Friday, July 3, 2015

Amendments to Delaware PBC Law (“The Etsy Amendments”)

Among the DGCL amendments this year were a number of amendments to the Delaware Public Benefit Corporation (“PBC”) Law. 

I refer to the Delaware PBC amendments as “The Etsy Amendments” because I believe (without being sure) that a main motivation in passing these amendments was to make it easier for Etsy (among other companies) to become a Delaware PBC. These amendments are effective as of August 1, 2015.

As mentioned in a previous post, Etsy is a certified B corporation and a Delaware C-corporation. According to B Lab’s terms for certified B corporations, Etsy will have to convert to a Delaware PBC by August 1, 2017 or forfeit its certification. This assumes that B Lab will not change its requirements or make an exception for publicly-traded companies.

The amendments to the PBC law are summarized below:

  • Eliminates requirement of "PBC" or "Public Benefit Corporation" in the entity’s formal name. This amendment makes it easier and less costly for existing entities to convert, but the amendment also makes it more difficult for researchers (and the rest of the public) to track the PBCs. In addition to the cost of changing names, Rick Alexander notes in his article below that the previous naming requirement was causing issues when PBCs registered in other states because “[s]ome jurisdictions view the term as referring to nonprofit corporations. Other jurisdictions view the phrase ‘'PBC'’ as insufficient to signal corporate identity.”
  • Reduces amount of shareholders that must approve a conversion from a traditional corporation to a PBC from 90% to 2/3rds of shareholders. This amendment brings Delaware PBC law in line with most of the benefit corporation statutes and gives Etsy a more realistic shot at converting. The requirement in Delaware to convert from a PBC to a traditional corporation was already approval by 2/3rds of shareholders.
  • Provides a “market out” exception to appraisal rights when a corporation becomes a PBC. This amendment brings the Delaware PBC law in line with their general appraisal provision in DGCL 262. This amendment also means that Etsy shareholders would not receive appraisal rights if Etsy converts to a PBC.

Additional posts about the amendments are available below:

July 3, 2015 in Business Associations, Corporate Governance, Corporations, Delaware, Haskell Murray, Legislation, Social Enterprise | Permalink | Comments (0)

Thursday, July 2, 2015

Business School Legal Studies Professors on Twitter

Bridget Crawford (Pace Law) has posted an extensive list of law school professors on Twitter that is available here.

Previously, I compiled a list of business law professors, in both business schools and law schools, but to avoid overlapping with Bridget's list, I am only including business school legal studies professors in this updated list.

I will update the list from time to time. [Last updated - 7/2/15]

Perry Binder (Georgia State) – @Perry_Binder

Seletha Butler (Georgia Tech) – @ProfSButler

Kabrina Chang (Boston University) – @ProfessorChang

Peter Conti-Brown (Penn-Wharton) – @PeterContiBrown

Laura Dove (Troy) – @LauraRDove

Marc Edelman (CUNY-Baruch College) – @MarcEdelman

Jason Gordon (Georgia Gwinnett) – @JMGordonLaw 

Nathaniel Grow (Georgia) – @NathanielGrow

Enrique Guerra-Pujol (Central Florida) – @lawscholar

Lori Harris-Ransom (Caldwell) – @HarrisRansom

Laura Pincus Hartman (DePaul) – @LauraHartman

Haskell Murray (Belmont) – @HaskellMurray

David Orozco (Florida State) – @ProfessorOrozco

Eric Orts (Penn-Wharton)– @EricOrts

Marisa Pagnattaro (Georgia) – @pagnattaro

Joshua Perry (Indiana) – @ProfJoshPerry

Susan Samuelson (Boston University) – @bizlawupdate

Tim Samples (Georgia) – @TimRSamples

Inara Scott (Oregon State) – @NewEnergyProf

Adam Sulkowski (UMass-Dartmouth) – @adam_sulkowski

July 2, 2015 in Business School, Haskell Murray, Service, Technology, Web/Tech | Permalink | Comments (0)

Kelley School of Business at Indiana University - Law and/or Ethics Professor Positions

Kelley

The Kelley School of Business at Indiana University has multiple open positions in their Business Law and Ethics Department.

Kelley is well known in business school circles for having a strong legal studies program. Among the many fine faculty members are my ALSB mentor Jamie Prenkert (department chair) and BLPB guest-blogger Todd Haugh

Information about these positions is available after the break.

Continue reading

July 2, 2015 in Business School, Ethics, Haskell Murray, Jobs | Permalink | Comments (0)

Friday, June 26, 2015

Imagination Library, Nudges, and Choice Architecture

Library

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.

June 26, 2015 in Books, CSR, Haskell Murray | Permalink | Comments (0)

Friday, June 19, 2015

Summer Reading: Conscious Capitalism

Conscious

Recently, I finished reading Conscious Capitalism, written by Whole Foods Market co-CEO John Mackey and Babson College professor Raj Sisodia.

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.   

June 19, 2015 in Books, Business Associations, Corporate Governance, Corporations, CSR, Haskell Murray, Social Enterprise | Permalink | Comments (3)

Monday, June 15, 2015

Video of Fordham Law School Panel on "Fee Shifting in Shareholder Litigation"

On June 11, 2015, the Delaware House of Representatives joined the Delaware Senate in passing a bill that would prohibit fee-shifting bylaws by Delaware stock corporations. The bill awaits signature by Delaware Governor Jack Markell. Nonetheless, the panel provides a nice debate, between practicing attorneys, and is available here. The information from the Chancery Daily is below. 

Fordham Law School hosted a panel on Fee Shifting in Shareholder Litigation, featuring three members of the corporate law council of the Delaware State Bar Association, which submitted proposed amendments to the Delaware General Corporation Law that would preclude the adoption of fee-shifting provisions in corporate instruments, on Thursday, March 26, 2015.  A webcast video of the panel is now available online here.
 
Moderated by:

Professor Sean J. Griffith - Fordham Law School

Panelists:

Frederick Alexander - Morris Nichols Arsht & Tunnell
Chris Cernich - Institutional Shareholder Services
Kurt Heyman - Proctor Heyman Enerio
Mark Lebovitch - Bernstein Litowitz Berger & Grossman
Norman Monhait - Rosenthal Monhait & Goddess
Andrew Pincus - Mayer Brown

June 15, 2015 in Business Associations, Corporate Governance, Corporations, Delaware, Haskell Murray | Permalink | Comments (0)

Friday, June 12, 2015

Oregon Benefit Companies - Online List

Oregon has done those interested in social enterprise a great service by posting a list of their benefit companies online. Oregon also has a nice page about becoming an Oregon benefit company.

By my count, the version updated 6/3/15, lists the following number of entities (for a total of 500 benefit companies):

  • 1 professional benefit corporation 
  • 74 benefit corporations 
  • 425 benefit LLCs

Oregon is one of a very few states that provides for the formation of benefit LLCs, in addition to benefit corporations. As you can see, the benefit LLCs are a good bit more popular than the benefit corporations, likely because most social enterprises are small, closely-held entities that should probably be LLCs instead of corporations.  

LLC law is generally flexible enough to allow a social purpose and Oregon's corporation law expressly allows corporations to be formed for a social purpose, so the main draw seems to be branding/signaling based rather than law based.

These are still relatively small numbers in the grand scheme, but it was a fairly short time ago that there were fewer than 500 total benefit companies nationwide.    

June 12, 2015 in Business Associations, Haskell Murray, Social Enterprise | Permalink | Comments (0)

Wednesday, June 10, 2015

APDGE Conference │ Toulouse, France │ December 3-4, 2015

Recently, I received notice of the following call for papers from the French association of Law Professors in Business Schools – the Association des Professeurs de Droit des Grandes Ecoles (“APDGE”).  The theme of the conference is "Governance and Compliance in Companies: Constraints or Opportunities." Additional information is available below and at the conference website:

-------------------

TBS PDD

 3rd Conference of the Association of Law Professors of Les Grandes Ecoles/Business Schools, organized by Toulouse Business School

 

CALL FOR PAPERS

"Governance and Compliance in Companies: Constraints or Opportunities?"

December 3-4, 2015 – Toulouse Business School

Toulouse, France

Conference Website: http://www.tbs-education.fr/en/apdge-conference/

 

The taking into account of new legal rules (whether in Company Law, Banking Law, Tax Law, Environmental Law, Employment Law, Consumer Law, Digital Law, or in other fields of Law), involves increased attention to Governance and Compliance by companies, as well as by research professors.   The position of Chief Compliance Officer has become widespread within major companies, as have charters, codes of good conduct and codes of good governance.  Consequently, it is appropriate to look at Governance and Compliance in companies and to investigate whether or not they form constraints or opportunities for companies.    To what extent does the appearance of new legal and regulatory provisions represent new constraints for companies? On the contrary, may opportunities be detected in these practices in order to deal with upheavals in the Law?  What skills are necessary for lawyers in this new environment?  What are the roles of soft law and of Corporate Social Responsibility (CSR) in this context?

These two research days propose to focus discussion on constraints and opportunities for companies in the development of the new rules and practices of Governance and Compliance.

This Call for Papers seeks to explore the following questions (as illustrations, not limitations):

  • The links between Governance and Compliance, on the one hand, and Corporate Social Responsibility (CSR), on the other hand;
  • Programs to be put in place for a better compliance;
  • The role of lawyers  in Governance and Compliance;
  • Opportunities for good Governance and proper Compliance  for companies;
  • The impact of foreign laws on Governance (for example, the Sarbanes-Oxley Act);
  • The legal risks in a breach of compliance;
  • Legal monitoring and anticipation of new legal and regulatory constraints;
  • Government procurement and a company's history of Compliance ;
  • The interface between internal control (internal auditing, reporting, etc.) and the Law;
  • The legal challenges of whistleblowing;
  • The strategic role of Compliance;
  • The interface between company lawyers, external advisors and operational staff in Governance and Compliance;
  • The theory of groups of parent companies or subsidiaries and Compliance;
  • Control of the chain of sub-contractors and subsidiaries and Compliance;
    • Analysis of the effectiveness of soft law in Compliance;
    • Investors and Governance;
    • The comparative study of Governance. 

A publication of the best papers is foreseen.

Key Dates

Proposals: June 30, 2015

Full Text: September 1, 2015

Author Notification by the Scientific Committee: October 12, 2015

[More information after the break]

Continue reading

June 10, 2015 in Business Associations, Business School, Call for Papers, Conferences, Haskell Murray | Permalink | Comments (0)

Friday, June 5, 2015

Anti-Consumerism as Corporate Strategy

The New Yorker recently ran an interesting article entitled Patagonia’s Anti-Growth Strategy. Patagonia is a certified B corporation and a California benefit corporation.

As a customer, Patagonia is my favorite company for casual/outdoor clothing, and one of my favorite companies in any industry. Initially, I thought Patagonia's clothes were insanely expensive, but their clothes have been much cheaper on a “cost-per-wear” basis than any other clothes I have bought. In an age of cheap products and rampant consumerism, Patagonia is striking a chord with those who wish to buy fewer, quality products.

A taste of the article follows, but go read the entire thing.

The company’s anti-materialistic stance ramped up on Black Friday, 2011, with a memorable full-page advertisement in the Times that read, “Don’t Buy This Jacket.” The ad’s text broke down the environmental costs of the company’s top-selling R2 fleece sweater and asked consumers to think twice before buying it or any other product. The attention the ad received helped to bump Patagonia’s 2012 sales significantly. . . . Patagonia is trying second-hand-clothing sales at its shop in Portland, Oregon, and has made product repair and recycling a growing part of its business model. It recently invested in Yerdle—a Web startup whose stated mission is to reduce new-product purchases by twenty-five per cent—as a way for people, and even the company itself, to swap or give away used Patagonia gear.

Despite being a customer for about two decades, I haven’t needed the Patagonia repair services yet, but I love the idea.  

As the article above mentions, “[a]ll of this would be jet fuel for the engines of modern cynicism, if not for the fact that Patagonia, a privately owned corporation now in its fifth decade, has a distinguished record of environmental philanthropy and investment.” Patagonia may eventually experience mission drift, but the trust they have created with their customers is invaluable. While Patagonia’s anti-consumerism stance may seem to be against the firm's self-interest, “anti-consumerism is clearly helping to build the Patagonia brand. Indeed, the company is seeing double-digit annual growth.”

Patagonia’s founder Yvon Chouinard has two books worth reading by those interested in social business: Let My People Go Surfing and The Responsible Company.

June 5, 2015 in Business Associations, Corporate Governance, Corporations, CSR, Haskell Murray, Social Enterprise | Permalink | Comments (2)

Thursday, June 4, 2015

Southeastern Academy of Legal Studies in Business Annual Conference │ Atlanta, GA │ Nov. 12-14, 2015

I just signed up for the SEALSB Annual Conference, which will be held in Atlanta, GA from November 12 through 14. I have attended and presented at the SEALSB Annual Conference each of the past two years. Both years we had a good group of professors.

The paper presentations are not limited by legal subject area, and the presentations in past years have covered issues in corporate governance, constitutional law, employment law, international law, sports and the law, franchise law, and other areas.

The conference is intended for “teachers and scholars in the fields of business law, legal environment, and law-related courses outside of professional law schools.” Most participants teach legal studies in business schools. I am told that those who interested in or exploring teaching legal studies outside of a law school are also welcome.

Conference registration information is available here

June 4, 2015 in Business Associations, Business School, Conferences, Haskell Murray, Research | Permalink | Comments (0)

Friday, May 29, 2015

The Economics of the TV Show Nashville

Earlier this month, The Tennessean reported that the state of Tennessee approved $8 million of incentives for the fourth season of ABC's show Nashville. The city of Nashville also plans to chip in about $500,000.  According to the article, the "show spends about $20 million each season on local labor."

Economic incentives seem to be increasingly common, but this arrangement is interesting for a few reasons. First, this is an arrangement that not only brings jobs to town, but also brings publicity and tourists. Second, the lion share of the incentives appear to be coming from the state, but the lion share of the benefits seem to be directed at the city of Nashville - causing some in other parts of the state to complain

Some businesses, like the Bluebird Cafe, are featured regularly on the show, and I wonder whether they pay for that privilege. I don't think they do, but have not been able to find out for sure. 

My wife and I watch the show, if only because we like seeing our city on TV. Nashville is a wonderful place, has been called an "it city" and the "south's red hot town." Even the New York Times did a glowing article on the city Nashville during the tenure of ABC's show. The job market and real estate are both booming in Nashville.

I don't know how much of this success, if any, is due to the show about Nashville, but things do seem to be going well here...except for the increasing traffic. Product placement has been on the rise in media for some time now; perhaps we will see more city, state, and business placement over time.  

May 29, 2015 in Current Affairs, Haskell Murray, Jobs, Television | Permalink | Comments (2)

Friday, May 22, 2015

Summer Reading and Listening

Frankel OConnor Yale

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.  

May 22, 2015 in Books, Haskell Murray | Permalink | Comments (0)

Thursday, May 21, 2015

Moultrie and Brooks on Defining a Proper Purpose for Books and Records Actions in Delaware

My former research assistant Sam Moultrie and his colleague Andrea Schoch Brooks have authored a short article entitled "Defining a Proper Purpose for Books and Records Actions in Delaware."

The article unpacks two recent Delaware books and records cases: AbbVie and Citigroup. Worthwhile reading for those who wish to stay current on this area of the law. 

May 21, 2015 in Business Associations, Corporations, Delaware, Haskell Murray | Permalink | Comments (0)

Friday, May 15, 2015

Providing Low-Wage Earners with Predictable Schedules

Recently, I have seen a fair bit written about states, the federal government, and individual firms raising or potentially raising the minimum wage for the lowest paid workers.

Low pay, however, is only one of many problems facing low-wage earners.

After hearing Charlotte Alexander (Georgia State) present on this co-authored paper - Stabilizing Low-Wage Work: Legal Remedies for Unpredictable Work Hours and Income Instability – I have become convinced that unpredictable work hours is a significant issue. The article is well worth reading. 

Unpredictable work hours can be problematic for many people – attorneys in BigLaw for example – but low-wage earners do not have disposable income to throw at the problem. Childcare and transportation, for example, become even more of a challenge when work hours are not stable and not set in advance.  Unpredictable, inconsistent work hours also hamper economic mobility by making it difficult or impossible to take classes or get a second job.    

For more on this issue, listen to MIT Operations Management Professor Zeynep Ton’s talk at the Aspen Institute. Her discussion of Mercadona, a low-cost supermarket based in Spain (discussion starts at 14:50), and QuickTrip, a convenience store with gas stations (discussion starts at 17:30) was quite interesting. Corporate social responsibility often seems dominated by high-end companies like Patagonia and Whole Foods. It is easier to be socially responsible when you are charging $700 for a jacket or 39% more on certain food items (according to one study in Boston). Mercadona, however, offers some of the lowest prices in Spain. Mercadona employees receive their schedules one month in advance and have stable schedules.  Mercadona also pays almost double the minimum wage (plus a bonus). As a result, Mercadona’s turnover is an extremely low 3.4%.  Likewise, QuickTrip seems to compete well on price, but also appears to take relatively good care of its employees.

Individual firms could and should address this issue of unpredictable work hours voluntarily, but the market may prove ineffective in this area and legislative action may be needed.

May 15, 2015 in Business Associations, CSR, Haskell Murray, Social Enterprise | Permalink | Comments (1)

Friday, May 8, 2015

8th Annual Bridge to Excellence Nonprofit Conference │ May 12, 2015 │ Nashville, TN

CNM

On May 12, 2015, I will present at a breakout session of the Center for Nonprofit Management's 8th Annual Bridge to Excellence Nonprofit Conference. My talk will focus on the legal issues facing entities with multiple bottom lines. 

If interested, you can register here.

As you can tell from the conference description, this conference is designed for nonprofit and community leaders. From the conference schedule, it appears that I will be the only professor presenter. While I enjoy academic conferences, and find them useful, I also think it is important for professors to engage with practitioners. Professors should share the knowledge they have uncovered and should also listen to the current, practical concerns. 

May 8, 2015 in Business Associations, Conferences, Entrepreneurship, Haskell Murray, Social Enterprise | Permalink | Comments (0)

Thursday, May 7, 2015

Legal Issues in Impact Investing: At Home and Abroad │ May 11, 2015 │ Washington D.C.

This coming Monday, I will be presenting – virtually – at the above titled conference. My piece of the presentation will cover my recent research on benefit corporation reporting.

Further information is available here and reproduced below. Personally, I am looking forward to hearing from the many impressive speakers, including Sara Burgess, the Regulator of Community Interest Companies in the UK.

May 11, 2015

08:00 AM - 06:00 PM ET

 

Morgan Lewis, in conjunction with the Impact Investing Legal Working Group, invites you to join us for an exclusive all-day conference featuring panels of leading lawyers who work in the area of impact investing—in business, academia, government, multilateral development institutions, and nonprofit organizations and foundations.

 

Topics will include:

How are investors aggregating capital for impact investing?

What are the newest social finance innovations in impact investing?

How can we build a robust legal community of practice in impact investing?

How can we advance the development of regulatory regimes and government policies that promote impact investing?

 

Details

8:00 - 8:30 AM | Registration

8:30 - 6:00 PM | Program

6:00 PM | Networking reception

 

View the agenda >>

 

Credit

CLE credit in CA (1.25 hours), FL, IL, MA, NY, NJ, PA, VA, and TX is currently pending approval.

 

For more information/registration

Please contact Gail Sobha Lynes at +1.617.951.8607 or gail.sobhalynes@morganlewis.com.

 

May 7, 2015 in Business Associations, Conferences, Entrepreneurship, Haskell Murray, International Business, Social Enterprise | Permalink | Comments (0)

Wednesday, May 6, 2015

Means on Wealth Inequality and Family Businesses

Benjamin Means (South Carolina) recently posted a new article to SSRN entitled Wealth Inequality and Family Businesses. The article is forthcoming in the Emory Law Journal.

This article builds on Ben's previous, extensive and well-regarded research on family businesses. Ben's analysis of the relationship between family businesses and wealth inequality is carefully done and thought-provoking. The abstract is posted below, and I recommend reading the entire article.

Wealth inequality endangers democratic values and calls for a public response. This Article contends that family businesses merit special scrutiny because they control vast amounts of private wealth and combine two of society’s most important economic institutions: family and business. Accordingly, family businesses implicate concerns regarding both inherited wealth and the concentration of economic power made possible by the corporate form.

 

Despite their economic significance, little has been done to investigate whether family businesses contribute to wealth inequality. This Article offers the first legal, and one of the only academic, treatments of the topic and shows that family businesses play a double role. On the one hand, family businesses reinforce existing disparities in wealth and opportunity. Heirs, after all, stand to benefit from the hard work of previous generations. On the other hand, family businesses can be a powerful antidote to inequality, disrupting entrenched class hierarchies and creating opportunities for individuals, families, and ethnic communities.

 

This Article concludes that whether family businesses produce net social costs or benefits depends crucially on two principal factors. First, to the extent there is a lack of public investment in social mobility, family businesses can increase the distribution of wealth by providing needed investments in human capital. Second, to the extent the rewards of capitalism are not widely shared, family businesses can offer a source of opportunity, not just for family members, but also for employees and the communities in which family businesses operate. Thus, family businesses should not be viewed in isolation; a comprehensive response to the problem of wealth inequality must involve the state, the family, and the market.

May 6, 2015 in Business Associations, Entrepreneurship, Haskell Murray | Permalink | Comments (0)

Friday, May 1, 2015

Legal Studies Professor Hires for Fall 2015

PrawfsBlawg has compiled an entry-level hiring report for law professors a number of years. Brian Leiter tracks law professor lateral hires with tenure. These lists serve at least two purposes:

  • welcoming new hires into the academy (or to their new positions) and
  • providing a summary of the state of the legal academic hiring market

As a curious law firm associate, with hopes of an academic career, lists of this type were especially valuable in shining light on the qualifications of new academic hires.

While the lists of law professor hires seem well-covered elsewhere, I have not seen similar hiring lists for legal studies professor hires in business schools. For this first edition, I am simply pasting the material sent to me via e-mail or in the comments. I will cover full-time entry level or lateral hires in this list, but may split them into separate posts in future years. I will continue to update this list periodically until the new hires start in August, as some business schools may still be hiring.

Updated 5/1/2015

Details below the page break.

Continue reading

May 1, 2015 in Business School, Haskell Murray, Jobs | Permalink | Comments (1)

Guest Blogger: Todd Haugh

Thaugh_med

Professor Todd Haugh (Indiana University - Kelley School of Business) will be joining us as a guest blogger for the month of May. Todd is an assistant professor of business law & ethics and has focused his research on white collar crime and sentencing. His most recent work deals with "the financial crisis and how white collar offenders rationalize their conduct." We welcome Todd to the Business Law Prof Blog and look forward to his posts.   

May 1, 2015 in Business School, Ethics, Haskell Murray | Permalink | Comments (2)

For-Profit and Foundation-Owned

Almost three years ago, I helped organize a conference on social enterprise law. (The law review members, especially Rachel Bauer and Sam Moultrie, were responsible for most of the organizing and did an excellent job). 

My co-bloggers Joan Heminway and Marcia Narine were among the speakers.

Also joining us was Michael Pirron of Impact Makers, one of the first certified B corporations in Virginia. While Impact Makers was a certified B corporation at the time of the conference, it was organized as a Virginia nonstock corporation; now Impact Makers is organized as a benefit corporation. Michael did an excellent job serving as a panelist and the keynote speaker.

Recently, I saw Michael back in the news. He transferred ownership of his company (valued at approximately $11.5 million) to two foundations. As Michael mentioned to me over e-mail, this was not a radical departure from his previous business model for Impact Makers. Previously, Impact Makers donated 100% of its profits to area charities, so this move just formalized their previous commitment.  Impact Makers has given away approximately $1 million to date.

At the University of Connecticut social enterprise and entrepreneurship conference I attended and presented at last week, Mike Brady (Greyston Bakery) and Jeff Brown (Newman's Own) presented. Jeff called Newman's Own a "grandfather of social enterprise" Both companies started business in 1982, well before heavy use of the term "social enterprise."

Also, both Greyston Bakery and Newman's Own appear to have adopted a structure where a foundation owns the stock of their for-profit company. You can learn a bit more about the structure of Newman's Own here. Greyston Bakery's annual reports are here and you can view a video about Greyston Bakery (and their client Ben & Jerry's).

From a legal perspective, Greyston Bakery and Impact Makers are benefit corporations, under New York and Virginia law respectively (in addition to being certified B corporations.)  Newman's Own, however, is a traditional c-corporation. With foundations owning 100% of the stock, the benefits of using the benefit corporation form are likely limited. There still may be some branding value and most benefit corporation statutes require consideration of a broad group of stakeholders, which might prevent the foundation from focusing on a smaller subset of stakeholders.  That said, shareholders are the one expected to bring lawsuits to enforce this consideration requirement in the benefit corporation statutes, so as a practical matter, the benefit corporation and c-corporation forms may operate similarly when wholly-owned by one or more foundations. 

May 1, 2015 in Business Associations, Corporations, Entrepreneurship, Haskell Murray, Social Enterprise | Permalink | Comments (0)