As a student, I hated exam review sessions. I considered them coercive. I felt compelled to attend even if I had no questions, lest I miss something important the professor might say.

Because of that, I have always been reluctant to hold exam review sessions in my own classes. But I recently realized that technology can eliminate the coercion. As long as I record the review session and make it available to all students, no one is compelled to attend. Students who skip the voluntary review session can check the recording to make sure they didn’t miss anything of interest.

I have been making recordings of my classes available to students for several years, so I should have thought of this much sooner. I usually blame my spouse for my failures, so I’ll try to think of some way to blame this on her as well.

I’m not sure why students still want exam review sessions. In this era of ubiquitous email, you don’t need to have the professor in the room to ask questions. And my email responses are probably better than off-the-cuff answers in class. But, for whatever reason, students still like review sessions and, now that the coercive element is gone, review sessions they shall have.

June 6-7 Emory Law’s Conference on Transactional Law–register here; view program here

June 7-9 AALS Workshop on Blurring Boundaries in Financial and Corporate Law–information here; registration here.  (early bird ends today, May 2nd).

-AT

For those interested in some empirical research on the new hybrid entities (a/k/a social enterprise):

There are still relatively few of these hybrid entities being formed, but they have definitely started a lot of conversations.  

During the school year before this past one, I had the privilege of serving as the faculty advisor for a law review symposium.  We brought in an excellent group of professors and practitioners and, at least from my point of view, the symposium went quite well.  The planning process, however, was much more involved than I had originally thought.  All professors should go through the conference planning process at least once, if only to gain more respect for those who plan the conferences at which we present and attend.    

While I am certainly not a conference planning expert (and my students did the vast majority of the work for that one symposium), I decided to share some of my thoughts here.  Hopefully, these thoughts are helpful, though there may be nothing new for the seasoned conference goer and planner.  Feel free to leave comments to fill in the gaps I leave or to offer your own opinions.   

Start Planning Early.  We started planning our October symposium in late-February/early-March.  That timing worked well for us.  Professors were finished with (or putting the last touches on) their spring articles, but not quite in exam-scramble mode yet.  Initially, I thought we were planning much too early, but soon realized that some of our targeted speakers were already “mostly full” for the fall, and starting any later would have been problematic. 

Seek a Variety of Views.  A good conference, in my opinion, includes speakers with a variety of views.  UCLA’s Micro-Symposium on Competing Theories of Corporate Governance and the Conglomerate’s online symposium on Hobby Lobby are two excellent, recent examples.  There is some benefit of having conferences where the speakers are all in the same area (with different opinions), but I have also benefited from conferences that seek to bring academics from various disciplines together and from conferences that include both practitioners and academics.

Double-Check the Technical.  A surprising number of conferences start with, or include, technical issues.  If you are planning the conference, plan to test the technical side before the conference begins and try to get the presenters to send you any slides beforehand. 

Engage the Audience.  Plenty of conferences I have attended spend the vast majority of time on the presentations and leave little time for Q&A.  Generally, the audiences of academic conferences are pretty sophisticated academics and practitioners.  The questions (as long as they aren’t of the self-aggrandizing variety, see this comic from Professor Anne Tucker) can make the conference more engaging, can highlight the difficult issues, and can challenge the presenters.  At a recent conference at Belmont University, they collected written questions from the audience, and the moderator chose the best, most relevant questions to ask.  This process made the Q&A time more efficient than taking the microphone through the crowd to each audience member and made sure that the questions were not overly long and were of high quality.  If possible, you might also want to consider setting up the conference space with round tables and allow the audience to discuss the presentations at their tables, perhaps with the aid of a table host and starter questions.  This way many more people get to speak.  I have seen the table discussions done extremely well a few times, most recently at a dinner presentation following this University of St. Thomas conference.  If the attendees are involved, they generally have a better time and take away more from the experience. 

Build in Extra Time and Breaks.  Conferences almost never run exactly according to schedule and almost always seem to run long.  While you can warn the presenters that you plan to stick to a strict time-line, presenters almost always go a few extra minutes over the allotted time.  If you can, build in some extra time.  If you want 30 minutes for Q&A, give yourself 40 minutes so that the presenters can go a bit long and not eat through much of the Q&A time.  Also, build in some breaks in the conference.  Attention spans seem to be getting shorter and attendees usually attend conferences, at least in part, to network.  Breaks give them a chance to meet other attendees.  Be warned, however, that it is sometimes difficult to corral the audience back into the presentation space.   

Anyway, those are just some of my thoughts.  Again, I welcome readers to add comments.    

Last week I had the pleasure of speaking on a panel on global human rights compliance and enterprise risk management with Mark Nordstrom of General Electric and John Sherman of Shift. The panel was part of a conference entitled New Challenges in Risk Management and Compliance at the UConn School of Law Insurance Law Center. 

I spoke about the lack of direct human rights obligations under international law for multinationals, the various voluntary initiatives such as the Universal Declaration of Human Rights, the ILO Tripartite Declaration, the UN Global Compact, ISO 26000, the OECD Guidelines for Multinational Enterprises, the Global Reporting Initiative, and accusations of bluewashing. I also discussed Dodd-Frank 1502 (conflict minerals), sustainable stock exchange indices, ESG reporting, SEC proxy disclosure on risk management oversight, socially responsible investors, and the roles of the Sustainability Accounting Standards Board and the International Integrated Reporting Council in spurring transparency and integrated reporting. 

Sherman focused on the UN Guiding Principles on Business and Human Rights, which were unanimously endorsed by the UN Human Rights Council in 2011 and which contain three pillars, namely the state duty to protect people from human rights abuses by third parties, including business; business’ responsibility to respect human rights, which means avoid infringing on the rights of 
others and addressing negative impacts with which a business is involved; and the need for greater access to effective remedy for victims of corporate-related abuse, both judicial 
and non-judicial.

He pointed out that American Bar Association endorsed the Guiding Principles in 2011 concluding that under Model Rule 2.1 of the ABA Rules of Professional Conduct, a lawyer’s obligation to provide independent and candid legal advice includes the responsibility to go beyond the black letter of the law, and to advise the client on moral, economic, and social and political standards that can affect the lawyer’s advice. This includes the impact of the Guiding Principles when relevant. An advisory group to the Law Society for England and Wales has made even stronger recommendations. Sherman is chairing a working group of the International Bar Association that is developing guidance for bar associations around the world on the Guiding Principles. He observed that Marty Lipton of Wachtel Lipton, has strongly endorsed the Guiding Principles as a “balanced and prudent process for corporations to manage their human rights risks.” Firms such GE, Total, and Coca Cola have met to discuss how their in house counsel can implement the Guiding Principles. Interestingly, Nordtsrom from GE relayed a troubling example of a human rights dilemma in which one of their medical devices was used in China for sex selection purposes rather than for the life saving purposes for which it was intended.

A number of businesses around the world have adopted these voluntary Guiding Principles, but in 2013 Halliburton, McDonalds and Caterpillar faced shareholder proposals based on them. The Guiding Principles have influenced the Dodd-Frank conflict minerals legislation; the US regulations requiring companies investing more than $500,000 of new money in Myanmar to report on their human rights policies and due diligence; the European Commission’s 2011 recommendation that all EU countries develop their own National Action Plans to implement the Guiding Principles; the European Union’s Parliament recent directive in April 2014 requiring close to 6,000 companies in the EU to disclose their environmental, social and human rights policies including their due diligence processes, outcomes, and principles risks; the proposed Canadian conflicts minerals legislation; ISO 26000; and the OECD Guidelines for Multinational Enterprises.

Although I now teach business associations and civil procedure, I used to teach a seminar in corporate governance, compliance and corporate social responsibility and found that my students really enjoyed the discussions on human rights and enterprise risk management. Some of the sessions I attended in Geneva on Business and Human Rights at the UN  in Decemeber were led by lawyers from around the world who were already advising large and small businesses about the Guiding Principles and how to respond to the numerous comply or explain regimes around the world that are asking about environmental, social and governance factors. 

Earlier this week, I sat in on a webinar on the role of the board in overseeing sustainability issues, including human rights, which I will write about next week. There isn’t enough time to address these kinds of issues in a traditional business associations course, but as the ABA and Marty Lipton pointed out, the time is coming for attorneys to counsel their clients on these risks. This means that we as business professors need to prepare our students for this new world. 

The NBA’s handling of what the NBA concluded was Donald Sterling’s now-infamous, racist-language-laden phone call with V. Stiviano has generated a lot of commentary (including my own).  As one might expect, the incident has led to some oft-repeated assertions that are not quite right.  So, in taking a break from my grading, I thought I’d deal with a couple of those issues right now. 

To start, if Sterling is forced to sell the Clippers, the NBA and the other team owners are not “taking” anything away from him that he has a right to keep.  He is an owner subject to an agreement that, according to NBA Commissioner Adam Silver, allows the league to force Sterling to sell upon a three-fourths vote of other league owners.  As such, the league has, and has always had, the power to decide if Sterling would be allowed to own a team.  (Why the league owners didn’t act twenty years ago is a legitimate question, but one for another day.)

 That Sterling can be forced to sell should not be news to lawyers, at any rate.  This case reminds me of Lawlis v. Kightlinger & Gray, 562 N.E.2d 435 (Ind. App. 4th Dist. 1990). The case is taught in many Business Organizations courses. In that case, Lawlis was a partner the Kightlinger & Gray law firm. At some point, his alcoholism became a problem, and eventually he told the partners of his issues. Lawlis and his partners reached an agreement about how to move forward (one with a “no-second chances” provision).  Lawlis got things together for a bit, then returned to drinking, and he was given a second chance.  Lawlis apparently got sober and eventually insisted the firm should increase his partnership participation.  Instead, the firm decided to expel him by a 7-to-1 vote (Lawlis was the sole vote against expulsion).  Lawlis sued. 

The court was not convinced, and I would hope any court would look the same way at a vote to remove Sterling as an NBA owner. Even if they needed cause, I would opine that the league has it, but the likely don’t need it.  The Lawlis court explained: 

All the parties involved in this litigation were legally competent and consenting adults well educated in the law who initially dealt at arm’s length while negotiating the . . .  agreements here involved. At the time the partners negotiated their contract, it is apparent they believed . . . the “guillotine method” of involuntary severance, that is, no notice or hearing, only a severance vote to terminate a partner involuntarily need be taken, would be in the best interests of the partnership. Their intent was to provide a simple, practical, and above all, a speedy method of separating a partner from the firm, if that ever became necessary for any reason. We find no fault with that approach to severance.

 Where the remaining partners in a firm deem it necessary to expel a partner under a no cause expulsion clause in a partnership agreement freely negotiated and entered into, the expelling partners act in “good faith” regardless of motivation if that act does not cause a wrongful withholding of money or property legally due the expelled partner at the time he is expelled.

Lawlis,562 N.E.2d at 442-43.

Some have lamented that Sterling will still be a rich man from this, no matter what.  That is true, and the NBA has no way to change that.  Sterling must be properly compensated if he were forced to sell the team. But that’s the point.  In America, Sterling (like anyone else) is permitted (within the bounds of the law) to say racist and misogynist things and be a generally awful person without anyone taking away property.  On the other hand, it appears Sterling agreed to buy a team in a league with an agreement that has a guillotine clause that allows the league to force him to sell.  So be it.

Here are five other related points worth noting (at least, I think so), even if they are not as business-law focused. Click below for more.

Continue Reading NBA Owner’s Rights, A Sterling Guillotine, Stock for All Clippers & Other Thoughts

Felix Chang, at the University Of Cincinnati College Of Law, recently posted a draft of his excellent paper, The Systemic Risk Paradox: Banks and Clearinghouses Under Regulation.  The paper will be published in the Columbia Business Law Review (congrats Felix!) in the fall.  I first read Felix’s paper in conjunction with the George Washington University C-Leaf Junior Scholar workshop earlier this spring. After the workshop, I asked him to let me know when a draft was ready to share with BLPB readers, and here is the Abstract:

Consolidation in the financial industry threatens competition and increases systemic risk. Recently, banks have seen both high-profile mergers and spectacular failures, prompting a flurry of regulatory responses. Yet consolidation has not been as closely scrutinized for clearinghouses, which facilitate trading in securities and derivatives products. These nonbank intermediaries can be thought of as middlemen who collect deposits to ensure that each buyer and seller has the wherewithal to uphold its end of the deal. Clearinghouses mitigate the credit risks that buyers and sellers would face if they dealt directly with each other. 

Yet here lies the dilemma: large clearinghouses reduce credit risk, but they heighten systemic risk since the collapse of one such entity threatens the entire financial system. While the systemic risks posed by large banks have been tackled by regulators, the systemic risks of these nonbank intermediaries have received less attention. In fact, clearinghouses have been cloaked with a regulatory mantle which encourages unchecked growth. 

This Article examines the paradoxical treatment of regulators toward the systemic risks of clearinghouses and banks. It explores two fundamental questions: Why does the paradox exist, and who benefits from it? Borrowing from antitrust, this Article offers a framework for ensuring that the entities which control a large clearinghouse (the big banks) do not abuse its market dominance.

-Anne Tucker

My wife claims that I wasted quite a bit of time watching the Breaking Bad TV series on Netflix over the past few months, but given this recent call for papers, I may claim I was just doing professional development.

The editorial board New Mexico Law Review does not list any business law topics in their areas of particular interest, but I can think of a few.  Accounting fraud and money laundering feature prominently.  The IRS is involved in some episodes.  Magrigal (a global conglomerate), Los Pollos Hermanos (a restaurant chain), and A1A car wash (which becomes a family-owned business) are three businesses that take center stage.  There is a sale of a company (the car wash) in one episode and possible fiduciary duty issues throughout.  I may even see a benefit corporation angle to explore…

This is a fun idea for a special law review issue.