Monday, July 24, 2017
Hot Off the Press: Russell and Heminway on Representing the Organizational Client on Environmental Matters
My good friend and long-time mentor Irma Russell and I wrote a chapter for the recently released ABA book, Ethics and the Environment: A Lawyer's Guide. Irma also is a co-editor of the book (with Vicki Wright). In our joint contribution, the chapter entitled "Representing the Organizational Client on Environmental Matters," Irma and I cover issues involving professional responsibility, corporate governance, and environmental compliance. Guess which part was my primary responsibility . . . ?!) Covering some 37 pages of the 242-page book, the rules we cover and the observations we make are fairly wide-ranging. We hope, as we noted in our conclusion to the chapter, that we supply legal counsel representing corporations and other organizations with "foundational tools to assist them in providing advisory and advocacy-oriented services to organizational clients in the environmental law context." Irma and I received our copies last week. The book soon will be available through the ABA and other outlets.
Friday, July 21, 2017
My mother-in-law was reading the book for her job at a private elementary school, and I brought a limited number of books (due to the weight of my hardcopy books), so I read this book too. Our teaching center at Belmont University has mentioned Palmer’s work a number of times, so I was interested in the book.
Simply stated, Palmer’s thesis is that “good teaching comes from the identity and integrity of the teacher.” He defines identity as “an evolving nexus where all the forces that constitute my life converge in the mystery of self," and he defines integrity as “whatever wholeness I am able to find within that nexus as its vectors form and re-form the pattern of my life.” (13) Teaching, he argues, comes from the heart and soul of the teacher, and not primarily from chosen techniques.
Palmer makes a solid point about paradox and pedagogical design. “The space should be bounded and open….hospitable and charged….invite the voice of the individual and the voice of the group…welcome both silence and speech.” (76-77). The tendency in teaching, I think, is to swing from one side to the other, when we really need to be addressing all of these things simultaneously. Making space for silence in the classroom is something that is especially difficult for me.
He observed, “students who have been well served by good teachers may walk away angry—angry that their prejudices have been challenged and their sense of self shaken. That sort of dissatisfaction may be a sign that real education has happened. It can take many years for a student to feel grateful to a teacher who introduces a dissatisfying truth.” (96-97). This made me wonder if we should add teaching evaluations from alums 5+ years after the class.
I also liked his description of subject-centered classes (instead of teacher-centered or student centered). In the subject-centered class, the students are active and important participants, but they are not the focus of the time.
Palmer notes that he uses mastery grading, allowing students to revise their papers as many times as they like with only the final grade counting. I tried this once, in an MBA class, because many of my colleagues utilize it. I found mastery grading lacking. It encourages weak initial effort, as the students wait for comments, knowing that they can revise their poor product with more specific guidance.
Finally, I really liked the Quaker concept of a “clearness committee” that Palmer describes. The committee consists of four or five colleagues and a focus person. Before the meeting, the focus person writes a description of the problem (as professors, likely stemming from the classroom). Then, for two to three hours the colleagues of the focus person ask him/her open-ended questions about the problem, being careful not to offer advice, bring attention to themselves, or ask questions that are really advice in disguise (e.g., Have you considered seeing a therapist?) After the questions, the focus person has the option of continuing with mirroring (“reflecting to the focus person things he or she said or did but might not be aware of: 'When asked about A, you said B,' or 'When you spoke about X your voice dropped and you seemed tired.'”) (160). Confidentiality is pledged, not only to those outside of the committee, but also within the committee--meaning that the topic would not be raised again, even among the group members. The clearness committee would take a fair bit of time but seems like a great way to solves problems, as most solutions that stick seem to stem from personal realizations rather than merely outside advice.
There wasn’t all that much that surprised me in this book, but it was an easy read and had a few good reminders.
Friday, July 14, 2017
I highly recommend Jayber Crow by Wendell Berry.
Set in rural Kentucky, Jayber Crow is a story about small town life, community, love/hate, sustainability, and industrialization. The main character, Jonah "Jayber" Crow loses both his parents and his Aunt and Uncle by the age of ten. He spends the next few years in an orphanage before obtaining a scholarship to a local college as a "pre-ministerial" student. Doubting his calling to the ministry, Jayber drops out and returns to his hometown. He serves as the town's only barber, and he also picks up jobs as the local grave digger and church janitor. Jayber narrates, in vivid detail, the exodus from the small town by the younger generation and the invasion of large-scale, profit-focused, corporate farming.
The author, Wendell Berry, warns that "persons attempting to explain, interpret, explicate, analyze, deconstruct, or otherwise 'understand' [this book] will be exiled to a desert island in the company only of other explainers" so I will simply end with a few of my favorite quotes below. I think one of the reasons I so liked this book is because it reminded me of my family's property and of my maternal grandfather, who lived at a pace unknown to most of us and who worked the land with his hands and simple tools.
"You have been given questions to which you cannot be given answers. You will have to live them out--perhaps a little at a time." (54)
"The university thought of itself as a place of freedom for thought and study and experimentation, and maybe it was, in a way. But it was an island too, a floating or a flying island. It was preparing people from the world of the past for the world of the future, and what was missing was the world of the present, where every body was living its small, short, surprising, miserable, wonderful, blessed, damaged, only life." (71)
"Instead of sitting out and talking from porch to porch on the summer evenings, the people sat inside rooms filled with the flickering blue light of the greater world." (258)
"We were, as we said again, making war in order to make peace We were destroying little towns in order to save them. We were killing children in order that children might sleep peacefully in their beds without fear." (294)
"On those weekends, the river is disquieted from morning to night by people resting from their work. This resting involves traveling at great speed, first on the roads and then on the river. The people are in an emergency to relax." (331)
"The Economy does not take people's freedom by force, which would be against its principles, for it is very humane. It buys their freedom, pays for it, and then persuades its money back again with shoddy goods and the promise of freedom." (332)
Update: Here is a trailer for a new film on Wendell Berry, Look & See. Powerful, especially if you grew up in a rural place that is now being "developed," or if have seen beautiful landscapes that you love ruined. "Those who had wanted to go home could never get there now...."
Friday, June 30, 2017
While I am already looking forward to returning to the classroom in the fall, one of the reasons that I love summers is that I get to catch up on reading. It has been an embarrassingly long time since I have finished a fiction book, but I am committed to making fiction an increasing percentage of my reading.
Percy's Moviegoer won the 1962 National Book Award. I have my brother Will to thank for the recommendation and for the book itself. The novel focuses on the life of a New Orleans area stockbroker "Binx" Bolling, and his search for meaning. I won't ruin the story for those who have not read it, but I was moved by the Binx's struggle against what he called the malaise and everydayness. Binx appears to be a pretty sad character, spending a good bit of time hiding from life in movie theaters and engaging in flings with his secretaries, but he can also inspire the reader to ask serious questions, engage in meaningful relationships, and live more intentionally.
Tuesday, June 20, 2017
A friend who is a member of a university faculty (non-law) some years ago recommended that I read Straight Man, by Richard Russo. I am forever thankful. The book is a novel set in a small town in Pennsylvania and follows the trials and tribulations of an English-department faculty member at a college besieged by budget challenges, a dysfunctional department, and his own lack of motivation.
The book is funny -- sometimes laugh-out-loud funny -- and for anyone on a faculty, I am willing to wager that, despite occasional absurdity, this faculty will feel like it could be yours. The main character is sympathetic, to a point, but he is also part of the problem. It is a fast read, and it's one I come back to every couple years. Perhaps it is just a guilty pleasure, but the universality of the characters and the bit of hope that emerges are things I find to be comforting in some way. It may be that the book serves as a reminder that we're not alone in our craziness. Everyone who has taught for a while knows a Hank, a Finny, a Gracie DuBois, Jacob Rose, a Billy Quigley.
The book also a good reminder of traps we, as faculty (and administrators), can fall into, and hopefully, help us avoid them. If you need a break from research and heavy reading, I highly recommend you put this in the rotation.
Here's the Amazon.com Review:
First Jane Smiley came out of the comedy closet with Moo, a campus satire par excellence, and now Richard Russo has gotten in on the groves-of-academe game. Straight Man is hilarious sport, with a serious side. William Henry Devereaux Jr., is almost 50 and stuck forever as chair of English at West Central Pennsylvania University. It is April and fear of layoffs--even among the tenured--has reached mock-epic proportions; Hank has yet to receive his department budget and finds himself increasingly offering comments such as "Always understate necrophilia" to his writing students. Then there are his possible prostate problems and the prospect of his father's arrival. Devereaux Sr., "then and now, an academic opportunist," has always been a high-profile professor and a low-profile parent.
Though Hank tries to apply William of Occam's rational approach (choose simplicity) to each increasingly absurd situation, and even has a dog named after the philosopher, he does seem to cause most of his own enormous difficulties. Not least when he grabs a goose and threatens to off a duck (sic) a day until he gets his budget. The fact that he is also wearing a fake nose and glasses and doing so in front of a TV camera complicates matters even further. Hank tries to explain to one class that comedy and tragedy don't go together, but finds the argument "runs contrary to their experience. Indeed it may run contrary to my own." It runs decidedly against Richard Russo's approach in Straight Man, and the result is a hilarious and touching novel.
Wednesday, April 26, 2017
COLLECTIVE BOOK ON LEGAL INNOVATION
Call for submissions
The program « Law & Management » developed by the European Center of Law and Economics (known as CEDE in French) of ESSEC Business School, is an innovative and pioneering research program which aims to study the use of law as a competitive factor.
In this regard, the members of the research program « Law & Management » have decided to publish a collective book focusing on legal innovation. This book, co-edited by A. Masson (ESSEC) and D. Orozco (Florida State University), will analyze, by crossing the points of view of lawyers and creative specialists, the concept and life cycle of legal innovations, techniques and services, whether they are related to legislation, legal engineering, legal services, legal strategies…, as well as the role of law as a source of creativity and interdisciplinary teamwork. All the techniques that could facilitate legal innovations from the perspective of design thinking to predictive design, through the customer experience will be analyzed.
The program Board is now opening the call for proposals. Papers proposals (consisting in a brief summary in English) of a maximum length of 1000 words, should be sent to A. Masson (firstname.lastname@example.org) by May 8th, 2017. A least one practical example of legal innovations on which the papers will rely on must be mentioned in the proposals.
The proposals will be reviewed and selected by a scientific committee. Authors will receive a definitive answer by June 6th, 2017. The final manuscripts will be expected by October 9th, 2017.
A conference, following the publication of the book, will be organized in Paris in 2018.
With the support of the Paris Île-de-France Regional Chamber of Commerce and Industry and the French Corporate Counsel Association (AFJE).
Thursday, December 15, 2016
This post is not about politics, although it does concern President-elect Trump's cabinet pick, ExxonMobil head, Rex Tillerson. I first learned about Tillerson during some research on business and human rights in the extractive industries in 2012. I read the excellent book, "Private Empire" by Pultizer-prize winner Steve Coll to get insight into what I believe is the most powerful company in the world.
Although Coll spent most of his time talking about Tillerson's predecessor, Lee Raymond, the book did a great job of describing the company's world view on climate change, litigation tactics, and diplomatic relations. Coll writes, “Exxon’s far flung interests were at times distinct from Washington’s.” The CEO “did not manage the corporation as a subordinate instrument of American foreign policy; his was a private empire.” Raymond even boasted, “I am not a U.S. company and I don’t make decisions based on what’s good for the U.S.” Indeed, the book describes how ExxonMobil navigated through Indonesian guerilla warfare, dealt with kleptocrats in Africa, and deftly negotiated with Vladmir Putin and Hugo Chavez.
Before I read the book, I knew that big business was powerful--after all I used to work for a Fortune 500 company. But Coll's work described a company that was in some instances more influential to world leaders than the UN, the US State Department, or the World Bank. I don't know if Trump has read the book, but no doubt he knows about the reach of Tillerson's power. I won't comment about whether this pick is good for the country. I will say that this choice is not outrageous or even surprising given Trump's stated view of what he wants for America. The key will be for Tillerson, if he's confirmed, to use the skills he has honed working for ExxonMobil for the country.
If you have time after grading for a really good read (it's a fast 700 pages), pick up the book. Coll's view on the Tillerson nomination is available here.
Wednesday, September 14, 2016
As you know, assessment is of critical importance these days, and I am confident that in a few years most, if not all, law school casebooks will come with effective, out-of-the-box, turnkey assessments. If you believe your book is already there, or even close, please send your pitch to me at email@example.com. Assuming no unforeseen problems, I plan to post these pitches here, as I am sure they will be of interest to many of our readers.
Friday, June 10, 2016
I have been following Professor Angela Duckworth's work on grit for well over a year, so I was eager to read her new book, Grit: The Power of Passion and Perseverance. In fact, I can't remember the last time I bought and read a book within a few weeks of it being published.
The book is an easy read, written for a for a popular audience, and I was able to finish it in three relatively short sittings.
Below, I reflect on the book, hopefully in a balanced way.
Thesis. As may be evident from previous posts of mine, I like Duckworth's thesis - essentially, that passion and perseverance in pursuit of long-term goals are important in achieving success. Duckworth is careful to caveat her thesis, noting at hard work and passion are important, but are not the only factors that matter in achieving success. With this caveat, her thesis seems rather obvious and uninteresting.
Grit Scale. The Grit Scale Duckworth created for her studies seems easy to fake, and to her credit, she admits that it can be faked, like most self-reporting measures. Given the ability to fake the Grit Scale, I am not sure that it would be of much use in practical settings where the stakes are high (such as admissions or hiring). In one of the more interesting studies, Duckworth discusses how they gave the Grit Scale to West Point cadets before going through Beast Barracks (described as the toughest part of the four years). Supposedly, Grit scores did a nice job predicting who would stay and who would drop out. Given that the scale is easy to fake, maybe the interesting finding is not "those who actually have more grit perform better" but rather "those who think they have more grit (or are willing to lie that they have more grit) perform better.
Parenting and Teaching. As a parent, I appreciated her chapter on parenting for Grit (though she admits that these are just her thoughts, and unlike other parts of the book, the parenting chapter is lacking directly applicable scientific studies). In particular, she notes the importance of being both supportive and demanding. This is also fairly obvious, but easy to forget, hard to consistently apply, and important to remember. This instruction applies to teachers as well -- make clear that you have high expectations, but also communicate you are there to help and believe the students can meet the expectations with work. For a skeptics view, at least on the point of whether grit can be taught, see here.
Creativity, Talent, Structural Barriers: While Duckworth admits that there are other factors that contribute to success, I didn't think she made a strong case for grit being more important than creativity or talent. In fact, most of the gritty people she mentioned had certain natural advantages over many others. While grit may be needed to get things done, it seems like creativity and talent and access are all necessary and may be even more important than grit in some cases.
Anecdotes. There are a number of anecdotes in the book. The stories are less convincing than the academic studies, but the stories help illustrate her points. I especially liked the sports stories, including the ones about the UNC women's soccer team and the Seattle Seahawks. The coach of the UNC soccer team, for example, had his team memorize passages related to each team core value, and then also integrated the values into practices and games. Much better than a meaningless organization vision statement.
All in all, I think the book was worth reading, if only to stay current on some of the theories that are likely to be talked about by educators at all levels, and to inspire more passion and perseverance in general.
For a fair and thoughtful critique of Grit see here.
Friday, June 3, 2016
Next week, I will post some reflections on the contents of the book, but for now, I would like to discuss professors publishing for a popular audience. Tongue-twisting alliteration unintended.
I am thankful that Duckworth wrote this book for a popular audience rather than in a way that would target a narrow slice of academia. Even as a professor myself, I find books written for popular audience easier to digest, especially if in a different discipline. While popular press books often oversimplify, I would rather a professor author a popular press book on her studies (and studies in her field) than have a journalist attempt to explain them. Also, while a popular press book may oversimplify, professors tend to be intentional about avoiding claims that are too sweeping. Note that in this interview, like the book, Duckworth is careful to state that grit is not the only thing that contributes to success. Finally, especially when the professor has done the background academic work first, as Duckworth did in many peer-reviewed journal articles, a popular press book can reach more people and inspire change and may eventually lead to broader engagement with the underlying academic articles.
Grit, as a popular press book, has already reached a large audience. Grit was published by Scribner: An Imprint of Simon & Schuster (not a university press) and jumped into the top-5 of The New York Times best-seller list for hardcover non-fiction. Duckworth had already reached well over a million people with her TED talk, and the book allowed her to be much more nuanced than she could be in a 6 minute speech. The TED talk was a gateway to her popular press book and perhaps her popular press book with be a gateway to the academic research she cites.
One problem with engaging a large, popular audience is that the professor may lose control of her message, and people may misinterpret the findings. Duckworth looks like she is staying engaged in the conversation, however, and has, for example, written to argue against grading schools on grit.
In short, there are certainly potential problems when writing about academic topics for a popular audience, but I am glad Duckworth took on the challenge and spread her research in this way. That said, as I will discuss next week, Grit does have weaknesses, in addition to its strengths.
Monday, November 30, 2015
I never thought I would say this, but my favorite book this year is about punctuation. That’s right. Punctuation! The book is Making a Point: The Pernickety Story of English Punctuation, by David Crystal, and it's well worth reading.
It’s an enjoyable romp through the English language, with limited attention to writing in other languages as well. (I just placed something in a German English-language publication and discovered that Germans don’t know how to “correctly” use quotation marks.)
This isn’t a rule book; Crystal talks about current usage, including areas where the “experts” disagree. (Oxford comma, anyone?) But he also covers the history—how the use of punctuation has evolved over time. One of the book's recurring themes is how two functions of punctuation--clarifying the writer's meaning and providing cues to speakers--can sometimes be at odds.
The history is fascinating. I have to admit that, after reading this book and seeing what excellent writers have done in the past, it’s harder to argue for a prescriptive position. I don’t always agree with Crystal’s position on disputed issues, but his case is always cogent.
Crystal covers all the major punctuation marks: , , ;, :, . . . , ., and ( ). (Yes, I did write this sentence just to see what it would look like.) But he also covers other lesser-known punctuation marks that have fallen into disuse, as well as the use of capital letters and spacing. (I was surprised to learn that early Anglo-Saxon writing often didn’t have spacing between words.)
I’m a writing geek, so I love to read books like this. But this book isn’t just for people like me. Anyone who writes for a living or wants to write for a living—and that includes all lawyers and law students—should read this book. Making a Point is entertaining and informative, and the writing is clear. (I almost restrained the urge to write “crystal-clear.”) Check it out.
Wednesday, August 5, 2015
I am sure that many of you, like me, are deluged with email messages at this point in the year from well-meaning students taking your fall courses who ask whether a particular text--or version of a text--marked as "required" on the book list is really required. There are many ways to respond to these requests. A number of my my Facebook friends--including former students--suggest a simple response, something akin to: "What part of required do you not understand?"
While that kind of a response sometimes is very appealing (especially when I get two emails asking about this kind of thing on the same day), I have decided to use these interactions as a teaching moment--of sorts. Set forth below is a version of a message that I send, in case it is of some use to you in this or another similar context. The specific inquiry to which I am responding relates to a student's question about using a 2013 "statutory supplement" in my Fall 2015 Business Associations course.
Hey, [name of student]. Thanks for reaching out to me. This is a common question. It has an easy (although perhaps unpalatable) answer. I marked the 2015 statutory resource book (not really a supplement, but the core of our work in this course) as required for the course. I will be working from the 2015 version in and outside class. I cannot ensure that the 2013 version—or even the 2014 version—will have everything you need. While I know the authors, I do not control and am not privy to what they include and exclude every year. So, I cannot recommend your use of the 2013 version, and if you use it, you will be responsible for noting where the gaps or changes are. There may be none, but I cannot guarantee that.
I regret making students pay the money for a new paperback every year. But I have come to consider it an investment. Of course, as you already know, lawyers should never use an outdated version of the law for their research. It can be the basis of a claim of malpractice or sanctions on the basis of incompetence or a lack of diligence. So, my required use of a current version of the restatement provisions, statutes, rules, and other materials in the statutory resource book is also a way of encouraging professionally responsible, low-risk legal practice.
I will not be policing the use of outdated or other supplements—or even online versions of the statutes, rules, and other materials (which include a sample corporate charter and bylaws, for example)--instead of the assigned statutory resource book for class. So, it's all up to you. Others have used outdated or online or photocopied versions of the materials in the statutory resource book in the past and done very well in the course. But they typically put in significant work on their own to ensure they had what they needed for the exams and assignments.
See you in a few weeks. I will look forward to having you in class. You already have exhibited professionally responsible behavior in contacting me in advance and asking about the resource book. That's a great start to the semester.
Incidentally, in case you wondered, most students respond to my email thanking me and noting they will acquire the 2015 edition. Many students do not contact me at all about this issue and just go ahead and use outdated materials. Some of these non-communicative students have later admitted to me they regretted that decision.
Also, I have tried in the past to just assign online versions of the restatement provisions, statutes, and rules. There are two main disadvantages that I identified to this approach. First, I found that students did not bring the necessary legal provisions to class with them in electronic or hard-copy form or did not bring a computer to access rules that come up in class in an unplanned manner. Relatedly, it is important to note that, when the students take my open-book midterm (oral) and final (written) exams, they really need to have hard copies of the relevant rules with them, which means printing them out and collecting them in a book or folder anyway (since I do not allow electronic devices, other than ExamSoft-modified computers, in my examinations). Second, my statutory resource book has materials other than restatement, statutory, and regulatory provisions in it. If the book is not required, I must supplement the text with these additional materials, where necessary or desired.
Let me know your thoughts and share comments for improvement. Or tell me I am being too nice and should push back harder at my students. The type of response I have included above is generally consistent with my overall communication style with my students, which could be characterized as compassionate but direct. Others may have very different approaches to instructor-student communications or course objectives that make my response undesirable or even counterproductive. Please do share those kinds of reactions in the comments.
Wednesday, July 29, 2015
My friend and corporate law colleague Marco Ventoruzzo (Penn State Law and Bocconi University) recently let me know that he and several others--Pierre-Henri Conac, Gen Goto, Sebastian Mock, Mario Notari, and Arad Reisberg--have published a coauthored teaching text entitled (and focused on) Comparative Corporate Law. As someone who has taught that subject (as well as comparative and cross-border mergers and acquisitions) in the past, I have been very interested in taking a look at the book--the first of its kind, as far as I know. Luckily, I was able to grab a review copy from the publisher, West Academic Publishing (American Casebook Series), at the Southeastern Association of Law Schools (SEALS) conference, which I am attending this week. This post shares a bit about the book (based on a relatively quick examination--peeking more closely into some chapters than others) and my ideas for teaching from it.
I recommend the book and would use it in a course I would teach on the subject matter. The content is really wonderful. Nearly everything I need as a foundation for a course in comparative or cross-border corporate law is included. However, I have a few general criticisms, primarily based on my personal teaching perspective, that I will note in this post.
Friday, July 24, 2015
For a university discussion group this summer, I read William Deresiewicz's book Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life (2014).
Deresiewicz, a former Yale English professor, caused quite a stir in higher education circles with his Don't Send Your Kid to the Ivy League article in the New Republic (and other articles in various outlets), which promoted Excellent Sheep pre-publication.
Deresiewicz's attack on the ivy league can be summarized as follows:
- Encourages a system that leads to resume-padding instead of authentic learning and service
- Too much focus on future financial success and not enough focus on life's big questions
- Not enough socioeconomic diversity
- Faculty preoccupied with research and do not spend enough time on teaching/service
- Risk-taking is not encouraged; error for margin for students is too small
- Coursework not rigorous enough
- Students are kept doing busy-work rather than allowed to explore
- Encourages a system that can lead to depression, isolation, etc.
Deresiewicz taught at Yale for 10 years and was supposedly denied tenure in 2008. When I found out that Deresiewicz's was denied tenure, I was tempted to write off his book as sour grapes, but I think it best to evaluate his claims on their own merit.
In my view, Deresiewicz doesn't bring much new to the conversation, and a number of his challenges to the ivy league could be brought against many colleges and universities. His proposed solution is for students to consider attending a small liberal arts college (where teaching is still a priority) or a state school (where there is much more true diversity). Deresiewicz, however, seems to underestimate the value of connections, brand, resources, and opportunities at ivy league schools.
Deresiewicz also laments the dwindling interest in the liberal arts and the increasing focus on majors that are more directly profession-focused (like economics and finance). While Deresiewicz seems to realize the risk in turning down an ivy league education and also choosing a major like History or English, he does not seem to fully realize how some students simply cannot afford those risks. While return on investment should certainly not be the only focus in choosing a school and a major, it is rightfully important to many.
Personally, I don't think the entire 242-page book was worth the read. There simply was not much new, aside from a few glimpses behind the curtain at Yale. If I had it to do over again, I probably would have just stuck with Deresiewicz's article and the responses (e.g., here and here).
Monday, July 6, 2015
I have been reading Paul Mahoney’s brilliant new book, Wasting a Crisis: Why Securities Regulation Fails (University of Chicago Press 2015). You should too.
Mahoney attacks the traditional market failure rationale for our federal securities laws. He argues that contrary to the traditional narrative, market manipulation was not rampant prior to 1933 and the securities markets were operating reasonably well. Mahoney concludes that “‘lax’ regulation was not a substantial cause of the financial problems accompanying the Great Depression and . . . most (although not all) of the subsequent regulatory changes were largely ineffective and in some cases counterproductive.”
Mahoney looks at state blue sky laws, the Securities Act, the Exchange Act, the Public Utility Holding Company Act, and, regrettably only briefly, the Investment Company Act. He concludes by discussing the Sarbanes-Oxley and Dodd-Frank Acts. He discusses the rationales for each regulation and whether those rationales are supported by the facts. Mahoney backs up his argument with a great deal of empirical research, some of which has appeared in earlier articles. Warning: Some of that discussion may be a little difficult for those without a background in regression analysis or financial economics, but you can follow Mahoney’s conclusions without understanding all of the analytical detail.
Mahoney’s work is a nice counterpoint to the narrative that prevails in most securities treatises and casebooks. Every law library should have a copy. Everyone interested in securities regulation policy, and certainly everyone who teaches a securities law course, should read this book. Whether or not you ultimately agree with Mahoney (as it happens, I generally do), his arguments must be dealt with.
Friday, June 26, 2015
A number of months ago, a friend told me about Dolly Parton's Imagination Library. The vision of the Imagination Library is "to foster a love of reading among [the] county’s preschool children and their families by providing them with the gift of a specially selected book each month."
The books are free of charge, and anyone with preschool children can sign up, regardless of family income. Our two-year old son loves getting the books in the mail.
While the Imagination Library has already served over 800,000 children, I wonder if their choice architecture is limiting their reach. Also, I wonder if their choice architecture is preventing use of the program by families who need the books the most. Currently, families can sign up online to receive the books. It is a simple process, but you need to have heard about the program, need to have internet access, and need to be able to fill out the sign-up questions.
A nudge, such as an opt-out form (through the mail, or, if allowed, at the hospital) might allow the Imagination Library to reach a greater number of children. (If Gerber Life Insurance knows when we have a baby, I am sure the Imagination Library could find out). I doubt many families would opt out of the Imagination Library's program. Who would turn down free books? Perhaps, however, the program is purposely set up with a few hurdles because of limited resources.
The partners of Imagination Library include Penguin Group USA. I imagine that Penguin probably sees this partnership as part marketing and part corporate social responsibility. In any event, we have really enjoyed the program.
Friday, June 19, 2015
The book is much more “popular press” than academic, as should be clear from the splashy subtitle “liberating the heroic spirit of business.” There is a bit of academic influence in the appendix and notes, but it is mostly social business advocacy and story telling. In fact, the authors state that the primary purpose of the book “is to inspire the creation of more conscious businesses: businesses galvanized by higher purposes that serve and align the interests of all their major stakeholders.” (pg. 8). The book is interesting, passionate, and may accomplish its primary purpose.
The authors paint a compelling picture of Whole Foods Market and similar companies like Trader Joe's, The Container Store, Costco, and Southwest Airlines. These companies appear to take a long-term view and consider what is best for all their stakeholders. I would have appreciated, however, more attention to the struggles the companies must have faced in attempting to satisfy all of their stakeholders. After finishing the book, I was left wishing the authors would have spent more time discussing how to make decisions in situations where certain stakeholder interests irreconcilably conflict.
I may have more to say about this book in future posts, but as someone who has been researching in the social business area for a few years, I continue to be amazed at the proliferation of terms. The authors describe four tenants of their term “conscious capitalism”: (1) Higher Purpose (beyond just generating profits); (2) Stakeholder Integration (“optimizing value creation for all of them”); (3) Conscious Leadership (leaders “motivated primarily by service to the firm’s higher purpose and creating and creating value for all stakeholders.”); (4) Conscious Culture and Management (culture and management centering around traits like “trust, accountability, transparency, integrity, loyalty, egalitarianism, fairness, personal growth, and love and care.) (pg. 32-35)
The authors try to differentiate their term of “conscious capitalism” from similar terms, as discussed below. While some of the distinctions make sense, I wish that these various social business movements would agree on a common vocabulary and work together more consistently. Unfortunately and ironically, many associated with the social business movements seem especially territorial. Perhaps, the lack of focus on financial returns causes some to seek personal returns in the form of recognition and influence. Quotes in the bullet points below come from pages 38, 291-97 in the book.
- Corporate social responsibility. The authors note that CSR is often “grafted onto traditional business model, usually as a separate department or part of public relations," but for Conscious Capitalism “[s]ocial responsibility is at the core of the business.” The authors are not the first to note this difference between CSR and the more recent social business movements, and I think it is a fair distinction, at least in some cases.
- Natural Capitalism. According to the authors, “Conscious Capitalism included the valuable insights that natural capitalism offers about the environment and transcends them with a more comprehensive view of the entire business and economic system.” The authors seem to suggest that their term is more holistic, not merely focused on the environment, and more focused on human ingenuity than simply preserving the environment.
- Triple Bottom Line. The authors seem to think that Conscious Capitalism has a more inclusive view of stakeholders than TBL’s “people, profit, planet.” I don’t think the authors make their case for this distinction, failing to note stakeholders that don’t fall in one of TBL’s three buckets. The authors then note that their theory pays more attention to “purpose, leadership, management, and culture.” I also think this is stretching for distinctions; most of the TBL proponents I know recognize the importance of “purpose, leadership, management, and culture.” The authors admit that the TBL movement is "a fellow traveler," but I think TBL and Conscious Capitalism are roughly synonymous.
- Shared-Value Capitalism. SVC, championed by Michael Porter and Mark Kramer, focuses on creating economic value for shareholders and all of society. Conscious Capitalism, the authors claim, does not only focus on economic value like SVC, but expands to human values and includes “emotional and spiritual motivators” lacking with SVC.
- Creative Capitalism. Bill Gates popularized this term in 2008 at the World Economic Forum, claiming that certain companies can use variable pricing to make products affordable to those at the “base of the pyramid” and still make a profit. The authors claim Creative Capitalism seems like an “add on” similar to CSR, only applies certain companies, and over-focuses on the reputational benefits, rather than changing the core business purpose.
- B Corporations. The authors do not seem optimistic about “[certified] B corporations” which they unfortunately use interchangeably with “benefit corporations,” even though the two terms are distinct. The main reason the authors offer for their pessimism toward B corporations is that “B corporations appear to violate the important principle that owners [shareholders] should ultimately control the corporation.” Most legal readers will notice problems with that statement. First, shareholders don’t control corporations, boards of directors do (see, e.g., DGCL 141(a)). Second, to the extent the authors are talking about aspects of corporate governance like the shareholders’ ability to elect the directors and bring derivative suits, those powers remain for shareholders of both certified B corporations and benefit corporations. Giving the authors (neither of whom are legally trained) the benefit of the doubt – perhaps they are talking about the deprioritization of shareholders in the benefit corporation statutes (shareholders are simply one of many stakeholders that the board must consider in its decision making). The authors seem concerned that shareholders, the most vulnerable of the stakeholders (according to them), will be relatively unprotected. This is a fairly common concern, but the Conscious Capitalism model seems to deprioritize shareholders as well, and even in traditional corporate law, the business judgment rule provides significant protection to the board of directors. Delaware law does give shareholders more power in the M&A context, but benefit corporations and corporations committed to Conscious Capitalism that are incorporated in a constituency statute state seem like they would operate similarly, even in the M&A context. In short, the authors do not clearly express a strong grasp of the benefit corporation statutes, and throughout the book the authors actually seem to advocate operating corporations in line with the benefit corporation statutes (considering all stakeholders in decisions).
While I am a bit critical in some of my comments above, I did appreciate learning more about Whole Foods Market and similar companies. The companies discussed are some of my favorite companies and are certainly making the world better for many of their stakeholders. The book also made a number of claims that spurred additional thinking, for which I am grateful, and which made reading the book worthwhile.
Friday, May 22, 2015
Each summer, I try to read a few books related to work and a few books not related to work.
This summer, I have tagged Tamar Frankel's Trust and Honesty: America's Business Culture at a Crossroad and Flannery O'Connor's Everything That Rises Must Converge.
Open to other reading suggestions in the comments. I have a pretty deep "want to read" list, but am always looking for more additions.
I am also listening to a Yale online course called Philosophy and the Science of Human Nature, taught by Tamar Gendler. I am already more than halfway finished with the course - mostly listening in the car or while doing various chores. While I did not take any Philosophy courses in college, much of the material is more familiar than I would have thought. These open courses have been fun, and I am open to suggestions of other good courses.
Monday, April 27, 2015
Many of you have probably heard of bitcoin, the private digital currency that some mainstream merchants are now accepting. (Rand Paul recently became the first presidential candidate to accept donations in bitcoin.)
Bitcoin was developed by a software programmer who used the pseudonym Satoshi Nakamoto. It is built on cryptography software known as the blockchain, which both issues the currency and authenticates transactions using it.
If you haven’t heard of bitcoin or you don’t know much about it, I strongly recommend an interesting, informative new book : The Age of Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order, by Paul Vigna and Michael J. Casey.
Vigna and Casey are reporters for the Wall Street Journal. I think they're a little too optimistic about the future of digital currency, but their book is an excellent non-technical introduction to the bitcoin phenomenon and the blockchain software that underlies it. The book isn’t limited to bitcoin; Vigna and Casey talk about other digital currency. They also discuss other potential applications for the blockchain software, such as gambling, self-enforcing “smart” contracts, and currency exchange.
The book’s discussion of regulatory issues is limited. If you’re looking for a discussion of the legal issues, I suggest you look elsewhere. But the book is a very good introduction to digital currency and how it works.
Monday, February 23, 2015
I’m a big fan of Ernest Hemingway. I love his writing style. I’m currently rereading all of his novels, and I ran across a quote that I think every lawyer and law professor should read and take to heart.
I don’t think Hemingway was a fan of lawyers. The only lengthy portrayal of a lawyer in his fiction is in To Have and Have Not, and that lawyer is a crooked, double-crossing sleaze. I’m reasonably sure he never wrote or said anything specifically about legal writing. But the following passage from The Garden of Eden captures the essence of good legal writing:
Be careful, he said to himself, it is all very well for you to write simply and the simpler the better. But do not start to think so damned simply. Know how complicated it is and then state it simply.
No legal writing instructor could have said it better than Papa.