Floyd and inequality is obviously correct, where is the condemnation of the riots?

3. Having said all that, does allowing concerns like those expressed above to trigger enhanced scrutiny lead to too many false positives, even if one believes political bias in corporate decision-making is a problem and that enhanced scrutiny of at least some business decisions could be an appropriate response thereto? Co-blogger Ann Lipton did a great job in her prior comments of pointing out that political controversy can be found lurking around many business decisions these days. Uncertainty is costly, and perhaps the uncertainty regarding the identification of business decisions sufficiently suggestive of political bias to warrant enhanced scrutiny is simply too high.

4. Nonetheless, I continue to believe that political bias in corporate decision-making is a problem that warrants a response. Private ordering and market solutions certainly may be sufficient, but that doesn’t mean judicial or legislative responses shouldn’t be considered. Furthermore, it is important to not overstate what enhanced scrutiny, as proposed, implies. At the end of the day, it merely asks corporate decision-makers to confirm that they are doing what they are already supposed to be doing, which is to consider all material information reasonably available when making business decisions; it does not mandate any particular outcome, and generally leaves board discretion intact. Furthermore, protective devices such as heightened pleading standards and a safe harbor for viewpoint diverse boards at least promise the possibility of efficiently balancing the relevant costs and benefits. Finally, and as alluded to earlier, perhaps there is a way to distinguish decisions that have as obviously strong a starting foundation as set forth in item #1 above. Courts are good at using materiality determinations to dismiss what they deem to be frivolous litigation. Perhaps we just make room for a defense that amounts to saying that all the material information corporate decision-makers need here is that black lives matter.

ADDENDUM (11:15 AM): Another protection against frivolous claims we haven’t mentioned is the need to plead damages.  In my paper, I discuss Nike’s decision to make Colin Kaepernick a face of the brand, but frame that entire discussion in the understanding that a viable claim is limited under my proposal given the stock market’s overall positive response. To the extent this constitutes a modification of Unocal’s enhanced scrutiny, I consider it appropriate. Cf. Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304, 312 (Del. 2015) (“Unocal and Revlon are primarily designed to give stockholders and the Court of Chancery the tool of injunctive relief to address important M & A decisions in real time, before closing. They were not tools designed with post-closing money damages claims in mind ….”).

 

The full schedule for the 2020 National Business Law Scholars Conference, which is being hosted on Zoom Thursday and Friday of this week, is now available.  You can find it here.  If and as additional changes are necessary, we will re-post.

As is always the case, the conference includes folks presenting work in a variety of areas of business law.  These traditional paper panels are the heart of the conference.  In addition, as I noted in my post last week, we are including three plenary sessions–one on “Business Law in the COVID-19 Era,” one reflecting on teaching business law in the current environment, and one on current bankruptcy law and practice issues.  There is something for almost everyone in the business law space in the conference program.

I am pleased and proud to note that several of my fellow bloggers from the Business Law Prof Blog are participating in the conference this year.  They include (in addition to me): Colleen Baker, Ben Edwards, Ann Lipton, and Marcia Narine Weldon.  I hope many of you will join us for all or part of the program and offer comments to colleagues on and relating to their work.

Recently, I listened to the NPR Hidden Brain’s podcast titled “Playing Favorites: When Kindness Toward Some Means Callousness Toward Others.”

This podcast hit on topics that I have been thinking about a good bit lately—namely selfishness, giving, poverty, family, favoritism, and a culture of “us against them.” This post only has the slightest connection to business, so I will include the rest of the post under the break.

Continue Reading “How Big is Our ‘Us’?”

Thanks to Andrew Jennings, a draft comment letter on the draft model whistleblower statute is now open for signatures and comments.   If you’re interested in joining, you can access the comment letter here.  I’ve signed on.  If you have other thoughts that the drafters should consider, the deadline for comments is June 30th.  Hopefully, the NASAA draft will incorporate the insights we gained from watching the federal whistleblower bounty program begin its operations.

The following will likely not make much sense if you haven’t read the preceding relevant discussion, most of which can be found here. The core issue addressed is whether the decision of many corporations to strongly support Black Lives Matter while staying silent on the riots should be insulated from scrutiny by the business judgment rule. I have put my original comments in bold, responses by Idriss Z in italics, and my further responses in plain text. In addition to comments on the substance of this post, I hope readers will let me know if the formatting can be improved.

“Are the corporate executives making these decisions doing so in accordance with their fiduciary duty to become informed of all material information reasonably available (which requires consideration of the impact of these decisions on the bottom line)…”

IZ- Of course they are! Many cases have held that companies can acquire much goodwill and better pr from such community action (examples have included charitable donations and philanthropy to local schools, including HBCUs). Or a more “hip” take: African American culture might be the most profitable marketing material source in the world, people all over the global love the various arts that come from our (unfortunately) marginalized communities.

You provide good reasons for concluding the decision is rational, but that does not tell us whether it was properly informed. Those are two different inquiries. For example, if the type of polling data I set forth in my prior comments (from here) was available, then that likely should have been considered. Charitable contribution cases are best treated separately from cases involving ordinary business decisions.

“…, or are they simply acting on the basis of some echo-chamber supported confidence in the obvious rightness of their beliefs”

IZ- One of the best aspects of the American system compared to those of the English commonwealths in my estimation is the lack of mental probing done to business decision-makers. What a ridiculous assertion it would be that there was some pro-Black echo-chamber effect in board rooms that are under criticism for having virtually no Black board members, right? Moreover, where are you getting their ideas or confidences in their beliefs from? You wouldn’t be just making it up?

How free from scrutiny corporate decision-makers should be in cases like this is the issue. Many people believe the heightened political divisions of our day don’t constitute a good reason for additional scrutiny. As I’ve written elsewhere, I believe they do. Under my proposal, if a corporate decision appears to be sufficiently politicized, then our lack of knowledge regarding the decision-making process becomes a reason for increased scrutiny, not a reason for continued insulation of the decision. Whether the decision in this case is objectively politicized enough to warrant additional scrutiny would be a question of fact. One might point to the fact that, according to at least one poll, 71% of Americans supported National Guard intervention in the riots (more on that poll here), while 62% do not strongly support BLM (assuming we can read failure to choose “strongly support” as “don’t strongly support”). Yet corporate decision-makers made strong statements in support of BLM while remaining silent on the riots. Finally, the echo-chamber I’m referring to is a progressive echo chamber — and it can be all white.

“– completely ignoring, if not being downright disdainful of, the views of the half of the country that believes law and order, blue lives, and black lives all matter?”

IZ- Again, it is unclear where you’re getting your facts from, I am unable any factual support for this. Also, I think you might want to check the poll numbers on people’s preferences. Moreover, supporting BLM and Civil rights for marginalized communities does not put you in opposition to law, order, or any other life. In fact many have quite intelligently and correctly pointed out that suggesting that supporting BLM and Civil Rights does put you in opposition is flat-out racist. Moreover, many have also correctly pointed out that alleging that one who supports BLM and Civil Rights supports riots is also in completely disregard of the gulf separating factual and disingenuously racist. Or consider this: “half” the country believes the world is flat, must board members take factor that unscientific argument into their decisions?

I agree that the numbers matter.  And someone can agree with my proposal for heightened scrutiny of politicized decisions without agreeing that such scrutiny is appropriate here. Assuming we adopted heightened scrutiny for facially politicized decisions, the costs of heightened scrutiny argue in favor of keeping the scope of triggering facts narrow. Having said that, I think the polling I’ve identified so far provides at least some support for my position in that it concludes 71% of Americans supported some type of National Guard intervention in the riots, while 62% were reported to not strongly support BLM (including almost 30% of blacks, and almost 70% of whites). Of course, those numbers could be wrong and/or I could be wrong about the relevant weight/interpretation of those numbers. In all this, it’s important to keep in mind that the heightened scrutiny I’m advocating for merely seeks affirmation that corporate decision-makers are informing themselves of all material information reasonably available. It does not require a particular outcome. In this case, evidence that available relevant polling was considered would arguably be sufficient to carry that burden, even if the decisions remain the same.

Furthermore, I agree that there is no necessary conflict between “supporting BLM and Civil rights for marginalized communities” and supporting “law, order, or any other life.” In fact, we should expect them to support each other. I also agree that racists would want to draw connections between BLM and the riots. However, I don’t agree that corporate decision-makers can ignore relevant public opinion, including the relevant concerns of well-intentioned non-racists who may be having a hard time separating the protests from the riots, however misguided those concerns might be. Accordingly, if half the country believes the world is flat, then corporate decision-makers absolutely have a duty to consider that information when making a decision to roll out a “world is round” campaign. In fact, if the board is made up exclusively of round-earthers, and they refuse to even consider the contrary public opinion of half the nation (assuming those people would otherwise reasonably be deemed potential customers), then they would be acting in bad faith.  The centrality of this point to my proposal is difficult to overstate. Critically, however, nothing requires them to shelve the campaign based on that information. They just need to fully inform themselves of all information reasonably available, and have a rational business purpose for their ultimate decision– which typically shouldn’t be hard to do.

“Such a conscious disregard of reasonably available material information would constitute not only a breach of their duty of care, but also bad faith.”

IZ- Well, as I’ve pointed out these “conscious disregards” would be impossible to prove and are only based on conjecture. Moreover, there is a duty of care to all members of the community, so supporting a group such as BLM and civil rights would be beneficial to all members, a rising tide raises all ships. Whereas disapproval of these groups might certainly fit your criterion as they are of benefit to exactly no one. Further, consider the ramifications of your approach-> would not every corporation face the exact same liability for putting their name on a College Football Bowl Game should a “riot” breakout?

An utter failure to properly inform oneself would suffice to support a finding of bad faith consistent with a conscious disregard of a known duty. If we shift the burden to corporate decision-makers to show that they properly informed themselves, and they are unable to carry that burden – that is sufficient. I certainly want the heightened scrutiny I propose to leave significant discretion to corporate decision-makers to appropriately consider the impact of decisions on stakeholders. Nothing I’m proposing should prevent corporate decision-makers from concluding that strong support for BLM is in the best interests of the corporation, while at the same time concluding silence on the riots is likewise best. The only way my proposal should interfere with those decisions is if the decision-makers failed to properly inform themselves.  Finally, the mere coincidence of a sponsorship decision and a riot would not trigger heightened scrutiny under my proposal.