Tuesday, October 29, 2024

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Friday, October 7, 2022

How to Contract Conference- February 16-17 in Miami

I had originally planned to post Pt. 2 of the blog post I did a couple of weeks ago, but this announcement is time sensitive.

I'm thrilled to announce that the Transactional Skills Program at the University of Miami School of Law is partnering with Laura Frederick for the second How to Contract conference. It's time sensitive because we are considering holding a side event with a contract drafting and negotiation competition for law students if there's enough interest. If you think you would be interested, please email me at [email protected].

For lawyers, there are virtual and live options for the contract conference. I've cut and pasted from the website so you can see why you should come to sunny Miami (and it won't be hurricane season):

It is not about the mega deals.

ContractsCon is about the contracts you work on EVERY DAY. We want to help you learn how to draft and negotiate the deals you see all the time.

Because for every 100-page specialized contract sent to outside counsel, there are thousands of smaller but important ones that in-house counsel and professionals do day in and day out.

ContractsCon focuses on how we manage risk and make the tough decisions with less time and information than we need.

It is not a summary of recent case law.

ContractsCon is about providing actionable advice to help you do the work that you have sitting in your inbox RIGHT NOW.

It's not about case names or citations and we don't get into academic explanations.

ContractsCon focuses on the real-world expertise from experienced practitioners that you need to improve your contract skills and expertise and become better at drafting and negotiating in the real world.

It is not going to put you to sleep.

ContractsCon is about the fun and awesomeness of contracts. We are organizing it to be a true lovefest for everything contracts.  

Why not combine learning about contracts with having fun?

You'll meet other lawyers and professionals passionate about contract drafting and negotiating. Our sessions and workshops feature contracting superstars who love what they do and will share their excitement with you. Plus we're planning a ton of activities on-site and online to keep you engaged. 

ContractsCon is designed for in-house lawyers and professionals who want to learn:

  • the insights and techniques needed to handle the commercial contracts filling their inbox every day,
  • how experienced lawyers manage risk, work efficiently, and make the hard decisions in challenging circumstances,
  • WHAT to say, WHY to say it that way, and HOW to reach the best-negotiated deal you can with your contract counterparties.

Virtual ticket holders get access to 6 HOURS of no-fluff practical contract training by experienced practicing lawyers.

People who attend in person in Miami get 12 HOURS of training, including 6 hours of interactive skills workshops.

I hope to see you in Miami in a few months. Don't forget to follow Laura Frederick on LinkedIn for great contract drafting tips and to let me know whether you and your students might be interested in participating in a contract drafting competition. 

 

 

 

 

 

 

October 7, 2022 in Commercial Law, Conferences, Contracts, Corporations, Law Firms, Law School, Lawyering, LLCs, M&A, Marcia Narine Weldon, Negotiation, Teaching, Unincorporated Entities | Permalink | Comments (0)

Tuesday, September 14, 2021

Campbell University - Norman A. Wiggins School of Law - Hiring

Campbell University's Norman A. Wiggins School of Law in Raleigh, NC is hiring for two positions. They are especially interested in candidates in the following areas: (1) business organizations, (2) commercial law (including sales law), and/or contracts. Details here or after the break. 

Continue reading

September 14, 2021 in Business Associations, Commercial Law, Contracts, Haskell Murray, Jobs | Permalink | Comments (0)

Monday, October 26, 2020

The Sharing Economy, Autonomous Vehicles, and Such . . . .

Although my UT Law colleague Greg Stein is perhaps most well known for his work in the area of real estate law (development, finance, land use, etc.--see his SSRN page here), of late, he has been focusing increased attention on issues at the intersection of technological innovation and economic enterprise.  I have been interested in and engaged by this new twist to his research, thinking, and writing.  This post promotes two works he has completed that occupy this scholarly space, the first of which was recently published in the Brooklyn Law Review and the second of which is forthcoming in the Florida State University Law Review.

The Brooklyn Law Review piece is entitled "Inequality in the Sharing Economy."  The SSRN abstract follows.

The rise of the sharing economy benefits consumers and providers alike. Consumers can access a wider range of goods and services on an as-needed basis and no longer need to own a smaller number of costly assets that sit unused most of the time. Providers can engage in profitable short-term ventures, working on their own schedule and enjoying many new opportunities to supplement their income.

Sharing economy platforms often employ dynamic pricing, which means that the price of a good or service varies in real time as supply and demand change. Under dynamic pricing, the price of a good or service is highest when demand is high or supply is low. Just when a customer most needs a good or service – think bottled water after a hurricane – dynamic pricing may price that customer out of the market.

This Article examines the extent to which the rise of the sharing economy may exacerbate existing inequality. It describes the sharing economy and its frequent use of dynamic pricing as a means of allocating scarce resources. It then focuses on three types of commodities – necessities, inelastic goods and services, and public goods and services – and discusses why the dynamic pricing of these three types of commodities raises the greatest inequality concerns. The Article concludes by asking whether some type of intervention is warranted and examining the advantages and drawbacks of government action, action by the private sector, or no action at all.

The title of the article that is forthcoming in the Florida State University Law Review is "The Impact of Autonomous Vehicles on Urban Land Use Patterns."  The SSRN abstract for this article is set forth below.

Autonomous vehicles are coming. The only questions are how quickly they will arrive, how we will manage the years when they share the road with conventional vehicles, and how the legal system will address the issues they raise. This Article examines the impact the autonomous vehicle revolution will have on urban land use patterns.

Autonomous vehicles will transform the use of land and the law governing that valuable land. Automobiles will drop passengers off and then drive themselves to remote parking areas, reducing the need for downtown parking. These vehicles will create the need for substantial changes in roadway design. Driverless cars are more likely to be shared, and fleets may supplant individual ownership. At the same time, people may be willing to endure longer commutes, working while their car transports them.

These dramatic changes will require corresponding adaptations in real estate and land use law. Zoning laws, building codes, and homeowners’ association rules will have to be updated to reflect shifting needs for parking. Longer commutes may create a need for stricter environmental controls. Moreover, jurisdictions will have to address these changes while operating under considerable uncertainty, as we all wait to see which technologies catch on, which fall by the wayside, and how quickly this revolution arrives. This Article examines the legal changes that are likely to be needed in the near future. It concludes by recommending that government bodies engage in scenario planning so they can act under conditions of ambiguity while reducing the risk of poor decisions.

These articles offer interesting perspectives on the need for and desirability of legal or regulatory change as a response to existing and inevitable ripple effects of the new ways we engage with technology and use it in our lives--in commerce and in the more personal aspects of our existence--whether those effects are felt in the socio-economic landscape or the land use realm.  Many business law academics have been researching and writing about these relationships between and among legal and regulatory rules, technological innovation, and shifts in commercial and personal behavioral patterns.  Greg's contributions to this body of work are both compelling and thoughtful.  I appreciate his insights.

October 26, 2020 in Commercial Law, Joan Heminway, Law and Economics, Real Property, Technology | Permalink | Comments (0)

Monday, August 3, 2020

Drake Hiring Announcements - Technology and Law

Drake University invites applications from entry level and lateral candidates for a tenure-track Assistant/Associate Professor of Law position beginning in the 2021-22 academic year.  We are interested in candidates with demonstrated interest or experience in Technology Law. Applicants must hold a J.D. degree (or the equivalent) and should have a record of academic excellence, substantial academic or practice experience, and a passion for teaching. Appointment rank will be determined commensurate with the candidate’s qualifications and experience.

In addition to service and scholarship, this position involves teaching courses such as Legal/Ethical Issues in Technology, Technology Law, Privacy Law, and related areas in both the Law School and the College of Arts & Sciences as well as advising law and undergraduate students and serving as a University resource on technology legal issues.

Drake University sustains a vibrant intellectual culture, and Des Moines has been recognized as the Best Place to Live (US News), the Best Place for Young Professionals (Forbes), and as the #1 Best U.S. City for Business (MarketWatch).

Drake University is an equal opportunity employer and actively seeks applicants who reflect the nation’s diversity.  No applicant shall be discriminated against on the basis of race, color, national origin, creed, religion, age, disability, sex, gender identity, sexual orientation, genetic information or veteran status. Diversity is one of Drake’s core values and applicants need to demonstrate an ability to work with individuals and groups of diverse backgrounds.

Confidential review of applications will begin immediately. Applications (including a letter of interest, a complete CV, teaching evaluations (if available), a diversity statement, and the names and addresses of at least three references) should be sent to Professor Ellen Yee, Chair, Faculty Appointments Committee, Drake University Law School, 2507 University Ave., Des Moines, IA 50311 or e-mail: [email protected].

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Drake University Law School invites applications from entry level and lateral candidates for a tenure-track or tenured Assistant/Associate/Professor of Law position beginning in the 2021-22 academic year.  We are especially interested in candidates with demonstrated interest or experience in Contracts, Sales, Tax, Intellectual Property, and Family Law. Applicants must hold a J.D. degree (or the equivalent) and should have a record of academic excellence, substantial academic or practice experience, and a passion for teaching. Appointment rank will be determined commensurate with the candidate’s qualifications and experience.

Drake University Law School sustains a vibrant intellectual culture, and Des Moines has been recognized as the Best Place to Live (US News), the Best Place for Young Professionals (Forbes), and as the #1 Best U.S. City for Business (MarketWatch). The Law School features innovative and nationally recognized programs in agricultural law, constitutional law, legal research and writing, and practical training.

Drake University is an equal opportunity employer and actively seeks applicants who reflect the nation’s diversity.  No applicant shall be discriminated against on the basis of race, color, national origin, creed, religion, age, disability, sex, gender identity, sexual orientation, genetic information or veteran status. Diversity is one of Drake’s core values and applicants need to demonstrate an ability to work with individuals and groups of diverse socioeconomic, cultural, sexual orientation, disability, and/or ethnic backgrounds.

Confidential review of applications will begin immediately. Applications (including a letter of interest, a complete CV, teaching evaluations (if available), a diversity statement, and the names and addresses of at least three references) should be sent to Professor Ellen Yee, Chair, Faculty Appointments Committee, Drake University Law School, 2507 University Ave., Des Moines, IA 50311 or e-mail: [email protected].

August 3, 2020 in Commercial Law, Contracts, Ethics, Intellectual Property, Joan Heminway, Jobs, Technology | Permalink | Comments (0)

Monday, September 23, 2019

Commercial Law Position Announcement: University of Idaho

The University of Idaho College of Law seeks to fill a tenure-track or tenured faculty position beginning in the Fall of 2020 in the area of Commercial Law for its Moscow location. Both entry-level and lateral candidates are encouraged to apply. In addition to courses in Sales and Property Security, the faculty member will be expected to teach two additional courses – which may include Bankruptcy, Payment Systems, Real Estate Transactions, and/or State Debtor-Creditor Law – according to the interest of the faculty member and the needs of the College of Law. Candidates must have (1) a J.D. from an ABA-accredited school or the equivalent; (2) a distinguished academic record; (3) a record or the promise of teaching excellence; (4) a record or the promise of scholarly productivity; and (5) a record or the promise of expertise in the area of Commercial Law. Preference will be given to candidates with (1) post-J.D. practice, clerking, or teaching experience; and (2) post-J.D. experience related to Commercial Law and other courses listed above. Situated in the beautiful Pacific Northwest, the University of Idaho is a comprehensive research institution. Information about the College of Law is available on its website at https://www.uidaho.edu/law. Interested candidates should apply online athttps://uidaho.peopleadmin.com/postings/27297. Questions about the position should be directed to David Pimentel, Chair of the Faculty Appointments Committee, at [email protected]. The University of Idaho is an affirmative action, equal opportunity employer.

[Hat tip to Aliza Plener Cover, Associate Professor at the University of Idaho College of Law, for highlighting this opportunity.]

September 23, 2019 in Commercial Law, Joan Heminway, Jobs | Permalink | Comments (1)

Sunday, August 12, 2018

Why Lawyers, Law Professors, and Judges Should Care About Blockchain

We’re a month away from our second annual Business Law Professor Blog CLE, hosted at the University of Tennessee on Friday, September 14, 2018. We’ll discuss our latest research and receive comments from UT faculty and students. I’ve entitled my talk Beyond Bitcoin: Leveraging Blockchain for Corporate Governance, Corporate Social Responsibility, and Enterprise Risk Management, and will blog more about that after I finish the article. This is a really long post, but it’s chock full of helpful links for novices and experts alike and highlights some really interesting work from our colleagues at other law schools.

Two weeks ago, I posted some resources to help familiarize you with blockchain. Here’s a relatively simple definition from John Giordani at Forbes:

Blockchain is a public register in which transactions between two users belonging to the same network are stored in a secure, verifiable and permanent way. The data relating to the exchanges are saved inside cryptographic blocks, connected in a hierarchical manner to each other. This creates an endless chain of data blocks -- hence the name blockchain -- that allows you to trace and verify all the transactions you have ever made. The primary function of a blockchain is, therefore, to certify transactions between people. In the case of Bitcoin, the blockchain serves to verify the exchange of cryptocurrency between two users, but it is only one of the many possible uses of this technological structure. In other sectors, the blockchain can certify the exchange of shares and stocks, operate as if it were a notary and "validate" a contract or make the votes cast in online voting secure and impossible to alter. One of the greatest advantages of the blockchain is the high degree of security it guarantees. In fact, once a transaction is certified and saved within one of the chain blocks, it can no longer be modified or tampered with. Each block consists of a pointer that connects it to the previous block, a timestamp that certifies the time at which the event actually took place and the transaction data.

These three elements ensure that each element of the blockchain is unique and immutable -- any request to modify the timestamp or the content of the block would change all subsequent blocks. This is because the pointer is created based on the data in the previous block, triggering a real chain reaction. In order for any alterations to happen, it would be necessary for the 50%-plus-one of the network to approve the change: a possible but hardly feasible operation since the blockchain is distributed worldwide between millions of users.

In case that wasn’t clear enough, here are links to a few of my favorite videos for novices. These will help you understand the rest of this blog post.

To help prepare for my own talk in Tennessee, I attended a fascinating discussion at SEALS on Thursday moderated by Dean Jon Garon of Nova Southeastern University Shepard Broad College of Law called Blockchain Technology and the Law.

For those of you who don’t know how blockchain technology can relate to your practice or teaching, I thought I would provide a few questions raised by some of the speakers. I’ve inserted some (oversimplified)links for definitions. The speakers did not include these links, so if I have used one that you believe is incomplete or inaccurate, do not attribute it to them.

Professor Del Wright, University of Missouri-Kansas City School of Law;

Del started the session by talking about the legal issues in blockchain consensus models. He described consensus models as the backbones for users because they: 1) allow users to interact with each other in a trustless manner; 2) ensure the integrity of the ledger in both normal and adversarial situations; and 3) create a “novel variety of networks with extraordinary potential” if implemented correctly. He discussed both permissioned (e.g. Ripple) and permissionless (Bitcoin) systems and how they differ. He then explained Proof of Work blockchains supported by miners (who solve problems to add blocks to the blockchain) and masternodes (who provide the backbone support to the blockchain). He pointed out how blockchains can reduce agency costs and problems of asymmetrical information and then focused on their utility in financial markets, securities regulation, and corporate governance. Del compared the issues related to off-chain governance, where decisionmaking first takes place on a social level and is then actively encoded into the protocol by the developers (used by Bitcoin and Ethereum) to on-chain governance, where developers broadcast their improvement protocols on-chain and then, once approved, those improvements are implemented into the code. He closed by listing a number of “big unanswered issues” related to regulatory guidance, liability for the performance of the technology and choice of consensus, global issues, and GDPR and other data privacy issues.

Professor Catherine Christopher, Texas Tech University School of Law;

Catherine wants to help judges think about smart contracts. She asked, among other things, how judges should address remedies, what counts as substantial performance, and how smart contract audits would work. She questioned whether judges should use a consumer protection approach or instead follow a draconian approach by embracing automation and enforcing smart contracts as drafted to discourage their adoption by those who are not sophisticated enough to understand how they work.

Professor Tonya Evans, University of New Hampshire School of Law (follow her on Twitter; see her blog on blockchain here);

Tonya focuses on blockchain and intellectual property. Her talked raised the issues of non-fungible tokens generated through smart contracts and the internet of value. She used the example of cryptokitties, where players have the chance to collect and breed digital cats. She also raised the question of what kind of technology can avoid infringement. For more on how blockchain can disrupt copyright law, read her post here.

Professor Rebecca Bratspies, CUNY School of Law;

In case you didn’t have enough trust issues with blockchain and cryptocurrency, Rebecca’s presentation focused on the “halo of immutability” and asked a few central questions: 1) why should we trust the miners not to collude for a 51% attack 2) why should we trust wallets, which aren’t as secure as people think; and 3) why should we trust the consensus mechanism? In response, some members of the audience noted that blockchain appeals to a libertarian element because of the removal of the government from the conversation.

Professor Carla Reyes, Michigan State University College of Law- follow her on Twitter at Carla Reyes (@Prof_CarlaReyes);

Carla talked about crypto corporate governance and the potential fiduciary duties that come out of thinking of blockchains as public trusts or corporations. She explained that governance happens on and off of the blockchain mechanisms through social media outlets such as Redditt. She further noted that many of those who call themselves “passive economic participants” are actually involved in governance because they comment on improvement processes. She also noted the paradox that off chain governance doesn’t always work very well because participants don’t always agree, but when they do agree, it often leads to controversial results like hard forks. Her upcoming article will outline potential fiduciaries (miner and masternode operators for example), their duties, and when they apply. She also asked the provocative question of whether a hard fork is like a Revlon event.

Professor Charlotte Tschider, William Mitchell College of Law (follow her on Twitter);

As a former chief privacy officer, I have to confess a bias toward Charlotte’s presentation. She talked about blockchain in healthcare focusing on these questions: will gains in cybersecurity protection outweigh specific issues for privacy or other legal issues (data ownership); what are the practical implications of implementing a private blockchain (consortium, patient-initiated, regulatory-approved); can this apply to other needed uses, including medical device applications; how might this technology work over geographically diverse regulatory structures; and are there better applications for this technology (e.g. connected health devices)? She posited that blockchain could work in healthcare because it is decentralized, has increased security, improves access controls, is more impervious to unauthorized change, could support availability goals for ransomware attacks and other issues, is potentially interoperable, could be less expensive, and could be controlled by regulatory branch, consortium, and the patient. She closed by raising potential legal issues related to broad data sharing, unanswered questions about private implementations, privacy requirements relating to the obligation of data deletion and correction (GDPR in the EU, China’s cybersecurity law, etc); and questions of data ownership in a contract.

Professor Eric Chason, William & Mary Marshall-Wythe School of Law;

Eric closed by discussing the potential tax issue for hard forks. He explained that after a hard fork, a new coin is created, and asked whether that creates income because the owner had one entitlement and now has two pieces of ownership. He then asked whether hard forks are more like corporate reorganizations or spinoffs (which already have statutory taxation provisions) or rather analogous to a change of wealth. Finally, he asked whether we should think about these transactions like a contingent right to do something in the future and how that should be valued.

Stay tuned for more on these and other projects related to blockchain. I will be sure to post them when they are done. But, ignore blockchain at your peril. There’s a reason that IBM, Microsoft, and the State Department are spending money on this technology. If you come to UT on September 15th, I’ll explain how other companies, the UN, NASDAQ, and nation states are using blockchain beyond the cryptocurrency arena.

 

August 12, 2018 in Commercial Law, Compliance, Conferences, Contracts, Corporate Governance, Corporations, Current Affairs, Entrepreneurship, Human Rights, Law School, Lawyering, Legislation, Marcia Narine Weldon, Research/Scholarhip, Securities Regulation, Shareholders, Teaching, Technology, Writing | Permalink | Comments (0)

Monday, May 9, 2016

Monday Business Law Fun: Goldilocks, Consumer Protection, and Over-Caffeinating

[Please keep in mind as you read this post that my daughter is a Starbucks partner.  Any pro-Starbucks bias in this post is unintended.  But you should factor in my affiliation accordingly.]

Maybe it's just me, but the publicity around the recent suit against Starbucks for putting too much ice in their iced beverages made me think of Goldilocks and her reactions to that porridge, those chairs, and those beds.  First it was McDonald's, where the coffee was too hot.  Now it's Starbucks, where the coffee is too cold--or, more truthfully, is too watered down from frozen water . . . .  (And apparently I missed a Starbucks suit earlier this year on under-filing lattes . . . .)  

Different types of tort suits, I know.  I always felt bad about the injury to the woman in the McDonald's case, although the fault issue was truly questionable.  The recent Starbucks case just seems wrong in so many ways, however.  This is a consumer dispute that is best addressed by other means.  I admit to believing this most recent suit is actually an abuse of our court system.

How might a customer who is truly concerned about a substandard beverage attempt to remedy the wrong?

Continue reading

May 9, 2016 in Commercial Law, Current Affairs, Joan Heminway, Lawyering, Litigation | Permalink | Comments (0)

Friday, October 2, 2015

Is CSR BS?

Today I will present on a panel with colleagues that spent a week with me this summer in Guatemala meeting with indigenous peoples, village elders, NGOs, union leaders, the local arm of the Chamber of Commerce, a major law firm, government officials, human rights defenders, and those who had been victimized by mining companies. My talk concerns the role of corporate social responsibility in Guatemala, but I will also discuss the complex symbiotic relationship between state and non-state actors in weak states that are rich in resources but poor in governance. I plan to use two companies as case studies. 

The first corporate citizen, REPSA (part of the Olmeca firm), is a Guatemalan company that produces African palm oil. This oil is used in health and beauty products, ice cream, and biofuels, and because it causes massive deforestation and displacement of indigenous peoples it is also itself the subject of labeling legislation in the EU. REPSA is a signatory of the UN Global Compact, the world's largest CSR initiative. Despite its CSR credentials, some have linked REPSA with the assassination last month of a professor and activist who had publicly protested against the company's alleged pollution of rivers with pesticides. The "ecocide," that spread for hundreds of kilometers, caused 23 species of fish and 21 species of animals to die suddenly and made the water unsafe to drink. REPSA has denied all wrongdoing and has pledged full cooperation with authorities in the murder investigation. The murder occurred outside of a local court the day after the court ordered the closing of a REPSA factory. On the same day of the murder other human rights defenders were also allegedly kidnaped by REPSA operatives although they were later released. Guatemala's government is reportedly one of the most corrupt in the world-- the President resigned a few weeks ago and went to jail amidst a corruption scandal-- and thus it is no surprise that the government has allegedly done little to investigate either the ecocide or the murder.

The other case study concerns Tahoe, a Canadian mining company with a US subsidiary that used private security forces who shot seven protestors. Tahoe is facing trial in a Canadian court, a case that is being watched worldwide by the NGO community. Interestingly, the company's corporate social responsibility and the board's implementation are indirectly at issue in the case. Tahoe feels so strongly about CSR that it has a  CSR blog and quarterly report online touting its implementation of international CSR standards, including its compliance with the UN Guiding Principles on Business and Human Rights, the Voluntary Principles on Security and Human Rights, the Equator Principles (related to risk management for project finance in social risk projects), the IFC Performance Standards and a host of other initiatives related to grievance mechanisms for those seeking an access to remedy for human rights abuses. Tahoe is in fact a member of the CSR Committee of the International Bar Association. Nonetheless, despite these laudable achievements, none of the families that my colleagues and I met with in the mining town mentioned any of this nor talked about the "Cup of Coffee With the Mine" program promoted in the CSR report. Of course, it's possible that Tahoe has made significant reforms since the 2013 shootings and if so, then it should be applauded, but the families we met in June did not appear to give the company much credit. Instead they talked about the birth defects that their children have and the fact that they and their crops often go for days without water. They may not know the statistic, but some of the mining processes use the same amount of water in one hour that a family of four would use in 20 years.

Of note, the Guatemalan government only requires a 1% royalty for the minerals mined in the country rather than the 30% that other countries require, although legislation is pending to change this. Guatemala also provides its police and military as guards for the mines to protect the Canadian company from its own citizens. Guatemala probably helps shore up security because even though 98% of the local citizens voted against the mine, the mine commenced operations anyway despite both international and Guatemalan human rights law that requires free, prior, and informed consent (see here). 

Given this turmoil, perhaps it was actually the more risky climate of mining in Guatemala that caused Goldcorp to sell a 26% stake in Tahoe earlier this year rather than the stated goal of focusing on core assets. Norway's pension fund had already divested in January due to Tahoe's human rights record in Guatemala. Maybe these investors hadn't read the impressive Tahoe CSR report. With the background provided above, my abstract for my book chapter and today's talk is below. I welcome your thoughts in the comment section or by email at [email protected].

North Americans and Europeans have come to expect even small and medium sized enterprises to engage in some sort of corporate social responsibility (CSR). Large companies regularly market their CSR programs in advertising and recruitment efforts, and indeed over twenty countries require companies to publicly report on their environmental, social and governance (ESG) efforts. Definitions differ, but some examples may be instructive for this Chapter. For example, the Danish government, which mandates ESG reporting, defines CSR as considerations for human rights, societal, environmental and climate conditions as well as combatting corruption in business strategy and corporate activities. The United States government, which focuses on responsible business conduct, has explained, CSR entails conduct consistent with applicable laws and internationally recognised standards. Based on the idea that you can do well while doing no harm, RBC is a broad concept that focuses on two aspects of the business-society relationship: 1) the positive contribution businesses can make to economic, environmental, and social progress with a view to achieving sustainable development, and 2) avoiding adverse impacts and addressing them when they do occur.

Business must not only have a legal license to operate in a country, they must also have a social license. In other words, the community members, employees, government officials, and those affected by the corporate activitiesthe stakeholdersmust believe that the business is legitimate. It is no longer enough to merely be legally allowed to conduct business. Corporate social responsibility activities can thus often add a veneer of legitimacy.

With this in mind, what role does business play in society in general and in a country as complex as Guatemala in particular? Guatemalan citizens, including over two dozen different indigenous groups, have gone from fighting a bloody 36-year civil war to fighting corrupt leadership that often appears to put the interests of local and multinational businesses above that of the people. For example, although the Canadian Trade Commission has an office with resources related to CSR in Guatemala, some of the most egregious allegations of human rights abuses relate to mining companies from that country. Similarly, many of the multinationals that proudly publish CSR reports and even use the buzzwords social license in slick videos on their websites are the same corporations accused in lawsuits by human rights and environmental defenders. How do these multinationals reconcile these acts? How and when will consumers and socially-responsible investors hold corporations accountable for these acts? Is the Guatemalan government abdicating its responsibility to its own people or is the government in fact complicit with the multinationals? And finally, do foreign governments bear any responsibility for the acts of multinationals acting abroad? This chapter will explore this continuum from corporate social responsibility to corporate accountability using the case study of Guatemala in general and the extractive and palm oil industries in particular.

 

October 2, 2015 in Commercial Law, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Human Rights, International Business, International Law, Litigation, Marcia Narine Weldon | Permalink | Comments (0)

Thursday, September 3, 2015

Wal-Mart and the Social License to Operate

Has Wal-Mart reformed? Last week I blogged about whether conscious consumers or class actions can really change corporate behavior, especially in the areas of corporate social responsibility or human rights. I ended that post by asking whether Wal-Mart, the nation’s largest gun dealer, had bowed down to pressure from activist groups when it announced that it would stop selling assault rifles despite the fact that gun sales are rising (not falling as Wal-Mart claims). Fellow blogger Ann Lipton did a great post about the company’s victory over shareholder Trinity over a proposal related to the sale of dangerous products (guns with high capacity magazines). There doesn’t appear to be anything in the 2015 proxy that would necessitate even the consideration of a change that Wal-Mart fought through the Third Circuit to avoid.

So why the change? Is it due to the growing public weariness over mass shootings? Did they feel the sting after Senator Chris Murphy praised them for ceasing the sale of Confederate flags but called them out on their gun sales? Even the demands of a Senator won’t overcome the apparent lack of political will to enact more strict gun control, so fear of legislation is not a likely factor either. Selling guns doesn't even conflict with the very specific initiatives in their comprehensive GRI-referenced global responsibility report.

Maybe the CEO just wants to do what he believes is the right thing. After all, he announced to great fanfare in February that the retailer would be raising minimum wages for associates. But just this week the chain announced that it would be cutting back on worker hours in many stores. Was the pay raise a “cruel PR stunt” as some have complained or it good business sense for a company that has failed to live up to investor expectations and needs to retain good talent and reduce turnover?

A few weeks ago when I did a crash course in US corporate law and governance in Panama, I had a lengthy debate with the head of CSR for a Latin American company. I (cynically) told her that in my ideal(ist) world, companies should adopt a stakeholder view and look beyond profit maximization. However, I believed that most large companies in fact implemented CSR programs to enhance reputation, avoid onerous legislation, and mitigate enterprise risks. The company that builds the school or the drinking well in a remote area of a third-world country does good for the community but it also has workers who can send their children to school, educates the next generation of employees, and makes sure that the community has potable water so that workers don't get sick. Its CSR builds good will in the community that can be worth more than gold. The smart company makes sure that it has a social license to operate as well as legal license.

So back to Wal-Mart. Does the retailer need a social license to boost sagging sales or does it just need different merchandise?  In other words is the retailer trying to get more customers by stopping the sale of assault rifles? Was that announcement timed to blunt the effect of the announcement about cutting back hours? Or is Doug McMillon simply doing what he believes makes sense for the shareholders and the stakeholders? The cynic in me says that there’s a business reason other than low sales for the change in position on guns and that there was always a business reason for the rise in wages.

September 3, 2015 in Ann Lipton, Commercial Law, Compliance, Corporate Governance, Corporations, CSR, Current Affairs, Human Rights, Legislation, Marcia Narine Weldon, Shareholders | Permalink | Comments (1)