Monday, September 1, 2014

More on Cunningham's Berkshire Beyond Buffett

Larry Cunningham has a further post on his forthcoming book, Berkshire Beyond Buffett: The Enduring Value of Values, over at Concurring Opinions.  The post includes an excerpt from Chapter 8 of the book, Autonomy, and links to the full text of the chapter, available on SSRN for free (!) download.  Larry's and my earlier posts on the book here on the BLPB can be found herehere, here, and here.

Here's a slice of the excerpt included in the Concurring Opinions post:

. . . Berkshire corporate policy strikes a balance between autonomy and authority. Buffett issues written instructions every two years that reflect the balance. The missive states the mandates Berkshire places on subsidiary CEOs: (1) guard Berkshire’s reputation; (2) report bad news early; (3) confer about post-retirement benefit changes and large capital expenditures (including acquisitions, which are encouraged); (4) adopt a fifty-year time horizon; (5) refer any opportunities for a Berkshire acquisition to Omaha; and (6) submit written successor recommendations. Otherwise, Berkshire stresses that managers were chosen because of their excellence and are urged to act on that excellence. 

Cool stuff . . . .

September 1, 2014 in Business Associations, Books, Corporate Governance, Corporations, Current Affairs, Joan Heminway, Weblogs | Permalink | Comments (0)

Monday, August 11, 2014

The Emergency Sasquatch Ordinance

One of the blogs in last week’s list of blogs I follow was Lowering the Bar, a collection of humorous legal items edited by Kevin Underhill, a San Francisco lawyer.

Underhill recently released a book, The Emergency Sasquatch Ordinance. The book is a collection of silly, weird, and humorous laws, with commentary by Underhill. The title comes from an ordinance adopted by the board of commissioners of Skamania County, Washington that made it illegal to slay Bigfoot. Apparently, the threat was serious because the county commissioners designated it as an emergency ordinance so it could become immediately effective.

Both Underhill’s selection of laws and his commentary are a little uneven. Some of the laws he features are not that interesting (or funny). And Underhill’s commentary on the laws, while often quite funny, sometimes falls flat. I also wish Underhill would have provided more legislative history. He sometimes does, but not always, and it would be interesting to know what motivated some of these strange laws. But the book contains some real gems, and that alone makes it worth reading.

Some of the laws are funny because of their clear unconstitutionality. In 2011, for example, the Gould, Arkansas city council passed a law that (1) requires city council approval for the mayor or council members to participate in a meeting of any organization; (2) bans the Gould Citizens Advisory Council from doing business in the city; and (3) requires city council approval for any new organization in the city.

Some of them are just weird. A California law, for example, provides that

It is unlawful for any person to immerse or soak the carcass of any slaughtered rabbit in water for a period longer than necessary to eliminate the natural animal heat in the carcass and in no event for a period longer than 2 ½ hours.

Many of them make you wonder whether the legislative body didn’t have more important things to do. One Arkansas law, for instance, specifies how to pronounce Arkansas and another specifies the possessive form of Arkansas. (In case you were wondering, it’s pronounced “By Texas” and the possessive form is “Our’n.”) A Massachusetts statute that I’m sure my wife the law librarian will love makes it illegal to disturb people in a public library by making noise.

But my favorite law from the Underhill book confirms my view of tax law and tax lawyers. According to an Australian law, the tax commissioner may

  • Treat a particular event that actually happened as not having happened;
  • Treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as having happened at a particular time and having involved particular action by a particular entity; or
  • Treat a particular event that actually happened as having happened at a time different from the time it actually happened, or having involved particular action by a particular entity (whether or not the event actually involved any action by that entity).

The Emergency Sasquatch Ordinance is an easy read and each law is in a separate chapter, so it’s easy to pick and choose. It’s worth a look.

August 11, 2014 in Books, C. Steven Bradford | Permalink | Comments (0)

Friday, August 8, 2014

What's in Your Suitcase?

Maybe having a suitcase that has more books in it than clothes is a sign that I need to follow Steve Bradford's lead and get an e-reader.

This week I am in Seattle for the 2014 ALSB conference, which I may blog about when I return.  In my suitcase, in addition to a few clothes, are:

Some of these, like Bainbridge, Klein, and O'Hara's books, I have already read, but I thought they would be worth revisiting while I wait on some new books I recently ordered.  

August 8, 2014 in Business Associations, Books, Haskell Murray | Permalink | Comments (5)

Tuesday, August 5, 2014

Random, Non-Business Summer Reading: A Walk in the Woods

This doesn't have a lot to do with Business Law, though I would submit there's a lot to be learned from reading outside the field.  Now that I live in West Virginia, and my wife suggested I read it, I propose: Bill BrysonA Walk in the Woods: Rediscovering America on the Appalachian Trail, which seemed appropriate for a summer read.  She was right.  So far, it's great.  I recommend it, and to support my claim, here's a few quotes to tease you: 

“I know a man who drives 600 yards to work. I know a woman who gets in her car to go a quarter of a mile to a college gymnasium to walk on a treadmill, then complains passionately about the difficulty of finding a parking space. When I asked her once why she didn't walk to the gym and do five minutes less on the treadmill, she looked at me as if I were being willfully provocative. 'Because I have a program for the treadmill,' she explained. 'It records my distance and speed, and I can adjust it for degree of difficulty.' It hadn't occurred to me how thoughtlessly deficient nature is in this regard.” 
....

“Black bears rarely attack. But here's the thing. Sometimes they do. All bears are agile, cunning and immensely strong, and they are always hungry. If they want to kill you and eat you, they can, and pretty much whenever they want. That doesn't happen often, but - and here is the absolutely salient point - once would be enough.” 

Happy reading!

August 5, 2014 in Books, Joshua P. Fershee | Permalink | Comments (0)

Friday, July 25, 2014

Welcome to the "Blawgosphere" Eric Orts

We welcome Eric Orts (Wharton) to the "blawgosphere."  Professor Orts has begun blogging at Ortsian Thoughts and Theories. I have already added his blog to my favorites, and I am sure I will become a regular reader.  His new book, Business Persons: A Legal Theory of the Firm should be in my mailbox soon, and I am looking forward to reading it as well. (H/T David Zaring at the Conglomerate).     

July 25, 2014 in Business Associations, Books, Corporate Governance, Haskell Murray | Permalink | Comments (0)

Summer Reading - All Over But the Shoutin'

One of my younger brothers is a PHD Candidate in Literature at University of Alabama.  One of my younger sisters majored in English at the University of Georgia and is working in the media industry.  (Yes, I am a proud older brother, prone to brag about my siblings' many accomplishments).

Both siblings recently encouraged me to expand my summer reading beyond books about law.  Due to the tall stack of legal books in my "need to read" pile, I usually don’t devote much time to "pleasure reading."

This summer, however, I am trying to read legal books and, at least some books, which have no noticeable connection to law.  Rick Bragg’s All Over But the Shoutin’ falls into the latter category.  I will let interested readers follow the link for a description of the book, but I only mention it here to say that Bragg writes beautifully.   I finished the 329-page book in two, long, sittings. 

Writer Pat Conroy said the following of the book and its author:

Rick Bragg writes like a man on fire.  And All Over But the Shoutin' is a work of art. I thought of Melville, I thought of Faulkner. Because I love the English language, I knew I was reading one of the best books I've ever read.

My English-major sister recently used that phrase – “because I love the English language” – but in a different, law-related context.  She told me that reading her employment contract made her cry, because she loves the English language.  Presumably, the attorney managed to draft a contract that was painful to read. 

Likewise, most of us in legal academia can slip into what Steve Bradford recently called “the usual turgid law-review prose.”  Reading Bragg’s book has inspired me to strive for writing that is both clear and engaging. 

Bragg

July 25, 2014 in Books, Haskell Murray | Permalink | Comments (0)

Tuesday, July 22, 2014

Berkshire 2.0

Amazon BBB Book Cover
You may think of Warren Buffett as a savvy stock picker but his greater accomplishment is in configuring an exceptionally strong corporation that defies widespread conceptions of effective corproate governance.  

Since early in his career, Buffett adopted what he calls the double-barreled approach to capital allocation, meaning both stock picking and business buying. He gained prominence primarily as an investor in stocks, championing a contrarian investment philosophy.

Attracting three generations of devoted followers to a school of thought called “value investing,” he doubted the market’s efficiency and deftly exploited it. Buffett bought stocks of good companies at a fair price, assembling a concentrated portfolio of large stakes in a small number of firms. Today, nearly three-fourths of Berkshire’s stock portfolio consists of just seven stocks.     

But late in his career, beginning around 2000, Buffett shot more often through the other half of his double-barreled approach: buying 100 percent of companies run by trusted managers given great autonomy. True, Berkshire early on bought all the stock of companies such as Buffalo News and See’s Candies. But, through the 1990s, the first barrel dominated, with Berkshire consisting 80 percent of stocks and 20 percent owned companies. That mix gradually reversed and recently flipped, making subsidiary ownership the defining characteristic of today’s Berkshire.

Owning primarily subsidiaries rather than merely stocks gives Berkshire a different shape compared to its previous character as the holding company of a famed investor. After all, even for a buy-and-hold investor, stocks come and go. Berkshire has sold the stocks of many once-fine companies, including Freddie Mac, McDonald’s, and The Walt Disney Company.

In contrast, aside from a few Berkshire subsidiaries that it acquired from the Buffett Partnership in the 1970s, Berkshire has never sold a subsidiary and vows to retain them through thick and thin.  Despite their variety, moreover, Berkshire companies are remarkably similar when it comes to corporate culture, which is the central discovery I document and elaborate in my upcoming book, Berkshire Beyond Buffett: The Enduring Value of Values.

When Berkshire consisted mostly of the stock portfolio of a famed stock picker, you could expect that, once that investor departed, the portfolio would naturally be unwound and the company dissolved. Now, however, with Berkshire made of companies not stocks, its life expectancy stretches out in multiple decades, not mere years. It certainly goes beyond the stock picker who founded it.  That's not an accident either, as the dominant cultural motif at Berkshire and its subsidiaries is a sense of permanence--the longest possible time horizon imaginable.   

Continue reading

July 22, 2014 in Business Associations, Books, Corporate Governance, Corporations, Current Affairs, Merger & Acquisitions | Permalink | Comments (2)

Monday, July 21, 2014

Q & A With Larry Cunningham (Guesting With BLPB This Week)

As I promised on Friday, I am posting a question and answer segment with Larry Cunningham, author of the forthcoming book: Berkshire Beyond Buffett: The Enduring Value of Values.  Larry will be guest blogging with us this week to talk more about the interesting findings he shares in the book and their implications for business and the research, teaching, and practice of business law.

Q:  Why did you write this book and what did you find?

A:  Widespread praise for Warren Buffett has become paradoxical: Buffett set out to build a permanent institution at Berkshire Hathaway and yet even great admirers, such as Steven Davidoff, doubt that the company can survive without him. I found that viewpoint intriguing since companies who are identified with iconic founders often have trouble after a succession, as Tom Lin has written.  I wanted to investigate how the situation will look for Berkshire after Buffett leaves the scene, collapse and breakup or prosperity coupled with continued expansion? What I found was a culture so distinctive and strong, that the company’s future is bright well beyond Buffett.

Q:  How did you reach that conclusion?  What was your research method?

A:  I focused on Berkshire’s fifty operating subsidiaries, which define the company today, representing 80 percent of its value. Incidentally, that is a flip from decades passed, when 80 percent of Berkshire’s value resided in minority stock investments. I began with Buffett’s historical statements about those subsidiaries and Berkshire’s corporate culture, research that in some ways dates to the 1997 Cardozo Law Review symposium I hosted on Buffett’s shareholder letters, which developed into my book, The Essays of Warren Buffett: Lessons for Corporate America. Still, for this project, focusing on the subsidiaries, I gathered and studied specific information about each—biographies, autobiographies, research reports, encyclopedic entries, press releases, public filings.  Then, with Buffett’s permission, I surveyed all current Berkshire subsidiary chief executives and interviewed many, along with former managers and large shareholders of subsidiaries. In addition, I surveyed a large number of Berkshire shareholders to gain additional insight and to make sure I was asking the right questions.

Q:  What culture did you find, what common traits do the subsidiaries share?

A:   That’s the striking discovery. As I profiled each subsidiary, a pattern emerged in which the same traits began to appear repeatedly, nine altogether, including budget-consciousness, earnestness, kinship, entrepreneurship, autonomy, and a sense of permanence. Not every subsidiary had all nine, but many did, and the vast majority manifested at least five or six of the nine.  A portrait of Berkshire culture crystalized, one that is distinctive and durable.  And that culture, I argue in the book, will allow the company to thrive even after Buffett’s departure.

The discovery is suggested by the book’s subtitle: The Enduring Value of Values. “Value of values” refers to how the traits that bind Berkshire’s subsidiaries all share a common feature: all are intangible virtues that managers transform into economic gain. The most general manifestation of the “value of values” occurs in business acquisitions when the exchange of economic values measured using traditional standards leaves a wide gap—a price higher or lower than economic value.

A salient example from Berkshire’s history concerns Bill Child, patriarch of his family home furnishings company, RC Willey. He sold the company to Berkshire for $175 million, declining rival offers as high as $200 million. Why? Because his family valued the managerial autonomy and sense of permanence that define Berkshire culture. 

The book contains more than one hundred examples of myriad ways that Berkshire subsidiaries translate intangible qualities into economic value, whether in research & development, customer service, employee compensation and benefits, corporate finance, or internal policies and practices.  

Q:  What makes the value of values enduring?  

A:  By reaping returns on capital from intangible virtues, Berkshire practices a philosophy of capitalism that does well by doing good, is sensitive but unsentimental, lofty yet pragmatic, and public-spirited but profitable.  This attitude is neither altruistic nor moralistic, but practical, economic, and long-term. It’s a way of doing business that matches today’s zeitgeist, with its sense of stewardship and fair play, and also has a timeless horizon, as business leaders from Robert Mondavi to John Mackey of Whole Foods champion variations on these themes.

Q:  What is the audience for the book?

A:  Everyone involved in shaping American business: managers, entrepreneurs, owners, shareholders, directors, policymakers, scholars of corporate stewardship—and business lawyers and business law professors, of course. It’s a broad audience because Berkshire’s approach is distinctive but not inimitable and valuable yet underappreciated.

Q:  What surprises did you find?

A:  Many, mostly concerning the various subsidiaries, but several rising to the level of Buffett and Berkshire. As a recent headline in USA Today put it, “New Book Rewrites Buffett Legacy in Three Ways.”  The book explains why Buffett’s place in American history is even more significant than currently assumed. Besides being a “legendary investor,” as he is often identified by journalists, Buffett has built a formidable corporation, demonstrated unsung managerial prowess, and chartered a course for American capitalism that widens the meaning of “value investing.”

While everyone knows that Buffett owes a lot to Ben Graham, his investments teacher at Columbia Business School, this book also makes clear his debt on the management side to Tom Murphy, the legendary corporate icon and head of ABC who is now a Berkshire director.  When I asked Buffett who should write the foreword to this book, he instantly suggested Tom, and I’m grateful that Tom accepted the invitation—his foreword alone is worth the price of the book!

Q:  Care to give us a thumbnail sketch of the book’s outline?

A:  Sure. The opening chapters cover Berkshire’s origins and foundations, with surprises even for those most familiar with this terrain, including rich connections between Berkshire’s early acquisitions and the conglomerate today. While Berkshire appears vast, diverse, and sprawling, this synthesis of corporate culture shows instead a close-knit organization linked by discrete values. 

The middle chapters, the heart of the book, take a series of deep dives into fifty Berkshire subsidiaries to illuminate each of the traits and how they give Berkshire its identity and destiny. I was delighted that, when circulating the manuscript for comment among Berkshire devotees, even the most avid readers found new facts, fresh insights, and a whole new way of thinking not only about Berkshire but about Buffett. 

The closing chapters reflect on what Berkshire’s corporate culture means for Buffett’s legacy. They explore the elaborate succession plan at Berkshire, which most people misunderstand, and identify challenges Berkshire will face. I also draw specific lessons for investors, managers, and entrepreneurs who can benefit from Berkshire’s distinctive approach—lessons that business lawyers and policymakers will want to learn as well.

Q:  Can Berkshire Beyond Buffett be assigned for any university classes?

A:  Yes, and I think it will be a good companion to The Essays of Warren Buffett, which has been adopted at many law and business schools for courses on corporate governance, investments (portfolio management), and mergers & acquisitions. This book would suit those courses as well as courses in business ethics and corporate social responsibility. I am planning a seminar next spring in which these two books will be on the reading list, along with other contemporary books offering fresh examinations of venerable themes, such as Eric Orts’ Business Persons;  Lynn Stout’s Shareholder Value Myth; or Curtis Milhaupt & Katharine Pistor’s Law & Capitalism.

Q:  Berkshire Beyond Buffett appears to be full of lessons and important principles.  Which do you propose to explore for us during the coming week?

A:  I’m looking forward to sharing insights on topics such as corporate governance, corporate purpose, and succession planning.  Among the book’s many lessons, these will likely be of greatest interest to readers of the Business Law Prof Blog, and I thank you for the opportunity to introduce the book and these themes here this week.

Q:  Thanks so much, Larry.  Those certainly are all topics that interest me (and infuse my ongoing scholarship and teaching).  I look forward to your posts this week.

A:  You're welcome.  I am grateful for the opportunity to share what I have learned.

July 21, 2014 in Business Associations, Books, Business School, Corporate Governance, Current Affairs, Entrepreneurship | Permalink | Comments (0)

Friday, July 18, 2014

Next Week: Larry Cunningham on Warren Buffett and Succession Planning!

The Business Law Prof Blog is delighted to have as a guest blogger next week our friend and colleague Lawrence A. Cunningham (known to me as Larry!), of George Washington University Law School, who has just finished writing a new book being released in October called Berkshire Beyond Buffett: The Enduring Value of Values.  He will offer a few posts about aspects of the book during the week. We will kick it off Monday with some questions and answers.   

Larry is the Henry St. George Tucker III Research Professor at GW.  He teaches accounting, contracts, and corporate governance and has written extensively in all those areas.  He previously taught at Boston College Law School, where he served a term as Academic Dean, and Cardozo Law School, where he directed the Samuel and Ronnie Heyman Center on Corporate Governance.

Among his most cited articles are these scholarly jewels:

A Prescription to Retire the Rhetoric of “Principles-Based Systems” in Corporate Law, Securities Regulation and Accounting (Vanderbilt Law Review, 2007)

The Sarbanes-Oxley Yawn Heavy Rhetoric, Light Reform (And it Might Just Work) (Connecticut Law Review, 2003)

From Random Walks to Chaotic Crashes: The Linear Genealogy of the Efficient Capital Market Hypothesis (GW Law Review, 1994)

All are great reads.  Among his most notable books other than Berkshire Beyond Buffett (which is sure to be a hit!) are the following:

The Essays of Warren Buffett: Lessons for Corporate America  (self-published and distributed by Carolina Academic Press, 3d ed. 2013)

Contracts in the Real World: Stories of Popular Contracts and Why They Matter (Cambridge University Press, 2012)

Berkshire Beyond Buffett is now in the production and pre-ordering phase, garnering early attention among readers in both the investing and corporate governance communities, including: The Motley Fool (which also posted a written interview and video interviews here, here, here, and here);  BeyondProxy; and USA Today.  We look forward to our Q&A with Larry next week followed by his posts!

July 18, 2014 in Business Associations, Books, Corporate Governance, Corporations, Current Affairs | Permalink | Comments (0)

Sunday, July 13, 2014

ICYMI: Tweets From the Week (July 13, 2014) [Hobby Lobby Edition]

July 13, 2014 in Business Associations, Books, Constitutional Law, Corporate Governance, Corporations, Current Affairs, Religion, Stefan J. Padfield | Permalink | Comments (0)

Thursday, July 10, 2014

What can lawyers, professors and students learn from a corporate idealist?

In last week’s post about the business of the World Cup, I indicated that I would review Christine Bader’s book, The Evolution of a Corporate Idealist: When Girl Meets Oil. I have changed my mind, largely because I don’t have much to add to the great reviews the book has already received. Instead I would like to talk about how lawyers, professors and students can use the advice, even if they have no desire to do corporate social responsibility work as Bader did, or worse, they think CSR and signing on to voluntary UN initiatives is really a form of "bluewashing."

Bader earned an MBA and worked around the world on BP’s behalf on human rights initiatives. This role required her to work with indigenous peoples, government officials and her peers within BP convincing them of the merits of considering the human rights, social, and environmental impacts. She then worked with the UN and John Ruggie helping to develop the UN Guiding Principles on Business and Human Rights, a set of guidelines which outline the state duty to protect human rights, the corporate duty to respect human rights, and both the state and corporations' duty to provide judicial and non-judicial remedies to aggrieved parties. She now works as a lecturer at Columbia University, where she teaches human rights and business and she also advises BSR, which focuses on making businesses more sustainable. Her book tells her story but also quotes a number of other CSR professionals and how they have navigated through some of the world’s largest multinationals.

 Bader’s book has some important takeaways for all of us.

1)   In order to have influence, we have to learn to speak the language that our audience understands and appreciates- I tell my students that when they write exams for me, it’s all about me. Other professors want their exams written with certain catchphrases using the IRAC method, and I may want something different. One size does not fit all. Attorneys learn (or get replaced) that some clients want long memos, others want executive summaries and bullet points and all want plain English. Talking to a venture capitalist is different than talking to a circuit court judge. Similarly, many law professors are behind the curve. If we only talk to each other in the jargon of the academy and insulate ourselves, the rest of the world won’t have the benefit of our research because they won’t understand or want to read it. Academics have a lot to contribute, but we need to adapt to our audience whether it’s policymakers, judges, our peers or law students.

 2)   Sometimes we have to be less passionate in making our arguments and appeal to what’s important to our audience- This point relates to Point 1. Bader regularly met with a number of constituencies and was understandably zealous in trying to convince others, internally and externally, about her positions. She and other “corporate idealists” from other firms often learned the importance of language- making a business case to certain internal stakeholders meant talking in terms of the bottom line rather than using the maxim “it’s the right thing to do” or “doing well by doing good.” Good attorneys know how to represent their clients without taking things personally because sometimes the passion can actually dilute effectiveness. As law professors, we need to teach our students to be more effective so that they know how and when to modulate their tone, and how to pivot and change the way they frame their arguments when they can’t convince the recipient of their message.

3)   Almost everything comes down to risk management- Bader often had to focus on risk management and mitigation when her moral arguments fell on deaf ears. Those who teach business should make sure that students have a basic understanding of the pressure points that business people face. For some it may be tax liability. For others it may be the appropriate exit strategy. In essence, it all comes down to understanding the client’s risk profile and being able to advise accordingly. Litigators should also understand risk profiles so that they can develop an appropriate settlement strategy and help their client’s work their way through some of the unexpected pitfalls that may arise over the course of the case.

4)   Building relationships is a critical skill- Bader learned that social interactions with her peers at BP and the external stakeholders after hours greatly increased her effectiveness in dealing with thorny issues that arose during business hours. Lawyers often believe that if they have the substantive knowledge, they are the smartest people in the room. Law firms don’t teach young associates about the importance of emotional intelligence and building relationships with peers, opposing counsel, and clients. In fact, many law students and lawyers believe that having the reputation as a “shark” is the best way to represent clients. We need to teach our students that it’s better to be respected than feared or hated, and that they can disagree without being disagreeable. Those of us in the academy should model that behavior more often.

5) We must learn to compromise and recognize that incremental changes are important too- Bader and other corporate idealists often want to change the world but quickly learn that internal and external stakeholders aren’t ready to move that fast. She discussed “nudging” her client toward the right direction. Law school and law-related television shows lead students to believe that the end game is to win and to win big. In the business world, sometimes there are no big wins. Lawyers and business advisors often take two steps forward and one step back, and that’s ok. Students and attorneys who take classes in alternative dispute resolution learn this valuable skill. Bader and other corporate idealists also realized that you have to work with people on the opposite side who feel just as strongly that their position is on the side of the angels. Lawyers who know how to build relationships and refocus their messaging can influence those on the other side if they are willing to listen, and when necessary compromise and accept small victories.

6)   We can compromise but shouldn’t compromise our values- When Bader felt that her work was no longer fulfilling, she looked for other positions that aligned with her world view. With rising student debt and many lawyers living beyond their means, it’s difficult for lawyers to walk away from a job or client that they don’t like. That’s understandable. It’s more problematic to stay in a situation where there is criminal or ethical misconduct without speaking up or leaving because of the financial handcuffs.  It’s also unacceptable to remain in a culture that stifles a lawyer’s ability to raise issues. In some cases, as alleged with some of the GM lawyers, failure to speak up could literally be a matter of life and death.

I enjoyed this quick read because it reminded me so much of my years in corporate life. Bader’s story can teach all of us, even the non corporate-idealists, valuable lessons about coping and thriving in the business world.

 

July 10, 2014 in Business Associations, Books, Corporate Governance, Corporations, Current Affairs, Ethics, Law School, Marcia Narine, Negotiation, Teaching | Permalink | Comments (0)

Saturday, July 5, 2014

Dimon and Disclosure

The blogosphere has been a-twitter with commentary on Jamie Dimon's revelation earlier this week that he has throat cancer and will be undergoing treatments in the hope of eradicating it.  From the public news, his prognosis sounds good.  For that, I am sure all are grateful.

As some of you may know, my interest in issues relating to disclosures of facts from executives' private lives stems from my fascination, starting about 12 years ago, with the Martha Stewart disclosure cases (about which I wrote in law journals and in several chapters of a book that I edited).  After co-writing the book about the basic concerns in Stewart's insider trading, misstatements/omissions securities fraud, and derivative fiduciary duty actions, I focused in additional articles on some finer points relating to her case.  Two of these works covered the disclosure of private facts.  Among the types of private facts covered are those relating to executive health concerns.

Continue reading

July 5, 2014 in Business Associations, Books, Current Affairs, Joan Heminway, Securities Regulation | Permalink | Comments (0)

Friday, June 27, 2014

Easterly on The Tyranny of Experts

On Steve Bradford’s recommendation, I chose William Easterly’s (NYU) The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor (2014) as the book for my annual beach trip with the in-laws and cousins. (Last year was Daniel Kahneman's (Princeton) Thinking, Fast and Slow – and yes, my wife’s side of the family makes fun of my beach reading material).  Easterly is an author I have wanted to read for a while now, and I still need to read some of his earlier books. 

Easterly

More after the break.

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June 27, 2014 in Books, Ethics, Haskell Murray, Social Enterprise | Permalink | Comments (0)

Friday, June 20, 2014

Nussbaum on Liberty of Conscience

In various airports and airplanes over the past few weeks I read University of Chicago professor Martha Nussbaum’s (University of Chicago) book on religious equality in America entitled Liberty of Conscience (2008).  Even though this book predates the Hobby Lobby case, it addresses a number of underlying issues at play in the case. 

Liberty of Conscience

More after the break.

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June 20, 2014 in Books, Constitutional Law, Current Affairs, Haskell Murray, Religion | Permalink | Comments (0)

Wednesday, May 14, 2014

An Unlikely CEO Influenced an Unlikely Law Professor

Before I went to law school, I worked in the video game industry, first for the industry trade association, the Interactive Digital Software Association (now known as the Entertainment Software Association). From there I moved to public relations for the public relations firm Golin/Harris in Los Angeles where my work was focused on product launches for Nintendo. (This was from 1998-2000.) In those jobs, I had the chance to work with some amazing people (and clients), and the experience has served me well, even as I went on to become a lawyer and professor. 

 One of those people was the managing director of the Los Angeles Golin/Harris office when I was hired, Fred Cook, who is now the CEO of Golin/Harris.  Fred recently wrote a book that has caught the attention of the business world and is a top-25 book for corporate customers according to 800-CEO-READ.   His book is Improvise: Unconventional Career Advice from an Unlikely CEO, and it’s worth a look.

Here’s an excerpt:

People entering the business world today are a commodity. They’ve gone to the same schools, taken the same courses, read the same books, and watched the same movies. Every summer they’ve dutifully worked at internships in their chosen field in hopes of landing the perfect job the day they graduate from college.

. . . .

While a college education is a prerequisite for most jobs, a life education should also be required. School delivers information. Life delivers ideas. Ideas that drive business. Twitter was an idea. Red Bull was an idea. South Park was an idea.

When I participate on industry panels, someone in the audience always asks what attributes make for a successful employee. My fellow panelists rightly answer that they’re looking for skilled writers, articulate communicators, and aggressive self-starters. My response? I would trade ten of the above for one person with a big idea. But brilliant ideas aren’t created in a vacuum. They’re formed by the experiences we have and the people we meet.

As usual, what Fred is talking about here is broader than just business or public relations. It applies to business lawyers, and non-business lawyers, and law professors, and pretty much everyone else who has a life to live and goals for a fulfilling career.  We all have the chance to find our passion, if we’re willing to live, take chances, and find out what we are capable of doing.

 Fred’s unique path to being a CEO is rather similar to my path to becoming a law professor in that it would be reasonable to call me an “unlikely law professor.” I was a mostly terrible undergraduate student at three major universities, and I did not go to a top-14 law school. I did well in law school (and practice) and that made it such that when I went on the job market a leading business law academic told me that my candidacy was “plausible.” And so it was.  Fred is an unlikely CEO, perhaps, but he is most certainly an appropriate one.  I like to think the same is true for me in my role.

My life experiences helped me in practice and helped me get my job as a law professor, and those experiences continue to help me as a lawyer, a scholar, and a teacher.  By having had a career outside the law, I have additional experiences that inform my thinking about the law and the legal profession.  I know (among other things) what it means to hire and fire people, make media calls, and schedule caterers for huge events. Of course, lawyers can do these things, too, but it’s different as a lawyer.

Beyond that, the people you meet along the way inform you, and guide you, and help you see the kind of person you want to be.  I’m thankful for the large number of good people who have been a part of my work-life experience so far, and Fred is one of those people. I’m glad he has written a book that will share some of his insight with a much broader audience.  Check it out. 

May 14, 2014 in Books, Business School, Jobs, Joshua P. Fershee, Law School | Permalink | Comments (1) | TrackBack (0)

PrawfsBlawg Book Club: Bruner on Corporate Governance

In the comments to one of Anne Tucker's earlier posts, I mentioned that Chris Bruner's book Corporate Governance in the Common-Law World (2013 Cambridge University Press) was on my summer reading list.

Looks like I am a little late to the party.  Over at PrawfsBlawg, there is already a book club on Bruner's book with a number of excellent posts, including a few by the author.  Maybe the book club inspired demand is one of the reasons I got a letter from Cambridge University Press yesterday letting me know that my copy of Bruner's book was going to take longer to deliver than expected.

Looking forward to reading the actual book, but for now, the posts make interesting reading.   

May 14, 2014 in Business Associations, Books, Corporate Governance, Haskell Murray | Permalink | Comments (0)

Wednesday, May 7, 2014

Other People's Houses--

I am generating my summer reading list--both business and pleasure. At the top of my list is Other People's Houses, by Jennifer Taub (Vermont Law School), which will be available from Yale Press on May 27th.   The official website for the book describes the project as:

Drawing on wide-ranging experience as a corporate lawyer, investment firm counsel, and scholar of business law and financial market regulation, Taub chronicles how government officials helped bankers inflate the toxic-mortgage-backed housing bubble, then after the bubble burst ignored the plight of millions of homeowners suddenly facing foreclosure.

Focusing new light on the similarities between the savings and loan debacle of the 1980s and the financial crisis in 2008, Taub reveals that in both cases the same reckless banks, operating under different names, received government bailouts, while the same lax regulators overlooked fraud and abuse. Furthermore, in 2013 the situation is essentially unchanged. The author asserts that the 2008 crisis was not just similar to the S&L scandal, it was a severe relapse of the same underlying disease. And despite modest regulatory reforms, the disease remains uncured: top banks remain too big to manage, too big to regulate, and too big to fail.

The following are a few excepts of the book review just posted on Kirkus:

Taub's narrative recounts a couple who "innocently" purchased a Dallas-area condo and were deemed “too small to save.” "Meanwhile, all the decision-makers who, in a dizzying series of transactions, fueled the Nobelman mortgage received government support, and very few suffered negative consequences."  With "5 million homes lost to foreclosure and another 10 million still left underwater," Taub "blisters the 'legal enablers' who, by their acts or omissions, failed to corral predatory practices and wild speculation."  The review concludes that Other People's Houses is "[m]eticulously argued and guaranteed to raise the blood pressure of the average American taxpayer."

That last line is the hook--guaranteed to raise my blood pressure?  Sign me up.  

Leave a comment if you have a book, business or pleasure, that is topping your list.  I would love to start a BLPB summer reading list... 

-Anne Tucker

May 7, 2014 in Anne Tucker, Books, Corporate Finance, Corporations, Current Affairs, Financial Markets | Permalink | Comments (2)

Friday, April 4, 2014

Givers Finish Last…And First

Or at least that appears to be the thesis of Wharton professor Adam Grant’s (relatively) new book Give and Take (2013).  (Disclosure: I received a free copy from the publisher).

According to Professor Grant, giving, matching, and taking “are three fundamental styles of social interaction.”  Givers give without thought of what they will get in return; givers are generous, other-focused, and give without keeping score.  Matchers give expecting quid pro quo; matchers “believe in tit for tat…and believe in an even exchange of favors.”  Takers give expecting a positive return; takers put “their own interests ahead of others’ needs.” (pgs. 4-5). 

Grant is quick to admit that, “the lines between [giving, taking, and matching] are not hard and fast.” (pg. 5)  Most of us fall somewhere in the middle, as more exacting or less exacting "matchers."

In his book, Grant cites studies of medical students, engineers, salespeople, and others to support his thesis that the “worst performers and the best performers are givers; takers and matchers are more likely to land in the middle.” (pg. 7) (emphasis added).  (While Grant cites a number of academic studies, this book is written for a popular audience.)

If "givers" end up at both ends of the success spectrum, the key question becomes:  what distinguishes successful givers from unsuccessful givers? 

Grant claims that successful givers switch to a matching strategy when they interact with takers (to avoid becoming doormats for the takers), but the successful givers only make the switch to “generous tit for tat” not an unforgiving version of tit for tat.  Successful givers also draw appropriate boundaries.  See below for Professor Grant’s video clip on avoiding the doormat effect:

 

Grant’s thesis likely holds for professors.  I know a number of givers who have risen to the top of the professorial ranks.  I am less optimistic about large law firm partners, though I know a small handful of partners who have done well as givers.

A related Authors at Google talk by Professor Grant is below.  (Side note, I wish more companies did events like Authors at Google...and posted them for us to watch.)

     

April 4, 2014 in Books, Haskell Murray | Permalink | Comments (0)

Monday, March 24, 2014

Comprehensive Law School Bibliography

  Faculty Bib book cover

Two of the reference librarians at my school, Marcia Dority Baker and Stefanie Perlman, have compiled and published a bibliography of all the scholarship by Nebraska College of Law faculty going back to 1892: Marcia L. Dority Baker & Stefanie S. Perlman, A BIBLIOGRAPHY OF UNIVERSITY OF NEBRASKA COLLEGE OF LAW FACULTY SCHOLARSHIP 1892-2013 (2014).

I don’t know if others schools have done anything like this, but I think it’s a great idea. It’s really interesting to look at what people were writing one hundred years ago, and to consider the body of work of my current colleagues, only a couple of whom I believe were here a hundred years ago. I found the 14 pages of entries for the great legal scholar Roscoe Pound, including dozens of books, humbling.

On the domestic front, I’m happy to report that my listing is twice as long as my wife’s, although I’m not sure she will be happy to know that I reported that. I want to make it clear that she was not here a hundred years ago.

March 24, 2014 in Books, C. Steven Bradford, Law School | Permalink | Comments (0)

Monday, March 3, 2014

Book Review: Harriman vs. Hill

What happens if short sellers of stock are unable to cover because no one has any shares to sell? That’s one of the many interesting issues in the new book, Harriman vs. Hill: Wall Street’s Great Railroad War, by Larry Haeg (University of Minnesota Press 2013). Haeg details the fight between Edward Henry Harriman, supported by Jacob Schiff of the Kuhn, Loeb firm, and James J. Hill, supported by J.P. Morgan (no biographical detail needed), for control of the Northern Pacific railroad. Harriman controlled the Union Pacific railroad and Hill controlled the Great Northern and Northern Pacific railroads. When Hill and Harriman both became interested in the Burlington Northern system and Burlington Northern refused to deal with Harriman, Harriman raised the stakes a level by pursuing control of Hill’s own Northern Pacific.

I’m embarrassed to admit that I wasn’t aware of either the Northern Pacific affair or the stock market panic it caused. I had heard of the Northern Securities antitrust case that grew out of the affair; I undoubtedly encountered it in my antitrust class in law school. (Everything the late, great antitrust scholar Phil Areeda said in that class is still burned into my brain.)

I’m happy I stumbled across this book, and I think you would enjoy it as well. Harriman vs. Hill has everything needed to interest a Business Law Prof reader: short selling; insider trading; securities fraud; a stock market panic; a hostile takeover; a historical antitrust case; and, of course, J. P. Morgan. This was a hostile takeover before hostile takeovers were cool (and before tender offers even existed, so the fight was pursued solely through market and off-market purchases).

The book does have a couple of shortcomings. One is a polemic at the end of the book against the antitrust prosecution. The antitrust case was clearly a political play by Theodore Roosevelt, and Haeg may be right that the railroads’ actions were economically defensible, but his discussion is a little too one-sided for my taste. Haeg also has a tendency to put thoughts into the characters’ minds (Hill might have been thinking . . .), but he only uses the device to add factual background, so it isn’t terribly offensive. Finally, Haeg occasionally gets the legal terminology wrong. For example, he refers to the railroad holding company “that the U.S. Supreme Court narrowly declared unconstitutional,” when what he means is that the court upheld the law outlawing the holding company. He only makes legal misstatements like that a couple of times, but those errors are very grating on a lawyer reading the book.

Still, in spite of those minor flaws, this is a very good book and I highly recommend it.

March 3, 2014 in Business Associations, Books, C. Steven Bradford, Corporate Governance, Corporations, Financial Markets, Merger & Acquisitions, Securities Regulation | Permalink | Comments (0)