Thursday, January 19, 2017
Bernard Sharfman, a prolific author on corporate governance, has written his fourth article on the business judgment rule. The piece provides a thought-provoking look at a subject that all business law professors teach. He also received feedback from Myron Steele, former Chief Justice of the Delaware Supreme Court, and William Chandler III, former Chancellor of the Delaware Court of Chancery during the drafting process. I don’t think I will assign the article to my students, but I may take some of the insight when I get to this critical topic this semester. Sharfman has stated that he aims to change the way professors teach the BJR.
The abstract is below:
Anyone who has had the opportunity to teach corporate law understands how difficult it is to provide a compelling explanation of why the business judgment rule (Rule) is so important. To provide a better explanation of why this is so, this Article takes the approach that the Aronson formulation of the Rule is not the proper starting place. Instead, this Article begins by starting with a close read of two cases that initiated the application of the Rule under Delaware law, the Chancery and Supreme Court opinions in Bodell v. General Gas & Elec. By taking this approach, the following insights into the Rule were discovered that may not have been so readily apparent if the starting point was Aronson.
First, without the Rule, the raw power of equity could conceivably require all challenged Board decisions to undergo an entire fairness review. The Rule is the tool used by a court to restrain itself from implementing such a review. This is the most important function of the Rule. Second, as a result of equity needing to be restrained, there is no room in the Rule formulation for fairness; fairness and fiduciary duties must be mutually exclusive. Third, there are three policy drivers that underlie the use of the Rule. Protecting the Board’s statutory authority to run the company without the fear of its members being held liable for honest mistakes of judgment; respect for the private ordering of corporate governance arrangements which almost always grants extensive authority to the Board to make decisions on behalf of the corporation; and the recognition by the courts that they are not business experts, making deference to Board authority a necessity. Fourth, the Rule is an abstention doctrine not just in terms of precluding duty of care claims, but also by requiring the courts to abstain from an entire fairness review if there is no evidence of a breach in fiduciary duties or taint surrounding a Board decision. Fifth, stockholder wealth maximization (SWM) is the legal obligation of the Board and the Rule serves to support that purpose. The requirement of SWM enters into corporate law through a Board’s fiduciary duties as applied under the Rule, not statutory law. In essence, SWM is an equitable concept.
Monday, January 16, 2017
Professor Mike Schuster of Oklahoma State University, Spears School of Business, will be guest blogging at BLPB for the next 4 weeks. Prior to joining Oklahoma State's faculty, Professor Schuster was at attorney at Vinson & Elkins LLP in Houston, Texas. His research is primarily in the intellectual property space, which, as we all know, is quite important to businesses.
Professor Schuster's most recent academic article, "Invalidity Assertion Entities and Inter Partes Review: Rent Seeking as a Tool to Discourage Patent Trolls" is forthcoming in the Wake Forest Law Review and his SSRN page is available here.
Please join me in welcoming Professor Mike Schuster to BLPB.
Friday, January 13, 2017
Over at the Harvard Law School Forum on Corporate Governance and Financial Regulation, Rick Alexander has a post on benefit corporations. I plan to post some comments on Rick's post next week, when I have a bit more time, but for now, I will just bring our readers' attention to the post and include a small portion of his post below:
Benefit corporations dovetail with the movement to require corporations to act more sustainably. However, the sustainability movement often treats the symptom (irresponsible behavior), not the root cause—the focus on individual corporate financial performance. Proponents of corporate responsibility often emphasize “responsible” actions that increase share value, by protecting reputation or decreasing costs. Enlightened self-interest is an excellent idea, but it is not enough. As long as investment managers and corporate executives are rewarded for maximizing the share value of individual companies, they will have incentives to impose costs and risks on everyone else.
Tuesday, January 10, 2017
RESEARCH COLLOQUIUM: CALL FOR PAPERS
Law and Ethics of Big Data
Hosted and Sponsored by:
The Carol and Lawrence Zicklin Center for Business Ethics Research
The Wharton School of the University of Pennsylvania
Virginia Tech Center for Business Intelligence Analytics
The Department of Business Law and Ethics, Kelley School of Business
Washington & Lee Law School
April 21st and 22nd 2017
Wharton School of the University of Pennsylvania, Philadelphia, Pennsylvania
Abstract Submission Deadline: February 24, 2017
We are pleased to announce the research colloquium, "Law and Ethics of Big Data," at The Wharton School of the University of Pennsylvania, Philadelphia, Pennsylvania, co-hosted by Professor Philip M. Nichols, Assistant Professor Angie Raymond of Indiana University and Professor Janine Hiller of Virginia Tech.
Due to the success of this multi-year event that is in its fourth year, the colloquium will be expanded and we seek broad participation from multiple disciplines; please consider submitting research that is ready for the discussion stage. Each paper will be given detailed constructive critique. We are targeting cross-discipline opportunities for colloquium participants, and the Wharton community has expressed interest in sharing in these dialogues.
A non-inclusive list of topics that are appropriate for the colloquium include: Ethical principles for the Internet of Things, Intellectual Property and Data Intelligence, Bribery and Algorithms, Health Privacy and MHealth, Employment and Surveillance, National Security, Civil Rights, and Data, Algorithmic Discrimination, Smart Cities and Privacy, Cybersecurity and Big Data, Data Regulation. We seek a wide variety of topics that reflects the broad ecosystem created by ubiquitous data collection and use, and its effect in society.
TENTATIVE Colloquium Details:
- The colloquium will begin at noon on April 21st and conclude at the end of the day on April 22nd 2017.
- Approximately 50 minutes is allotted for discussion of each paper presentation; 5-10 minute author comments, and then a discussant will lead the overall discussion.
- The manuscripts will be posted in a password protected members-only forum online.
- Participants agree to read and be prepared to participate in discussions of all papers. Each author may be asked to lead discussion of one other submitted paper.
- A limited number of participants will be provided with lodging, and all participants will be provided meals during the colloquium.
Submissions: To be considered, please submit an abstract of 500-1000 words to Lauretta Tomasco at firstname.lastname@example.org by February 24, 2017. Abstracts will be evaluated based upon the quality of the abstract and the topic’s fit with the theme of the colloquium and other presentations. Questions may be directed to Angie Raymond at email@example.com or Janine Hiller at firstname.lastname@example.org. If you are interested in being a discussant, but do not have a paper to present, please send a statement of interest to the same.
Authors will be informed of the decision by March 3, 2016. If accepted, the author agrees to submit a discussion paper by April 10, 2017. While papers need not be in finished form, drafts must contain enough information and structure to facilitate a robust discussion of the topic and paper thesis. Formatting will be either APA or Bluebook. In the case of papers with multiple authors, only one author may present at the colloquium.
Saturday, January 7, 2017
The University of Georgia, Terry College of Business has posted information about two legal studies professor positions - one tenure-track and one lecturer. I know each of the University of Georgia legal studies professors; they are an impressive and thoughtful and friendly group.
Assistant or Associate Professor of Legal Studies:
Lecturer of Legal Studies:
Applications received by February 15, 2017, are assured of consideration; however applications will continue to be accepted until the positions are filled.
Monday, December 19, 2016
In her post on Saturday, co-blogger Ann Lipton offered observations about possible legal issues resulting from the President-Elect's tweets regarding public companies. She ends her post with the following:
So, it's all a bit unsettled. Let's just say these and other novel legal questions regarding the Trump administration are sure to provide endless fodder for academic analysis in the coming years.
Today, I take on a somewhat related topic. I briefly explore the President-Elect's conflicting interests through the lens of a corporate law advisor. For the past few weeks, the media (see, e.g., here and here and here) and many folks I know have been concerned about the potential for conflict between the President-Elect's role as the POTUS, public investor and leader of the United States, and his role as "The Donald," private investor and leader of the Trump corporate empire.
The existence of a conflicting interest in an action or transaction is not, in and of itself, fatal or even necessarily problematic. In a number of common situations, fiduciaries have interests in both sides of a transaction. For example, a business founder who serves as a corporate director and officer may lease property she owns to the corporation. What matters under corporate law is whether the fiduciary's participation in the transaction on both sides results in a deal made in a fully informed manner, in good faith, and in the bests interests of the corporation. Conflicting interests raise a concern that the fiduciary is or may be acting for the benefit of himself, rather than for and in the best interest of the corporation.
Corporate law generally provides several possible ways to overcome concerns that a fiduciary has breached her duty because of a conflicting interest in a particular action or transaction:
- through good faith, fully informed approval of the action or transaction (e.g., after disclosure of information about the nature and extent of the conflicts) by either the corporation's shareholders or members of the board of directors who are not interested in the transaction; and
- through approval of a transaction that is entirely fair--fair as to process and price.
See, e.g., Delaware General Corporation Law Section 144. Yet, if I believe what I read, no similar processes exist to combat concerns about actions or transactions in which the POTUS has or may have conflicting interests. In particular, to the extent one does not already exist, should a disinterested body of monitors be identified or constituted to receive information about actual and potential conflicting interests of the POTUS and approve the action or transaction involving the conflicting interests? Perhaps the Office of Government Ethics ("OGE") already has something like this in place . . . . If it does, then both the public media and I are underinformed about it. While there seems to be OGE guidance on the President-Elect's nominees for executive branch posts (see, e.g., here and here) and on overall executive branch standards of conduct (see here), I have not found or read about anything applicable to the President-Elect or POTUS.
In making these observations, I recognize that our federal government is different in important ways from the corporation. I also understand that the leadership of a country/nation is different from the leadership of a corporation. Having said that, however, conflicting interests can have similar deleterious effects in both settings. The analogy I raise here and this overall line of inquiry may be worth some more thought . . . .
Friday, December 16, 2016
My favorite new (to me) podcast is NPR's How I Built This. They describe the podcast as "about innovators, entrepreneurs, and idealists, and the stories behind the movements they built. Each episode is a narrative journey marked by triumphs, failures, serendipity and insight — told by the founders of some of the world's best known companies and brands."
So far, I have listened to two of the episodes: one about the Sam Adams founder Jim Koch and one about the Clif Bar co-founder Gary Erickson.
On the Sam Adams episode, I liked Jim Koch's distinction between scary and dangerous -- repelling off a mountain with an expert guide is scary but not not necessarily dangerous; walking on a snow-covered, frozen lake on a sunny day is dangerous but not necessarily scary. Jim said that his comfortable job at Boston Consulting Group was not scary, but it was dangerous in luring him away from his true calling. However, founding his own company (Sam Adams) was scary, but not really as dangerous as working for BCG. Also, it was interesting to find out that Jim Koch is a Harvard JD/MBA.
On the Clif Bar episode, though I have eaten more than my share of Clif Bars, I was surprised to learn that the bars were named for Gary's father, Clif. The Clif Bar episode also gave great insight into the emotions that can come out when deciding whether to sell your business; Gary decided not to sell to Quaker Oats at the last minute and then needed to buy-out his partner. Separately, Gary talked about the need for corporate counsel (and how a "handshake deal" with a distributor almost cost him his business), but he also noted how many attorneys are simply too expensive for small businesses.
Both entrepreneurs drew on lessons they learned during their outdoor adventure experiences. And both entrepreneurs discussed some combination of lawsuits, contracts, and regulatory challenges.
Looking forward to listening to more episodes.
Friday, December 9, 2016
Below are some resources related to the integration of faith and work stemming from businesses or business people.
- Acton Institute
- C12 Group
- Christian Legal Society
- Institute for Faith, Work, and Economics
- Jobs for Life
- Faith and Art - Vito Auito
- Vocation is Integral - Steven Garber
- Faith & Work Summit - Troy Tomlinson and Bill Lee
Books and Articles
- Vocation Needs No Justification - Steven Garber
- Faith and Fortune - Marc Gunther
- Why Work - Dorothy Sayers
- Redeeming Law - Michael Schutt
Thursday, December 8, 2016
A friend of mine is considering teaching his constitutional law seminar based almost entirely on current and future decisions by the President-elect. I would love to take that class. I thought of that when I saw this article about Mr. Trump’s creative use of Delaware LLCs for real estate and aircraft. Here in South Florida, we have a number of very wealthy residents, and my Business Associations students could value from learning about this real-life entity selection/jurisdictional exercise. Alas, I probably can’t squeeze a whole course out of his business interests. However, I am sure that using some examples from the headlines related to Trump and many of his appointees for key regulatory agencies will help bring some of the material to life.
Monday, November 28, 2016
Today, I share a quick teaching tip/suggestion.
I taught my last classes of the semester earlier today. For my Business Associations class, which met at 8:00 am, I was looking for a way to end the class meeting, tying things from the past few classes up in some way. I settled on using the facts from a case that I used to cover in a former casebook that is not in my current course text: Coggins et al. v. New England Patriots Football Club, Inc., et al. Here are the facts I presented:
- New England Patriots Football Club, Inc. (“NEPFC”), the corporation that owns the New England Patriots, has both voting and nonvoting shares of stock outstanding.
- The former president and owner of all of the voting shares of NEPFC, Sullivan, takes out a personal loan that only can be repaid if he owns all of the NEPFC stock outstanding.
- The board and Sullivan vote to merge NEPFC with and into a new corporation in which Sullivan would own all the shares.
- In the merger, holders of the nonvoting shares receive $15 per share for their common stock cashed out in the merger.
From this, I noted that three legal actions are common when shareholders are discontented with a cash-out merger transaction: appraisal actions, derivative actions for breach of fiduciary duty, and securities fraud actions. Shareholders in NEPFC brought all three types of action. (Footnote 9 of the Coggins case and the accompanying text explain that.)
Having just covered business combinations, including approval and appraisal rights, and wanting to address some new information about the process of derivative litigation, the facts from the case worked well. I am sure there are other cases or materials that also could have done the job. (Feel free to leave suggestions in the comments.) But adding a little football and conflicting interests to the last class seemed like the right idea . . . .
Friday, November 25, 2016
It is not secret that Patagonia is one of the companies that I admire most; it may be my favorite company and is certainly in my top-five.
Patagonia's decision regarding its Black Friday sales adds to the reason I like the company. Patagonia will donate 100% of its Black Friday sales to grassroots environmental groups.
As I read it, the donations will be 100% of revenue, not profits, and the donations are estimated to be millions of dollars.
Patagonia is both a California benefit corporation and B corporation certified, but unlike many social enterprises, Patagonia often does things like the above that don't appear to be done just for the PR, and may actually hurt the company in the very short-term.
That said, Patagonia definitely has a good PR team and is probably getting millions of dollars of exposure out of this decision. And their apparel is quite expensive, so they may be able to afford to do things like this, based, in part, on the margins and goodwill built over time.
Wednesday, November 23, 2016
I have been thinking about the long-short term investment horizon debate, definitions, empirics and governance design consequences for some time now (see prior BLPB post here and also see Joshua Fershee's take on the topic). This has been on mind so much that I am now planning a June, 2017 conference on that very topic in conjunction with the Adolf A. Berle Jr. Center on Corporations, Law & Society (founded by Charles “Chuck” O’Kelley at Seattle University School of Law). In planning this interdisciplinary conference where the goal is to invite corporate governance folks, finance and economics scholars, and psychologists and neuroscientist, I have had the pleasure of reading a lot of out-of-discipline work and talking with the various authors. It has been an unexpected benefit of conference planning. I also want some industry voices represented so I have reached out to Aspen Institute, Conference Board and a new group, Focusing Capital on the Long Term (FCLT), which I learned about through this process.
I share this with BLPB readers for several reasons. The first is that the FCLT, is a nonprofit organization, a nonprofit organization for BUSINESS issues created and funded by BUSINESSES. In July 2016, the Canada Pension Plan Investment Board, McKinsey & Company together with BlackRock, The Dow Chemical Company and Tata Sons founded FCLT. Other asset managers, owners, corporations and professional services firms (approximately 20) have joined FCLT as members. Rather than the typical application of a chamber of commerce style organization or trade industry group, here the stated missing of FCLT is to “actively engage in research and public dialogue regarding the question of how to encourage long-term behaviors in business and investment decisions.”
Second, FCLT has access to otherwise proprietary information—like C-suite executive surveys---and is conducting original research and publishing white papers and research reports on the issues of management pressures, and governance designs that may promote a long-term time horizon.
I know for some folks reading, especially those strongly aligned with a shareholder rights camp, will view this with skepticism as a backdoor campaign to promote executive/management power and bolster the reputation of professional service firms hired by those managers.** For me, though the anecdotal experience is a valuable component to considering all sides to the debate. It also helps articulate why and how the feedback loop of short-term pressures—even if it is only perceived rather than structurally quanitifable—may exist.
Third, I found some of the materials, particularly the Rising to the Challenge of Short-termism, written by Dominic Barton, Jonathan Bailey, and Joshua Zoffer in 2016 to be a useful reading for my corporate governance seminar. It helped to explain the gap between the law and the pressure of short-termism. It also helped provide a window into at least some aspects of decision making and payoffs in the governance setting. It can be quite hard to give students a window in the C-suite and BOD dynamics that they are naturally curious about while in law school. Even if you ideologically or empirically disagree with the claim of short-termism when trying to structure balanced reading materials that provide an introduction to the full scope of measures, these are resources worth considering.
Rising to the Challenge of Short-termism, written by Dominic Barton, Jonathan Bailey, and Joshua Zoffer in 2016, draws upon a McKinsey survey of over 1,000 global C-Suite executives and board members. The report describes increasing pressures on executives to meet short-term financial performance metrics and that the window to meet those metrics was decreasing. The shortening time horizon shapes both operations decisions as well as strategic planning where the average plan has shrunk to 2 years or less. Culture matters. Firms with self-reported long-term cultures reported less willingness to take actions like cut discretionary spending or delay projects when faced with a likely failure to meet quarterly benchmarks compared with firms that didn’t self-report a long-term culture. Sources of the pressure are perceived to come from within the board and executives, but also cite to greater industry-wide competition, vocal activist investors, earning expectations and economic uncertainty. The article concludes with 10 elements of a long-term strategy as a mini action plan.
Straight talk for the long term: How to improve the investor-corporate dialogue published in March 2015.
Investing for the future: How institutional investors can reorient their portfolio strategies and investment management to focus capital on the long term, published in March 2015. The paper identifies 5 core action areas for institutional investors focusing on investment beliefs, risk appetite statement, bench-marking process, evaluations and incentives and investment mandates to evaluate investment horizons.
A roadmap for focusing capital on the long term: A summary of ideas for asset owners, asset managers, boards of directors, and corporate management to focus on long-term value creation, published March 2015.
Long-term value summit in 2015 with a published discussion report made available February 2016. “120 executives, investors, board members, and other leaders from around the world gathered in New York City for the Long-Term Value Summit. Their mandate: to identify the causes and mechanisms of the short-term thinking that has come to pervade our markets and profit-seeking institutions and, more importantly, to brainstorm actionable solutions”
**The initial board of directors, announced on September 28, 2016 at the first board meeting, include some well positioned folks within BlackRock (Mark Wiseman), McKinsey & Co. (Dominic Barton), Dow Chemical (Andrew Liveris), Unilever (Paul Polman) and more. The BOD will be advised by Larry Fink, Chairman and CEO of BlackRock, as well.
Monday, November 21, 2016
Thanks to all who responded to my query two weeks ago on teaching corporate fiduciary duties. I continue to contemplate your suggestions as I recover from the cold that has consumed me now for a week. Don't catch this version of the common cold! It's a bear.
Anyway, the weekend after I published that post, I presented at a super symposium on shareholder rights at the University of Oklahoma College of Law--"Confronting New Market Realities: Implications for Stockholder Rights to Vote, Sell, and Sue," hosted by the Oklahoma Law Review. (I spoke on rights to sell securities purchased in an offering exempt from registration under the CROWDFUND Act, Title III of the JOBS Act.) Although it was not part of the formal agenda for the symposium, I got a chance to chat informally with a group of folks at and after the conference, including our host, Megan Shaner, along with Jessica Erickson, Gordon Smith, and Vice Chancellor Travis Laster from the Delaware Chancery Court (among others) about fiduciary duty complexity. All, even the Vice Chancellor, had sympathy, offering ideas for simplifying corporate fiduciary duty law (as opposed to merely the teaching of it) that made sense. And it seems that among those of us in the academy, there are many ways this material currently is taught in an introductory Business Associations/Organizations or Corporations course.
Of course, I am not the only one worried about teaching the law of business associations. In extended discussions on the topic, co-blogger Marcia Narine raised a great question. In general, she asked how one might teach business associations law to a relatively small class. I understand that she in the past has taught 60-75 students in a four-credit-hour course. That's similar to my situation at UT Law. I typically teach up to 72 students (although I teach a three-credit-hour-course). But in the future, Marcia may teach as few as 30 students in her four-credit-hour offering.
She noted that she doesn't want to overburden the students or herself, but she wants to think about doing things differently. She floated the idea of more peer grading. I suggested in response that my oral midterm exam becomes more palatable in a smaller class. I also noted that I would generally use more skills training in that environment and maybe even introduce current events or group presentations (2-3 students in each group) over the course of the semester. But I also allowed as how I wouldn't try too many things all at once. In fact, I noted that she might be better off just deepening what she already does that works.
What ideas do you have? Do some of you teach a Business Associations class that includes as few as 30 students? Do you use any specific pedagogies or tools that may be especially useful in a course like Business Associations/Organizations--a basic doctrinal upper-division course--when taught to a 30-student class? Do you have any tricks of the trade you would feel comfortable offering? If so, please post them in the comments.
In other Business Associations teaching news, I requested and have received permission to increase my Advanced Business Associations offering to three credit-hours from two. This is great news. I use this course to focus in more on publicly held and closely held firms, business combinations, derivative and securities litigation, and social enterprise and corporate social responsibility topics. I ask the students to describe and assess the interaction among policy, theory, doctrine, and practice skills in corporate governance. I like to have the students read full cases and law review articles, in addition to teaching text and excerpts. (And I now plan to add Ann Lipton's new book chapter to the reading list this spring for the part of the course in which we cover the importance of bylaw amendments to contemporary corporate governance. Great timing.)
Bottom line? The course, structured this way, just felt too densely packed with only two hours per week of teaching time. So, my last two-credit-hour version of the course will be taught this spring. Then, I will revamp the syllabus to add the extra credit-hour for 2018. Interestingly, it was my students who came to me originally asking for the change, because they wanted to pause more over some of the material. I did, too. So, now I am not worried about this any more. One thing to take off the ever-growing list of Business Associations teaching worries . . . .
Friday, November 18, 2016
Interest from churches in the integration of faith and work seems to have grown exponentially over the past few decades. That said, as far back as Martin Luther, there has been a call to view even jobs outside of ministry as a vocation or religious calling.
I plan to update this post from time to time, and I may add more discussion, but for now, I will just list some of the church-founded or church-connected faith & work initiatives or resources below. I welcome suggestions for additions to this list.
- Center for Faith and Work (This recent video on Civility in the Public Square is one example their events)
- Denver Institute for Faith & Work
- Institute for Faith, Work & Economics
- Nashville Institute for Faith & Work
- U.S. Conference of Catholic Bishops: The Dignity of Work and the Rights of Workers
Presentations and Panels
- Why Faith@Work Matters - Katherine Leary Alsdorf
- Redefining Work - The Gospel Coalition Panel Discussion
- Why Work Matters - Tim Keller
Tuesday, November 8, 2016
Each year, I rethink how I teach fiduciary duties in the corporate law context in my Business Associations course. My learning objectives for the students are both limited and involved. On the one hand, there's little room in my three-credit-hour course for a nuanced understanding of all of the contexts in which corporate fiduciary duty claims typically occur. In particular, I have determined to leave out the public company mergers and acquisitions context almost completely. On the other hand, I find myself juggling uncertain classifications of duty components, explanations of seemingly mismatched standards of conduct and liability, and judicial review standards in and outside the Delaware corporate law context. It's a handful. It's teaching complexity.
Of course, fiduciary duty is not the only complex matter that one must teach in Business Associations. But it is, for me, one of the topics I am least confident that I "get right" in my interactions with students in and outside the classroom. Accordingly, as I again head toward the end of the semester, I find myself wondering whether I could have done--or could do--more with the students in my Business Associations course this semester. This leads me to ask my fellow business law professors (that's you!) whether any of you have materials, teaching techniques, exercises (in-class or out-of-class), etc. that you find to be particularly effective in educating law students the basics and nuances of corporate fiduciary duties.
So, have at it! Share your corporate fiduciary duty teaching successes in the comments, if you would. I am all ears. I know that what you report will benefit me and others (including our students), and I hope that your comments will generate a continuing conversation . . . .
Friday, November 4, 2016
Over the next few weeks, I plan to write a series of posts exploring developments in this area of faith and business. I plan three additional posts, looking at faith and business (sometimes called, "faith and work") initiatives in (1) universities, (2) churches, and (3) businesses. My comments in this series will have a Christian focus, as that is my faith and is the area with which I am most familiar, but I welcome comments from any faith tradition.
Based on what I have seen around the country, many universities, churches, and businesses seem to be increasing their focus on the integration of faith and business. For some, this is a terrifying development. For others it is long overdue. I submit that both sides should attempt to engage in perspective-taking and nuanced discussion in an attempt to reach common ground.
As someone who prioritizes his faith, I also want to share my personal thoughts on the area of “faith and business” in this introductory post. First, some Christians, myself included, often lose sight of the fact that Jesus said that all the law hangs on loving God and loving others. Jesus cared for the societal outcasts (here, here, and here), while strongly (but lovingly) criticizing the spiritual leaders. He had and has followers with a diverse variety of political views. Jesus did things like healing people on the Sabbath that appeared to break religious law, but actually fulfilled the true, loving spirit of the law. Second, as Inside Edition correspondent Megan Alexander reminded Belmont University students and faculty last week, Christians should focus on doing high quality work, because the Christian scripture instructs for us to our work “heartily, as for the Lord.” This is a tough one for me, as I am often dissatisfied with my work product, but I think the call is to do the absolute best work you can do, with your talents and given your various responsibilities. Third, and finally, I think participants in the “faith and business” conversation have to realize that people of faith are unlikely to be able to leave their faith at home. There can be good conversations about how that faith can and should be expressed in business, but I don’t think it is realistic to think that serious people at faith can just turn off their beliefs while at work. While the discussions about the interplay of faith and business may be difficult, they are important discussions to have in this pluralistic society.
Sunday, October 23, 2016
The Association of American Law Schools (AALS) Annual Meeting will be held Tuesday, January 3 – Saturday, January 7, 2017, in San Francisco. Readers of this blog who may be interested in programs associated with the AALS Section on Socio-Economics & the Society of Socio-Economics should click on the following link for the complete relevant schedule:
Specifically, I'd like to highlight the following programs:
On Wednesday, Jan. 4:
9:50 - 10:50 AM Concurrent Sessions:
- The Future of Corporate Governance:
How Do We Get From Here to Where We Need to Go?
andre cummings (Indiana Tech) Steven Ramirez (Loyola - Chicago)
Lynne Dallas (San Diego) - Co-Moderator Janis Sarra (British Columbia)
Kent Greenfield (Boston College) Faith Stevelman (New York)
Daniel Greenwood (Hofstra) Kellye Testy (Dean, Washington)
Kristin Johnson (Seton Hall) Cheryl Wade (St. John’s ) Co-Moderator
Lyman Johnson (Washington and Lee)
- Socio-Economics and Whistle-Blowers
William Black (Missouri - KC) Benjamin Edwards (Barry)
June Carbone (Minnesota) - Moderator Marcia Narine (St. Thomas)
1:45 - 2:45 PM Concurrent Sessions:
1. What is a Corporation?
Robert Ashford (Syracuse) Moderator Stefan Padfield (Akron)
Tamara Belinfanti (New York) Sabeel Rahman (Brooklyn)
Daniel Greenwood (Hofstra)
On Thursday, Jan. 5:
3:30 - 5:15 pm:
Section Programs for New Law Teachers
Principles of Socio-Economics
in Teaching, Scholarship, and Service
Robert Ashford (Syracuse) Lynne Dallas (San Diego)
William Black (Missouri - Kansas City) Michael Malloy (McGeorge)
June Carbone (Minnesota) Stefan Padfield (Akron)
On Saturday, Jan. 7:
10:30 am - 12:15 pm:
Economics, Poverty, and Inclusive Capitalism
Robert Ashford (Syracuse) Stefan Padfield (Akron)
Paul Davidson (Founding Editor Delos Putz (San Francisco)
Journal of Post-Keynesian Economics) Edward Rubin (Vanderbilt)
Richard Hattwick (Founding Editor,
Journal of Socio-Economics)
October 23, 2016 in Business Associations, Conferences, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Financial Markets, Law and Economics, Law School, Marcia Narine Weldon, Research/Scholarhip, Stefan J. Padfield, Teaching | Permalink | Comments (0)
Friday, October 21, 2016
Belmont University College of Law in Nashville, TN has posted a professor opening and the school's areas of interest include business law. My appointment is in Belmont's business school, but I also occasionally teach in the law school, and I could not recommend the school (or the city of Nashville) more highly. I have updated my business law professor openings post here and am happy to add other postings.
Belmont University College of Law, located in vibrant Nashville, Tennessee, invites applications from entry- to mid-level candidates for a tenure-track faculty position to begin in 2017-18. Our primary areas of recruiting focus include criminal law, business law, and health law.
Applicants should have an exemplary academic record and should demonstrate outstanding achievement or potential in scholarship and teaching. Our goal is to recruit dynamic, bright, and highly motivated individuals who are interested in making significant contributions to our law school and its students. Practice experience is preferred, and teaching experience is desirable. For more information about the College of Law, visit our website at www.belmont.edu/law.
Belmont University College of Law is an ABA accredited law school with approximately 300 students in the heart of Nashville, one of the fastest growing and most culturally rich cities in the country. In 2015, graduates of the College of Law had the highest bar passage rate in Tennessee, and the school continues to produce strong employment outcomes for its students. For more information about the College of Law, visit our website at www.belmont.edu/law.
Belmont University is a private, coeducational university in a quiet area convenient to downtown Nashville and adjacent to Music Row. It is the largest Christian-centered university in Tennessee and among the fastest growing in the nation. Among its student body of over 7,500 are students from nearly every state and more than 25 countries. In addition to seven baccalaureate degrees in over 50 areas of study, Belmont offers master’s degrees in Business Administration, Accountancy, English, Education (including Sports Administration), Music, Nursing and Occupational Therapy, and doctorates in Occupational Therapy, Physical Therapy, Pharmacy, and Law.
The successful candidate will also share the University’s values and support our mission and vision of promoting Christian values by example. To apply, please contact email@example.com.
A comprehensive, coeducational university, Belmont is a student-centered, teaching university focusing on academic excellence. The university is dedicated to providing students from diverse backgrounds an academically challenging education. Belmont is an EOE/AA employer under all applicable civil rights laws. Women and minorities are encouraged to apply.
Friday, October 14, 2016
As a professor who moved from a law school to a business school, I remain amazed how little the two legal scholarly worlds overlap. I do, however, think the overlap is increasing somewhat, as more professors move between the two types of schools and the conferences and journals becoming a bit less segregated. That said, I imagine that many of our law professor readers may have missed legal studies professor Larry DiMatteo's (University of Florida, Warrington College of Business) 2010 American Business Law Journal article on strategic contracting. I had not read it until I moved to a business school and met Larry at a legal studies conference. Larry's article is proving useful in my current work, so I thought I would share it here with our readers. Abstract reproduced below:
This paper uses sources taken from the legal literature, as well as literature from strategy and human resource management. It explores Professor Gilson’s noted remark in the Yale Law Journal that “business lawyers serve as transaction cost engineers and this function has the potential for creating value.” This exploration focuses on the strategic use of contract law in gaining a competitive advantage and to create value. It begins by differentiating two frames of the contract paradigm. One is the internal frame in which contract law’s inherent flexibility allows for its use as a source of competitive advantage. The second frame is external since it focuses on the use of the contract paradigm in non-contractual contexts.
The paper examines the use of contract to create value and uses for examples, the commodification of information, licensing and IT outsourcing, and franchising. From there, the paper explores the use of contracts to sustain a competitive advantage (strategic contracting) and to create shared competitive advantages (strategic collaboration). It uses the creation and use of patent pools to illustrate both strategic uses of contract law. The next part focuses on the use of contracts to mitigate uncertainty in business transactions. It explores the strategic use of existing contract doctrines, the use contracts to insure performance and to deter opportunistic behavior, and the use of contracts to develop a preventive legal strategy. This is followed by the examination of contracting for innovation and contracts’ role in creating private governance structures, such as strategic joint venturing.
The final parts explore the use of contract as metaphor in nexus of contact theory in corporate law, psychological contract theory in employment law, and the potential abuse of the freedom of contract paradigm in limited liability company law. The paper then examines strategic responses to regulation by asking whether strategic avoidance or non-compliance to regulations has a place in a company’s legal strategy? The paper concludes by asking how does strategic contracting impact contract law? It answers the question by arguing that contract law change is inevitable due to a feedback loop.
Thursday, October 13, 2016
Today I used Wells Fargo as a teaching tool in Business Associations. Using this video from the end of September, I discussed the role of the independent directors, the New York Stock Exchange Listing Standards, the importance of the controversy over separate chair and CEO, 8Ks, and other governance principles. This video discussing ex-CEO Stumpf’s “retirement” allowed me to discuss the importance of succession planning, reputational issues, clawbacks and accountability, and potential SEC and DOJ investigations. This video lends itself nicely to a discussion of executive compensation. Finally, this video provides a preview for our discussion next week on whistleblowers, compliance, and the board’s Caremark duties.
Regular readers of this blog know that in my prior life I served as a deputy general counsel and compliance officer for a Fortune 500 Company. Next week when I am out from under all of the midterms I am grading, I will post a more substantive post on the Wells Fargo debacle. I have a lot to say and I imagine that there will be more fodder to come in the next few weeks. In the meantime, check out this related post by co-blogger Anne Tucker.