Friday, October 23, 2020
It’s hard to believe that the US will have an election in less than two weeks. Three years ago, a month after President Trump took office, I posted about CEOs commenting on his executive order barring people from certain countries from entering the United States. Some branded the executive order a “Muslim travel ban” and others questioned whether the CEOs should have entered into the political fray at all. Some opined that speaking out on these issues detracted from the CEOs’ mission of maximizing shareholder value. But I saw it as a business decision - - these CEOs, particularly in the tech sector, depended on the skills and expertise of foreign workers.
That was 2017. In 2018, Larry Fink, CEO of BlackRock, told the largest companies in the world that “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society…Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.” Fink’s annual letter to CEOs carries weight; BlackRock had almost six trillion dollars in assets under management in 2018, and when Fink talks, Wall Street listens. Perhaps emboldened by the BlackRock letter, one year later, 181 CEOs signed on to the Business Roundtable's Statement on the Purpose of a Corporation, which “modernized” its position on the shareholder maximization norm. The BRT CEOs promised to invest in employees, deal ethically and fairly with suppliers, and embrace sustainable business practices. Many observers, however, believed that the Business Roundtable statement was all talk and no action. To see how some of the signatories have done on their commitments as of last week, see here.
Then came 2020, a year like no other. The United States is now facing a global pandemic, mass unemployment, a climate change crisis, social unrest, and of course an election. During the Summer of 2020, several CEOs made public statements on behalf of themselves and their companies about racial unrest, with some going as far as to proclaim, “Black Lives Matter.” I questioned these motives in a post I called “"Wokewashing and the Board." While I admired companies that made a sincere public statement about racial justice and had a real commitment to look inward, I was skeptical about firms that merely made statements for publicity points. I wondered, in that post, about companies rushing to implement diversity training, retain consultants, and appoint board members to either curry favor with the public or avoid the shareholder derivative suits facing Oracle, Facebook, and Qualcomm. How well had they thought it out? Meanwhile, I noted that my colleagues who have conducted diversity training and employee engagement projects for years were so busy that they were farming out work to each other. Now the phones aren’t ringing as much, and when they are ringing, it’s often to cancel or postpone training.
Why? Last month, President Trump issued the Executive Order on Combatting Race and Sex Stereotyping. As the President explained:
today . . . many people are pushing a different vision of America that is grounded in hierarchies based on collective social and political identities rather than in the inherent and equal dignity of every person as an individual. This ideology is rooted in the pernicious and false belief that America is an irredeemably racist and sexist country; that some people, simply on account of their race or sex, are oppressors; and that racial and sexual identities are more important than our common status as human beings and Americans ... Therefore, it shall be the policy of the United States not to promote race or sex stereotyping or scapegoating in the Federal workforce or in the Uniformed Services, and not to allow grant funds to be used for these purposes. In addition, Federal contractors will not be permitted to inculcate such views in their employees.
The Order then provides a hotline process for employees to raise concerns about their training. Whether you agree with the statements in the Order or not -- and I recommend that you read it -- it had a huge and immediate effect. The federal government is the largest procurer of goods and services in the world. This Order applies to federal contractors and subcontractors. Some of those same companies have mandates from state law to actually conduct training on sexual harassment. Often companies need to show proof of policies and training to mount an affirmative defense to discrimination claims. More important, while reasonable people can disagree about the types and content of diversity training, there is no doubt that employees often need training on how to deal with each other respectfully in the workplace. (For a thought-provoking take on a board’s duty to monitor diversity training by co-blogger Stefan Padfield, click here.)
Perhaps because of the federal government’s buying power, the U.S. Chamber of Commerce felt compelled to act. On October 15th, the Chamber and 150 organizations wrote a letter to the President stating:
As currently written, we believe the E.O. will create confusion and uncertainty, lead to non-meritorious investigations, and hinder the ability of employers to implement critical programs to promote diversity and combat discrimination in the workplace. We urge you to withdraw the Executive Order and work with the business and nonprofit communities on an approach that would support appropriate workplace training programs ... there is a great deal of subjectivity around how certain content would be perceived by different individuals. For example, the definition of “divisive concepts” creates many gray areas and will likely result in multiple different interpretations. Because the ultimate threat of debarment is a possible consequence, we have heard from some companies that they are suspending all D&I training. This outcome is contrary to the E.O.’s stated purpose, but an understandable reaction given companies’ lack of clear guidance. Thus, the E.O. is already having a broadly chilling effect on legitimate and valuable D&I training companies use to foster inclusive workplaces, help with talent recruitment, and remain competitive in a country with a wide range of different cultures. … Such an approach effectively creates two sets of rules, one for those companies that do business with the government and another for those that do not. Federal contractors should be left to manage their workforces and workplaces with a minimum amount of interference so long as they are compliant with the law.
It’s rare for the Chamber to make such a statement, but it was bold and appropriate. Many of the Business Roundtable signatories are also members of the U.S. Chamber, and on the same day, the BRT issued its own statement committing to programs to advance racial equity and justice. BRT Chair and WalMart CEO Doug McMillon observed, “the racial inequities that exist for many Black Americans and people of color are real and deeply rooted . . These longstanding systemic challenges have too often prevented access to the benefits of economic growth and mobility for too many, and a broad and diverse group of Americans is demanding change. It is our employees, customers and communities who are calling for change, and we are listening – and most importantly – we are taking action.” Now that's a stakeholder maximization statement if I ever heard one.
Those who thought that some CEOs went too far in protesting the Muslim ban, may be even more shocked by the BRT’s statements about the police. The BRT also has a subcommittee to address racial justice issues and noted that “For Business Roundtable CEOs, this agenda is an important step in addressing barriers to equity and justice . . . This summer we took on the urgent need for policing reform. We called on Congress to adopt higher federal standards for policing, to track whether police departments and officers have histories of misconduct, and to adopt measures to hold abusive officers accountable. Now, with announcement of this broader agenda, CEOs are supporting policies and undertaking initiatives to address several other systems that contribute to large and growing disparities.”
Now that stakeholders have seen so many of these social statements, they have asked for more. Last week, a group of executives from the Leadership Now Project issued a statement supporting free and fair elections. However, as Bennett Freeman, former Calvert executive and Clinton cabinet member noted, no Fortune 500 CEOs have signed on to that statement. Yesterday, the Interfaith Center on Corporate Responsibility (ICCR) sent a letter to 200 CEOs, including some members of the BRT asking for their support. ICCR asked that they endorse:
- Active support for free and fair elections
- A call for a thorough and complete counting of all ballots
- A call for all states to ensure a fair election
- A condemnation of any tactics that could be construed as voter intimidation
- Assurance that, should the incumbent Administration lose the election, there will be a peaceful transfer of power
- Ensure that lobbying activities and political donations support the above
Is this a pipe dream? Do CEOs really want to stick their necks out in a tacit criticism of the current president’s equivocal statements about his post-election plans? Now that JPMorgan Chase CEO Jamie Dimon has spoken about the importance of respect for the democratic process and the peaceful transfer of power, perhaps more executives will make public statements. But should they? On the one hand, the markets need stability. Perhaps Dimon was actually really focused on shareholder maximization after all. Nonetheless, Freeman and others have called for a Twitter campaign to urge more CEOs to speak out. My next post will be up on the Friday after the election and I’ll report back about the success of the hashtag activism effort. In the meantime, stay tuned and stay safe.
October 23, 2020 in Contracts, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Employment Law, Ethics, Financial Markets, Human Rights, Legislation, Management, Marcia Narine Weldon, Nonprofits, Stefan J. Padfield | Permalink | Comments (1)
Friday, October 9, 2020
How are you doing? I'm exhausted between teaching, grading, consulting, writing, and living through a pandemic. I actually wasn't planning to post today because I post every other Friday, as a way to maintain some balance. I may not post next Friday because I'll be participating in Connecting the Threads, IV, our business law professor blog annual conference. It's virtual and you may get up to 8 CLE credits, including an ethics credit. If you love our posts, you'll get to see us up close and personal, and you won't even need a mask.
I decided to do this short post today because it may help some of you, whether you're professors or practitioners. Several years ago, Haskell Murray wrote that he does a mid-semester survey. He asks his students what they like and don't like. I love this idea ... in theory. How many of us really want to know how we're doing? I've done it a couple of times when I knew that the class was going great, but I don't do it consistently. I decided to do it this year because we are piloting a new program modeled after Emory's Transactional Law Program. I used to teach one or two sections of transactional drafting every semester by myself, but now I do the lecture portion (asynchronously) and six adjuncts teach the skills portion in live classes via Zoom (for now). In some ways, it was easier to teach by myself. Five of the six adjuncts are teaching for the first time, and online at that. It's not easy. I also do pre-recorded videos with questions embedded via Feedback Fruits that students must answer. Each week, I review the answers for each of the classes, look for trends and gaps in knowledge, debrief with the adjuncts, hold office hours with the students, and try to find current events related to what we are doing. I also teach two sections of legal writing to 1Ls. My life is a constant stream of conferences and marking up drafts.
Students tell me they love the transactional drafting class, but what about those who don't say anything? So, I bit the bullet and sent out an anonymous survey to the seventy students enrolled. So far less than 1/3 have responded, but I've already gleaned valuable insight. I sent the survey out two days ago and I've already changed the structure of my videos and am holding a mid-semester review. The students validated my concerns about one of our books. Some students were just glad to be asked. Most important, I won't have to wait until the evaluations at the end of the semester.
Ironically, when I consult with companies on employee relations or corporate culture issues, I recommend that they do a Start, Stop, Continue or Do More, Do Not Change, Do Less exercise with the employees. I've even led focus groups on this, and employees love it because they feel engaged. As long as the company actually commits to making changes as appropriate, it's a powerful tool.
I challenge you to ask your students or your employees how you're doing, especially in these trying times. You may be surprised. If you have other novel recommendation for getting feedback from students or employees, let us know in the comments.
I hope to see you next week at the Connecting the Threads Conference.
Monday, October 5, 2020
The fourth annual Business Law Prof Blog symposium, Connecting the Threads, is happening, despite the pandemic. We are proceeding in a virtual format, hosted on Zoom on Friday, October 16. More information is available here.
The line-up includes an impressive majority of our bloggers speaking on a wide range of topics from shareholder proposals to social enterprise, opting out of partnership, and much more. Most papers will have a faculty and student discussant. My submission, “Business Law and Lawyering in the Wake of COVID-19,” is coauthored with two students and carries one hour of Tennessee ethics credit. While I wish we could host everyone in person in Knoxville, it always is an amazing day when we all get together. I look forward to learning more about what everyone is working on and hearing what everyone has to say.
Friday, October 2, 2020
No. You didn't miss Part 1. I wrote about Weinstein clauses last July. Last Wednesday, I spoke with a reporter who had read that blog post. Acquirors use these #MeToo/Weinstein clauses to require target companies to represent that there have been no allegations of, or settlement related to, sexual misconduct or harassment. I look at these clauses through the lens of a management-side employment lawyer/compliance officer/transactional drafting professor. It’s almost impossible to write these in a way that’s precise enough to provide the assurances that the acquiror wants or needs.
Specifically, the reporter wanted to know whether it was unusual that Chevron had added this clause into its merger documents with Noble Energy. As per the Prospectus:
Since January 1, 2018, to the knowledge of the Company, (i), no allegations of sexual harassment or other sexual misconduct have been made against any employee of the Company with the title of director, vice president or above through the Company’s anonymous employee hotline or any formal human resources communication channels at the Company, and (ii) there are no actions, suits, investigations or proceedings pending or, to the Company’s knowledge, threatened related to any allegations of sexual harassment or other sexual misconduct by any employee of the Company with the title of director, vice president or above. Since January 1, 2018, to the knowledge of the Company, neither the Company nor any of its Subsidiaries have entered into any settlement agreements related to allegations of sexual harassment or other sexual misconduct by any employee of the Company with the title of director, vice president or above.
Whether I agree with these clauses or not, I can see why Chevron wanted one. After all, Noble’s former general counsel left the company in 2017 to “pursue personal interests” after accusations that he had secretly recorded a female employee with a video camera under his desk. To its credit, Noble took swift action, although it did give the GC nine million dollars, which to be fair included $8.3 million in deferred compensation. Noble did not, however, exercise its clawback rights. Under these circumstances, if I represented Chevron, I would have asked for the same thing. Noble’s anonymous complaint mechanisms went to the GC’s office. I’m sure Chevron did its own social due diligence but you can never be too careful. Why would Noble agree? I have to assume that the company’s outside lawyers interviewed as many Noble employees as possible and provided a clean bill of health. Compared with others I’ve seen, the Chevron Weinstein clause is better than most.
Interestingly, although several hundred executives have left their positions due to allegations of sexual misconduct or harassment since 2017, only a small minority of companies use these Weinstein clauses. Here are a few:
Except in each case, as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, to the Knowledge of the Company, (i) no allegations of sexual harassment have been made against (A) any officer or director of the Acquired Companies or (B) any employee of the Acquired Companies who, directly or indirectly, supervises at least eight (8) other employees of the Acquired Companies, and (ii) the Acquired Companies have not entered into any settlement agreement related to allegations of sexual harassment or sexual misconduct by an employee, contractor, director, officer or other Representative.
- Merger between Genuine Parts Company, Rhino SpinCo, Inc., Essendant Inc., and Elephant Merger Sub Corp.:
To the knowledge of GPC, in the last five (5) years, no allegations of sexual harassment have been made against any current SpinCo Business Employee who is (i) an executive officer or (ii) at the level of Senior Vice President or above.
- AGREEMENT AND PLAN OF MERGER BY AND AMONG WORDSTREAM, INC., GANNETT CO., INC., ORCA MERGER SUB, INC. AND SHAREHOLDER REPRESENTATIVE SERVICES LLC:
(i) The Company is not party to a settlement agreement with a current or former officer, employee or independent contractor of the Company or its Affiliates that involves allegations relating to sexual harassment or misconduct. To the Knowledge of the Company, in the last eight (8) years, no allegations of sexual harassment or misconduct have been made against any current or former officer or employee of the Company or its Affiliates.
- AGREEMENT AND PLAN OF MERGER By and Among RLJ ENTERTAINMENT, INC., AMC NETWORKS INC., DIGITAL ENTERTAINMENT HOLDINGS LLC and RIVER MERGER SUB INC.:
(c) To the Company’s Knowledge, in the last ten (10) years, (i) no allegations of sexual harassment have been made against any officer of the Company or any of its Subsidiaries, and (ii) the Company and its Subsidiaries have not entered into any settlement agreements related to allegations of sexual harassment or misconduct by an officer of the Company or any of its Subsidiaries.
Here are just a few questions:
- What's the definition of "sexual misconduct"? Are the companies using a legal definition? Under which law? None of the samples define the term.
- What happens of the company handbook or policies do not define "sexual misconduct"?
- How do the parties define "sexual harassment"? Are they using Title VII, state law, case law, their diversity training decks, the employee handbook? None of the samples define the term.
- What about the definition of "allegation"? Is this an allegation through formal or informal channels (as employment lawyers would consider it)? Chevron gets high marks here.
- Have the target companies used the best knowledge qualifiers to protect themselves?
- How will the target company investigate whether the executives and officers have had “allegations”? Should the company lawyers do an investigation of every executive covered by the representation to make sure the company has the requisite “knowledge”? If the deal documents don't define "knowledge," should we impute knowledge?
- What about those in the succession plan who may not be in the officer or executives ranks?
Will we see more of these in the future? I don’t know. But I sure hope that General Motors has some protection in place after the most recent allegations against Nikola’s founder and former chairman, who faces sexual assault allegations from his teenage years. Despite allegations of fraud and sexual misconduct, GM appears to be moving forward with the deal, taking advantage of Nikola’s decreased valuation after the revelation of the scandals.
I’ll watch out for these #MeToo clauses in the future. In the meantime, I’ll ask my transactional drafting students to take a crack at reworking them. If you assign these clauses to your students, feel free to send me the work product at email@example.com.
Take care and stay safe.
October 2, 2020 in Compliance, Contracts, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Employment Law, Ethics, Lawyering, M&A, Management, Marcia Narine Weldon, Securities Regulation | Permalink | Comments (1)
Friday, September 18, 2020
Two weeks ago, I wrote about the role of compliance officers and general counsel working for Big Pharma in Where Were the Gatekeepers- Part 1. As a former compliance officer and deputy general counsel, I wondered how and if those in-house sentinels were raising alarm bells about safety concerns related to rushing a COVID-19 vaccine to the public. Now that I’ve watched the Netflix documentary “The Social Dilemma,” I’m wondering the same thing about the lawyers and compliance professionals working for the social media companies.
The documentary features some of the engineers and executives behind the massive success of Google, Facebook, Pinterest, Twitter, YouTube and other platforms. Tristan Harris, a former Google design ethicist, is the star of the documentary and the main whistleblower. He raised concerns to 60 Minutes in 2017 and millions have watched his TED Talk. He also testified before Congress in 2019 about how social media companies use algorithms and artificial intelligence to manipulate behavior. Human rights organizations have accused social media platforms of facilitating human rights abuses. Facebook and others have paid billions in fines for privacy violations. Advertisers boycotted over Facebook and hate speech. But nothing has slowed their growth.
The documentary explicitly links the rising rate of youth depression, suicide, and risk taking behavior to social media’s disproportionate influence. Most of my friends who have watched it have already decreased their screen time or at least have become more conscious of it. Maybe they are taking a cue from those who work for these companies but don’t allow their young children to have any screen time. Hmmm …
I’ve watched the documentary twice. Here are some of the more memorable quotes:
”If you’re not paying for the product, then you’re the product.”
“They sell certainty that someone will see your advertisement.”
“It’s not our data that’s being sold. They are building models to predict our actions based on the click, what emotions trigger you, what videos you will watch.”
“Algorithms are opinions embedded in code.”
”It’s the gradual, slight, imperceptible change in our own behavior and perception that is the product.”
“Social media is a drug.”
”There are only two industries that call their customers ‘users’: illegal drugs and software.”
”Social media is a marketplace that trades exclusively in human futures.”
”The very meaning of culture is manipulation.”
“Social media isn’t a tool waiting to be used. It has its own goals, and it has its own means of pursuing them.”
“These services are killing people and causing people to kill themselves.”
“When you go to Google and type in “climate change is,” you will get a different result based on where you live … that’s a function of … the particular things Google knows about your interests.”
“It’s 2.7 billion Truman Show. Each person has their own reality, their own facts.”
“It worries me that an algorithm I worked on is increasing polarization in society.”
“Fake news on Twitter spreads six times faster than real news.”
“People have no idea what is true and now it’s a matter of life and death.”
“Social media amplifies exponential gossip and exponential hearsay to the point that we don’t know what’s true no matter what issue we care about.”
“If you want to control the operation of a country, there’s never been a better tool than Facebook.”
"The Russians didn't hack Facebook. What they did was use the tools Facebook created for legitimate advertisers and legitimate users, and they applied it to a nefarious purpose."
“What [am I] most worried about? In the short term horizon? Civil War.”
“How do you wake up from the matrix when you don’t know you’re in the matrix”?
“You could shut down the service and destroy . . . $20 billion in shareholder value and get sued, but you can’t in practice put the genie back in the model.”
“We need to accept that it’s ok for companies to be focused on making money but it’s not ok when there’s no regulation, no rules, and no competition and companies are acting as de facto governments and then saying ‘we can regulate ourselves.’ “
“There’s no fiscal reason for these companies to change.”
This brings me back to the beginning of my post. We’ve heard from former investors, engineers, and algorithm magicians from these companies, but where were and are the gatekeepers? What were they doing to sound the alarm? But maybe I’m asking the wrong question. As Ann Lipton’s provocative post on Doyle, Watson, and the Purpose of the Corporation notes, “Are you looking at things from outside the corporation, in terms of structuring our overall legal and societal institutions? Or are you looking at things from inside the corporation, in terms of how corporate managers should understand their jobs and their own roles?”
If you’re a board member or C-Suite executive of a social media company, you have to ask yourself, what if hate speech, fake news, polarization, and addiction to your product are actually profitable? What if perpetuating rumors that maximize shareholder value is the right decision? Why would you change a business model that works for the shareholders even if it doesn’t work for the rest of society? If social media is like a drug, it’s up to parents to instill the right values in their children. I get it. But what about the lawyers and the people in charge of establishing, promoting, and maintaining an ethical culture? To be clear, I don’t mean in any way to impugn the integrity of lawyers and compliance professionals who work for social media companies. I have met several at business and human rights events and privacy conferences who take the power of the tech industry very seriously and advocate for change.
The social media companies have a dilemma. Compliance officers talk about “tone at the top,” “mood in the middle,” and the “buzz at the bottom.” Everyone in the organization has to believe in the ethical mandate as laid out and modeled by leadership. Indeed, CEOs typically sign off on warm, fuzzy statements about ethical behavior in the beginning of the Code of Conduct. I’ve drafted quite a few and looked at hundreds more. Notably, Facebook’s Code of Conduct, updated just a few weeks ago, has no statement of principle from CEO Mark Zuckerberg and seems very lawyerlike. Perhaps there’s a more robust version that employees can access where Zuckerberg extols company values. Twitter’s code is slightly better and touches more on ethical culture. Google’s Code states, “Our products, features, and services should make Google more useful for all our users. We have many different types of users, from individuals to large businesses, but one guiding principle: “Is what we are offering useful?”’ My question is “useful” to whom? I use Google several times a day, but now I have to worry about what Google chooses to show me. What's my personal algorithm? I’ve been off of Facebook and Instagram since January 2020 and I have no plans to go back.
Fifty years ago, Milton Friedman uttered the famous statement, “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” The social media companies have written the rules of the game. There is no competition. Now that the “Social Dilemma” is out, there really isn’t any more deception or fraud.
Do the social media companies actually have a social responsibility to do better? In 2012, Facebook’s S-1 proclaimed that the company’s mission was to “make the world more open and connected.” Facebook’s current Sustainability Page claims that, “At Facebook, our mission is to give people the power to build community and bring the world closer together.” Why is it, then that in 2020, people seem more disconnected than ever even though they are tethered to their devices while awake and have them in reach while asleep? Facebook’s sustainability strategy appears to be centered around climate change and supply chain issues, important to be sure. But is it doing all that it can for the sustainability of society? Does it have to? I have no answer for that. All I can say is that you should watch the documentary and judge for yourself.
September 18, 2020 in Ann Lipton, Compliance, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Family, Film, Human Rights, Lawyering, Management, Marcia Narine Weldon, Psychology, Shareholders, Television | Permalink | Comments (0)
Saturday, September 5, 2020
I think that the GCs at Big Pharma have hacked into my Zoom account. First, some background. Earlier this week, I asked my students in UM’s Lawyering in a Pandemic course to imagine that they were the compliance officers or GCs at the drug companies involved in Operation Warp Speed, the public-private partnership formed to find a vaccine for COVID-19 in months, rather than years. I asked the students what they would do if they thought that the scientists were cutting corners to meet the government’s deadlines. Some indicated that they would report it internally and then externally, if necessary.
I hated to burst their bubbles, but I explained that the current administration hasn’t been too welcoming to whistleblowers. I had served on a non-partisan, multi-stakeholder Department of Labor Whistleblower Protection Advisory Committee when President Trump came into office, which was disbanded shortly thereafter. For over a year after that, I received calls from concerned scientists asking where they could lodge complaints. With that background, I wanted my students to think about how company executives could reasonably would report on cutting corners to the government that was requiring the “warp speed” results in the first place. We didn’t even get into the potential ethical issues related to lawyers as whistleblowers.
Well the good news is that Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline, and Sanofi announced on Friday that they have signed a pledge to make sure that they won’t jeopardize public safety by ignoring protocols. Apparently, the FDA may be planning its own statement to reassure the public. I look forward to seeing the statements when they’re released, but these companies have been working on these drugs for months. Better late than never, but why issue this statement now? Perhaps the lawyers and compliance officers – the gatekeepers – were doing their jobs and protecting the shareholders and the stakeholders. Maybe the scientists stood their ground. We will never know how or why the companies made this decision, but I’m glad they did. The companies hadn’t announced this safety pledge yet when I had my class and at the time, almost none of the students said they would get the vaccine. Maybe the pledge will change their minds.
Although the drug companies seem to be doing the right thing, I have other questions about Kodak. During the same class, I had asked my students to imagine that they were the GC, compliance officer, or board member at Kodak. Of course, some of my students probably didn’t even know what Kodak is because they take pictures with their phones. They don’t remember Kodak for film and cameras and absolutely no one knows Kodak as a pharmaceutical company. Perhaps that’s why everyone was stunned when Kodak announced a $765 million federal loan to start producing drug ingredients, especially because it’s so far outside the scope of its business. After all, the company makes chemicals for film development and manufacturing but not for life saving drugs. Kodak has struggled over the past few years because it missed the boat on digital cameras and has significant debt, filing for bankruptcy in 2012. It even dabbled in cryptocurrency for a few months in 2018. Not the first choice to help develop a vaccine.
To be charitable, Kodak did own a pharmaceutical company for a few years in the 80’s. But its most recent 10-K states that “Kodak is a global technology company focused on print and advanced materials and chemicals. Kodak provides industry-leading hardware, software, consumables and services primarily to customers in commercial print, packaging, publishing, manufacturing and entertainment.”
The Kodak deal became even more newsworthy because the company issued 1.75 million in stock and options to the CEO and other grants to company insiders and board members before the public announcement of the federal loan. The CEO had only had the job for a year. I haven’t seen any news reports of insiders complaining or refusing the grants. In fact, the day after the announcement of the loan, a Kodak board member made a $116 million dollar donation to charity he founded. Understandably, the news of the deal caused Kodak’s shares to soar. Insiders profited, and the SEC started asking questions after looking at records of the stock trades.
Alas, the deal is on hold as the SEC investigates. The White House’s own trade advisor has said that this may be “one of the dumbest decisions by executives in corporate history.” I’m not sure about that, but there actually may be nothing to see here. Some believe that there was a snafu with the timing of the announcement and that the nuances of Reg FD may get Kodak off the hook .I wonder though, what the gatekeepers were doing? Did the GC, compliance officer, or any board member ask the obvious questions? “Why are we doing something so far outside of our core competency?” They didn’t even get the digital camera thing right and that is Kodak’s core competency. Did anyone ask “should we really be issuing options and grants right before the announcement? Isn’t this loan material, nonpublic information and shouldn’t we wait to trade?”
I’ll keep watching the Kodak saga and will report back. In coming posts, I’ll write about other compliance and corporate governance mishaps. In the meantime, stay safe and please wear your masks.
September 5, 2020 in Compensation, Compliance, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Ethics, Financial Markets, Lawyering, Management, Marcia Narine Weldon, Securities Regulation, Shareholders, Technology | Permalink | Comments (0)
Friday, August 28, 2020
Two weeks ago, I wrote about wokewashing and the board of directors. I discussed companies that tout their social justice credentials to curry favor with consumers but in fact treat their employees differently. I touched on the difference between companies jumping on the “anti-racism” bandwagon and those like Nike, which took an unpopular stand in 2018 by supporting Colin Kapernick, who at the time was considered a pariah for taking a knee during the national anthem. Some commentators predicted boycotts but in fact, Nike had a 31% increase in sales following the ad campaign. One sporting good store owner who publicly called for a boycott actually went out of business.
Four years after Kapernick took a knee, professional basketball, hockey, soccer, and tennis players took a walk protesting a police-involved shooting of a Black man. Although the Milwaukee Bucks spurred the walkout by refusing to play against the Orlando Magic in the playoffs on Wednesday, LeBron James reportedly led what could have been a season-ending strike of the West Coast teams. One hundred league staffers also temporarily walked off the job today in support. Michael Jordan, basketball legend and team owner, helped broker a deal for the NBA teams to resume play tomorrow (Saturday).
What does all of this have to do with business? According to Forbes, “since 2010, the average NBA team value is up nearly sixfold and growing at a much faster rate than the other three major U.S. sports leagues, thanks to strong international growth prospects and blockbuster media deals.” The NBA’s 30 teams generated over $8 billion in revenues and several teams are worth $4billion each. NBA players aren’t doing too badly either. LeBron James earns almost $40 million a year from the NBA but is worth almost $500 million from endorsements and other deals. Athletes and entertainers are big business -- as rapper/producer Jay-Z once sang, “I’m not a businessman, I’m a business, man.”
Remember that store owner who went out of business after boycotting Nike products? He apparently realized that "being a sports store and not having Nike jerseys is kind of like being a milk store without milk or a gas station without gas." Being a sports league without marquee players is the same thing. Although the players received threats and vitriol, they chose to follow the example of the Bates 7 of NYU, Muhammad Ali refusing to go to VietNam, Tommie Smith and John Carlos in the Summer Olympics in 1968, the Boston Celtics in 1961, and countless others.
While some have argued that ball players should “shut up and dribble,” tennis legend Billie Jean King has stated that athletes must lead. No one complained when football player Aaron Rodgers took a stand on conflict minerals at the height of his playing career. But arguing for a law that prevents rape, murder, and child slavery isn’t really controversial. The Milwaukee Bucks did more than walk out. They apparently called the Wisconsin Attorney General from the locker room. The NBA players led and the NBA followed. League Commissioner Adam Silver stated that he supported the players, even though they initially took action without notifying the league or the union.
Is the NBA wokewashing? Not likely, even though NBA fans tend to be younger and more diverse than other sports fans. Today, the NBA and NBPA issued a statement promising to establish a social justice coalition to advocate for “meaningful police and criminal justice reform,” promote voting in ads, and work with cities to convert arenas into polling locations. Time will tell. I’m the mother of a Black 24-year old artist. He wouldn’t hurt a soul. But I worry every single day that he could be the next George Floyd or Jacob Blake. I thank the athletes who risked being “Kapernicked” or blacklisted. The NBA and other leagues know that if they don’t live up their commitments, they may not just lose fans, they’ll lose the game.
Friday, August 14, 2020
As an academic and consultant on environmental, social, and governance (ESG) matters, I’ve used a lot of loaded terms -- greenwashing, where companies tout an environmentally friendly record but act otherwise; pinkwashing, where companies commoditize breast cancer awareness or LGBTQ issues; and bluewashing, where companies rally around UN corporate social responsibility initiatives such as the UN Global Compact.
In light of recent events, I’ve added a new term to my arsenal—wokewashing. Wokewashing occurs when a company attempts to show solidarity with certain causes in order to gain public favor. Wokewashing isn’t a new term. It’s been around for years, but it gained more mainstream traction last year when Unilever’s CEO warned that companies were eroding public trust and industry credibility, stating:
Woke-washing is beginning to infect our industry. It’s polluting purpose. It’s putting in peril the very thing which offers us the opportunity to help tackle many of the world’s issues. What’s more, it threatens to further destroy trust in our industry, when it’s already in short supply… There are too many examples of brands undermining purposeful marketing by launching campaigns which aren’t backing up what their brand says with what their brand does. Purpose-led brand communications is not just a matter of ‘make them cry, make them buy’. It’s about action in the world.
The Black Lives Matter and anti-racism movements have brought wokewashing front and center again. My colleague Stefan Padfield has written about the need for heightened scrutiny of politicized decisions and corporate responses to the BLM movement here, here, and here, and Ann Lipton has added to the discussion here. How does a board decide what to do when faced with pressure from stakeholders? How much is too much and how little is too little?
The students in my summer Regulatory Compliance, Corporate Governance, and Sustainability course were torn when they acted as board members deciding whether to make a public statement on Black Lives Matter and the murder of George Floyd. As fiduciaries of a consumer goods company, the “board members” felt that they had to say “something,” but in the days before class they had seen the explosion of current and former employees exposing companies with strong social justice messaging by pointing to hypocrisy in their treatment of employees and stakeholders. They had witnessed the controversy over changing the name of the Redskins based on pressure from FedEx and other sponsors (and not the Native Americans and others who had asked for the change for years). They had heard about the name change of popular syrup, Aunt Jemima. I intentionally didn’t force my students to draft a statement. They merely had to decide whether to speak at all, and this was difficult when looking at the external realities. Most of the students voted to make some sort of statement even as every day on social media, another “woke” company had to defend itself in the court of public opinion. Others, like Nike, have received praise for taking a strong stand in the face of public pressure long before it was cool and profitable to be “woke.”
Now it’s time for companies to defend themselves in actual court (assuming plaintiffs can get past various procedural hurdles). Notwithstanding Facebook and Oracle’s Delaware forum selection bylaws, the same lawyers who filed the shareholder derivative action against Google after its extraordinary sexual harassment settlement have filed shareholder derivative suits in California against Facebook, Oracle, and Qualcomm. Among other things, these suits generally allege breach of the Caremark duty, false statements in proxy materials purporting to have a commitment to diversity, breach of fiduciary duty relating to a diverse slate of candidates for board positions, and unjust enrichment. Plaintiffs have labeled these cases civil rights suits, targeting Facebook for allowing hate speech and discriminatory advertising, Qualcomm for underpaying women and minorities by $400 million, and Oracle for having no Black board members or executives. Oracle also faces a separate class action lawsuit based on unequal pay and gender.
Why these companies? According to the complaints, “[i]f Oracle simply disclosed that it does not want any Black individuals on its Board, it would be racist but honest…” and “[a]t Facebook, apparently Zuckerberg wants Blacks to be seen but not heard.” Counsel Bottini explained, “when you actually go back and look at these proxy statements and what they’ve filed with the SEC, they’re actually lying to shareholders.”
I’m not going to discuss the merits of these cases. Instead, for great analysis, please see here written by attorneys at my old law firm Cleary Gottlieb. I’ll do some actual legal analysis during my CLE presentation at the University of Tennessee Transactions conference on October 16th.
Instead, I’m going to make this a little more personal. I’m used to being the only Black person and definitely the only Black woman in the room. It’s happened in school, at work, on academic panels, and in organizations. When I testified before Congress on a provision of Dodd-Frank, a Black Congressman who grilled me mercilessly during my testimony came up to me afterwards to tell me how rare it was to see a Black woman testify about anything, much less corporate issues. He expressed his pride. For these reasons, as a Black woman in the corporate world, I’m conflicted about these lawsuits. Do corporations need to do more? Absolutely. Is litigation the right mechanism? I don’t know.
What will actually change? Whether or not these cases ever get past motions to dismiss, the defendant companies are likely to take some action. They will add the obligatory Black board members and executives. They will donate to various “woke” causes. They will hire diversity consultants. Indeed, many of my colleagues who have done diversity, equity, and inclusion work for years are busier than they have ever been with speaking gigs and training engagements. But what will actually change in the long term for Black employees, consumers, suppliers, and communities?
When a person is hired or appointed as the “token,” especially after a lawsuit, colleagues often believe that the person is under or unqualified. The new hire or appointee starts under a cloud of suspicion and sometimes resentment. Many eventually resign or get pushed out. Ironically, I personally know several diversity officers who have left their positions with prestigious companies because they were hired as window dressing. Although I don’t know Morgan Stanley’s first Chief Diversity Officer, Marilyn Booker, her story is familiar to me, and she has now filed suit against her own company alleging racial bias.
So I’ll keep an eye on what these defendants and other companies do. Actions speak louder than words. I don’t think that shareholder derivative suits are necessarily the answer, but at least they may prompt more companies to have meaningful conversations that go beyond hashtag activism.
August 14, 2020 in Ann Lipton, Compliance, Consulting, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Delaware, Financial Markets, Management, Marcia Narine Weldon, Shareholders, Stefan J. Padfield | Permalink | Comments (0)
Sunday, August 2, 2020
Greetings from SEALS (virtually). I've just finished sitting in on the last of several excellent panels on online teaching. Below are tips from the panelists, some of my own lessons learned, and key takeaways from the excellent book Small Teaching Online. For more of the foundations of online teaching see Part I, Part II, Part III, and Part IV.
- Have a class zero- you and students can record an introduction of themselves, pets, hobbies, skills, talents etc. Make sure you’re smiling and conveying your excitement in the video about the class.
- You can also have a class zero where you spend 5 minutes on Zoom with each student before the first day of class talking to them about any questions they have about the class, their tech etc.
- Let students know that this online format is not just a pandemic issue. Virtual offices are increasingly common in practice.
- Think about how to motivate students- what counts as a grade? Should you raise the class participation component and if so, how will you measure it? Will watching videos before class and participating in discussion boards count?
- Stand when recording your video lectures or teaching synchronously. Students prefer it. You can get a standing desk or go old school like me and use a pile of textbooks to create a lectern.
- Think about creating mnemonic devices through your intentional use of imagery. Use images appropriately so that the students can connect the image with what you want them to remember.
- Allow the students to do more prep before class. Let them find the rule and the law and use a problem method during synchronous sessions where the students work on hypotheticals.
- Make sure that you explain the learning objectives each week or each module so the students know what they are doing, why, and where it fits in the course. You can even add how the module or unit will help them in practice.
- You can get information to students with an announcement or email, but consider using a short video, especially if you want to explain an assignment and add more nuance. Make sure to add your personality in to the video. You can also use video to explain information that students find confusing. This way you can avoid answering the same questions over and over again.
- Use the subtitle or caption feature for your powerpoints when you are recording your asynchronous lecture.
- Consider having a transcript of your lecture videos or a detailed outline, especially if you don’t have subtitles or captions in your videos. I don’t write out an outline for my classes, but if you do, you can post that outline.
- Have some questions for the students to think about while they watch the asynchronous video lecture. I will use Feedback Fruits so students will answer questions while they watch the videos and won’t be able to continue watching until they answer the questions. You could be more low tech and provide them with the question in advance and require them to answer the questions before class in a no or low-stakes quiz.
- Students seem to prefer short, informal videos to highly produced videos. Students respond better to conversational tones and unedited videos. Of course, don’t just read the slides.
- Try to avoid talking about dates or current events in your videos, unless it’s really relevant. Make sure the videos can stand alone as an independent product and don’t refer back to other videos.
- Disclose your grading rubric early or have students develop a rubric based on what you have communicated. This will help you know whether they understand your materials and your grading standards.
- Learn from neuroscience- do ungraded short quizzes and spaced repetition before and after class. For a business associations class, for example, you can use old bar questions each week, which will get them familiar with those type of questions.
- Use some of what works in K-12 teaching about how to keep students engaged, where they empower the students to learn. We focus more on how we perform as teachers vs. how students learn. If you watch YouTube videos of K-12 teachers, you can learn a lot that will also apply to law students.
- Use non-graded events throughout the semester such as short essays or multiple choice so that they can see how they are doing. Do this anonymously and provide the answers or model answers.
- If your class is small enough, greet students by name when they come in the Zoom room.
- Start each synchronous class with a question in the chat- it can relate to the materials, something in the news, or pop culture etc. If you normally arrive early to the physical classroom, do the same on Zoom and recreate that casual conversation.
- Make sure to save the chat in Zoom so that you can refer to issues in the next class or you can send out an email or announcement to discuss what you may have missed in the class.
- If you have a TA, that person can monitor the chat for you while you're teaching.
- In the first week, think of creating an exercise that relates to what the students may do for the final exam. This may include multiples choice, a short essay etc.
- Have panels of students on call for certain parts of the class, just as you would in residential classes.
- Try peer-to-peer formative assessment through peer review and team-based learning. This will work better in an online than a residential setting. See my earlier posts for more information on TBL.
- Take a break in class if it’s more than an hour. Tell the students that they can use that time to take notes, talk with each other etc.
- Add humor to the course. Consider a contest for best virtual background but be mindful that some students may not have the bandwidth for this. If all of your students can do it, consider a “prize” for the best background.
- When you use breakout rooms, have a class document that students can fill out or download and then share the screen during the breakout rooms. While they can use a whiteboard in breakout groups, they can’t share their breakout room whiteboard in the main room. You can share using Google docs in Zoom. This may work better if students need to report back to the class.
- In class, reboot student attention with thumbs up, thumbs down, polls etc. Try to keep things moving every 10-15 minutes.
- Have students do a short reflection at the end of a unit to discuss what they learned or struggled with. Give them the choice of using video or written format.
- If your LMS allows it, have a conditional release system so students cant’t see certain content until they have reached a certain score or milestone with the materials.
- Use the discussion board feature for students to answer questions and then make sure that you answer within 24 hours.
- If you choose to use discussion board for substantive student submissions, make sure that you have a clear rubric, with word count requirements etc. Consider having students have a choice of questions to answer. You may decide that if a response does not meet the rubric, the student gets 0 points, so it’s all or nothing. You can also require students to post before they see other posts. If you have a very large class, you can divide them into groups so the students are only looking at a smaller group of posts.
- Think about providing feedback on assignments via audio or video, if your class is small enough. Many students find that this provides more of a connection to the professor.
- Early or midway through the semester, use Google forms, survey monkey, or another mechanisms for students to let you know anonymously what's working and what’s not. Ask them what you should start, stop, and continue doing.
- Send personal emails when a student misses class. Just asking if the student is ok and making sure s/he knows where to find the class recording, can further the sense of community and connection.
- At the end of the semester, have the students assess themselves. They can also discuss three takeaways from the course and how they plan to use it in practice.
Best of luck planning for the new semester. Stay safe!
Friday, July 24, 2020
Yesterday, I had the pleasure of moderating a panel of Black entrepreneurs sponsored by the Miami Finance Forum, a group of finance, investment management, banking, capital markets, private equity, venture capital, legal, accounting and related professionals. When every company and law firm was posting about Black Lives Matter and donating to various causes, my colleague Richard Montes de Oca, an MFF board member, decided that he wanted to do more than post a generic message. He and the MFF board decided to launch a series of webinars on Black entrepreneurship. The first panel featured Jamarlin Martin, who runs a digital media company and has a podcast; Brian Brackeen, GP of Lightship Capital and founder of Kairos, a facial recognition tech company; and Raoul Thomas, CEO of CGI Merchant Group, a real estate private equity group.
These panelists aren't the typical Black entrepreneurs. Here are some sobering statistics:
- Black-owned business get their initial financing through 44% cash; 15% family and friends; 9% line of credit; 7% unsecured loans; and 3% SBA loans;
- Between February and April 2020, 41% of Black-owned businesses, 33% of Latinx businesses, and 26% of Asian-owned businesses closed while 17% of White-owned business closed;
- As of 2019, the overwhelming majority of businesses in majority Black and Hispanic neighborhoods did not have enough cash on hand to pay for two weeks worth of bills;
- The Center for Responsible Lending noted that in April, 95% of Black-owned businesses were tiny companies with slim change of achieving loans in the initial rounds of the Paycheck Protection Program;
- Only 12% of Black and Hispanic business owners polled between April 30-May 12 had received the funding they requested from the stimulus program. In contrast half of all small business had received PPP funds in the same poll.
Because we only had an hour for the panel, we didn't cover as much as I would have liked on those statistics. Here's what we did discuss:
- the failure of boards of directors and companies to do meaningful work around diversity and inclusion- note next week, I will post about the spate of shareholder derivative actions filed against companies for false statements about diversity commitments;
- the perceptions of tokenism and "shallow, ambiguous" diversity initiatives;
- how to get business allies of all backgrounds;
- the need for more than trickle down initiatives where the people at the bottom of the corporation/society don't reap benefits;
- the fact that investing in Black venture capitalists does not mean that those Black VCs will invest in Black entrepreneurs and the need for more transparency and accountability;
- whether the Black middle class still exists and the responsibility of wealthier Black professionals to provide mentorship and resources;
- why it's easier for entrepreneurs to get investments for products vs. services, and a hack to convince VCs to invest in the service;
- whether a great team can make up for a so-so product when a VC hears a pitch;
- why there are so many obstacles to being a Black LGBTQ entrepreneur and how to turn it to an advantage when pitching; and
- whether reparations will actually help Black entrepreneurs and communities.
If you want to hear the answers to these questions, click here for access to the webinar. Stay safe and wear your masks!
July 24, 2020 in Corporations, CSR, Current Affairs, Entrepreneurship, Family Business, Management, Marcia Narine Weldon, Private Equity, Service, Shareholders, Technology, Venture Capital | Permalink | Comments (0)
Saturday, July 11, 2020
Greetings from Miami, Florida, COVID19 hotspot. Yesterday, 33% of those tested had a positive result. Although my university still plans to have some residential instruction as of the time of this writing, most of us are preparing to go fully online at some point. In Part I, Part II, and Part III, I provided perspectives from experts in learning. I'm still gathering that information.
This week, however, I spoke to the real experts -- students. Yesterday, I had the opportunity to hear from students studying business and human rights from all over the world courtesy of the Teaching Business and Human Rights Forum. I've also been talking to research assistants and other current and former students. Here's a summary of their conclusions:
- We know that Spring was hard for everyone and that everyone is still learning how to teach online. Do not be worried about making mistakes.
- Don't assume that we are all digital natives. Some of us are older students or not used to the technology that you have decided to use. Make sure that the interface is intuitive and use tech in fun and interesting ways. (One professor used Jeopardy online and students loved it).
- Be flexible with assignments. Many of us are dealing with health and financial issues and we will need extensions. Some students will be in different time zones if you're requiring group work. It's not business as usual.
- If you have teaching assistants, have them monitor the chat functions if you use it and have them pop into breakout rooms (if you're using Zoom). TAs can be very helpful, especially in large classes.
- Add a COVID component to the lessons if you can. It helps us make sense of things and provides real-world context to what we are doing.
- Offer breaks. Time moves much slower in an online class.
- Use guest speakers who wouldn't be able to visit class. It makes class more interesting and allows us to hear from thought leaders from around the world.
- Consider using Slack or other tools other than for communications and group work.
- Use screen sharing during synchronous classes and allow others to share when appropriate.
- Make use of the chat function during synchronous classes. It keeps our attention and makes sure that we are engaged.
- Do not just talk over powerpoint slides. Many students simply download the slides if they found that professors were reading the slides word for word without adding new content.
- Make sure the slides have enough information to be useful. Some professors put only a few words on a slide and this doesn't facilitate learning.
- Use breakout rooms often and appoint a reporter to inform the class of the room's conclusions. Make sure that everyone understand the assignment before sending students off to breakout rooms.
- Breakout rooms help build community and encourage shy students to speak more.
- Communicate rubrics for assignments clearly and often. Let us know exactly what you expect us to learn in each module. Make the objectives clear.
- Try to forecast what you're going to teach and do a summary at the end of the lesson, if possible.
- Require us to keep our cameras on. We will pay more attention.
- Keep us engaged with polls, quizzes, and surveys.
- Post slides in advance if you can for synchronous classes so that we can take better notes or annotate them.
- Consider a WhatsApp group or other communication mechanism to share newspaper articles or current events. Make it optional for students to participate.
- Consider having the class watch a movie in class instead of on our own. It helped build community.
- Please do not do a 6 hour lecture over powerpoint.
- Make sure to use powerpoint. Even a short lecture is hard to watch if it's just the professor sitting there.
- Pay special attention to your foreign students, who may be living in a different reality. Consider having small group office hours for them.
- Depending on the time of the day, invite students to have a coffee hour via Zoom.
- Make sure to have virtual office hours. Students will need to feel a connection outside of class. Also consider coming to class early and opening the Zoom (or other room) early and staying after class as you would in person.
- Videos should not be longer than 10 minutes.
- The length of the video matters less if the professor is engaging. Some of the most engaging professors in person look dead on camera. Their lack of enthusiasm for teaching online comes through.
- It's nice to have good looking slides, but if the professor isn't enthusiastic, it doesn't matter how good the slides look.
- Use whiteboards, graphs, or diagrams if possible if you're explaining complex topics. This is really important for visual learners. If you used to use the board in person, try to find a way to do it online.
- Group projects are ok as long as there is built in accountability. We are ok working with others but it's harder online and worse if everyone gets the same grade and there is no penalty for students who don't do any work.
- Show videos within videos for asynchronous and synchronous classes. You can stop the video in class and ask questions, just as you would if we were in person.
- Make sure to stop for questions regularly. Remember there's a lag when people unmute or as you look to see who is raising a hand.
- Ask for our feedback. We all want to make online learning work.
Next week, I will add more from the teaching experts. Everyone stay safe and healthy.
Friday, July 3, 2020
It seems that every day, more schools are announcing that they will re-open either totally or mostly online in the Fall. If you’re still debating whether opening face-to-face in the Fall is safe, I recommend that you read this compelling essay by my colleague, Bill Widen. I live in a COVID hotspot in Miami, Florida, and fortunately, I had already been assigned to teach online. Unlike many of you who may find out about your school’s plans at the end of July, I’ve already been focusing on upping my online game.
Last week, in Part II of this series, I promised to summarize what I have learned from some of my readings from Learning How to Learn, Small Teaching Online, and Online Learning and the Future of Legal Education. Alas, I haven’t even had time to look at them because I’ve been teaching two courses, watching webinars on teaching, and taking two online courses for my own non-legal certifications. But it wasn’t a waste of time because it allowed me to look at online learning from a student’s perspective. Next week, I’ll summarize the readings in the sources listed above, but this week, I’ll provide some insight from the experts and from my perspective as a student.
Visual (spacial) learners learn best by seeing
Auditory (aural) learners learn best by hearing
Reading/writing learners learn best by reading and writing
Kinesthetic (physical) learners learn best by moving and doing
I know there’s a lot of controversy on learning styles, but I believe that students do learn differently, and that we need to plan for multiple types of activities to accommodate for those differences. Accordingly, each year, I conduct an online survey before the semester starts to ask the students their learning style, among other things. The students appreciate my asking and it reminds me to use different teaching methods. According to the VARK site, teachers and students often have different styles and we tend to teach in the way that we like to learn. Teaching online will highlight the need to plan for the different learning styles as we compete with the distractions from home.
It’s also important to understand the difference between active and passive learning. In active learning, the student learns by doing. Students learn passively when they listen to lectures or read textbooks. Students engage in active learning when they are analyzing, defining, creating, and evaluating information. Students learn using both modalities, but as educators, we want them to retain the information. This learning pyramid provides a helpful illustration.
My university provided us with the following statistics, which look at active learning from a slightly different perspective, but still gets to the same conclusion – teachers need to focus more on active learning. Apparently, people remember:
10% of what they read- passive learning
20% of what they hear- passive learning
30% of what they see- passive learning
50% of what they see and hear- passive learning
70% of what they say and write- active learning
90% of what they do- active learning
My experiences as a learner and teacher over the past few weeks leads me to believe that learning styles and active learning really do make a difference. For example, even though I had some of the world’s experts as panelists over the past few weeks in my compliance and corporate governance online course, I found during my scans of the Zoom squares that students who weren’t asking questions often look distracted after a period of time. The more they interacted with the panelists, the more engaged the class was as a whole. Having students use the chat feature increased engagement with the speakers as well (just make sure to disable private chat). But even during the most interesting discussions, some students tended to drift away and were clearly doing other things online. On the other hand, when I did sessions with the same students using breakout groups or requiring them to act as board members in a mock meeting, their engagement level appeared higher, even though they always commented favorably on the guest speakers.
Similarly, when I’ve watched webinars or taken certification courses, I found that if I didn’t see a person’s face during a video at least part of the time, then I needed a more engaging presentation style and slides with embedded videos of people doing something. If I didn’t have activities to do to test my understanding or put in practice what I had learned, I quickly lost interest. Reading too much made my eyes glaze over, especially after a day of teaching and holding student meetings on Zoom. Zoom fatigue is real and we need to take that into account when designing our courses. Remember, we may be on Zoom for a few hours a day but our students will be on Zoom for many more hours with different professors using different teaching styles. If we thought they were exhausted after a day of face-to-face class, imagine how they will feel after a day on Zoom learning complex topics from teachers with varying degrees of online proficiency.
With that in mind, here are some things we should consider over the next few weeks:
- How do we break our modules down to chunks of learning activities? How do we tie those learning activities to our stated learning objectives? Even though it may seem like we’re dumbing it down, should we say “Read/Watch This Before Class” “Do This In Class” “Do This After Class” each week in the modules? I’ve learned that you can never make it too simple for students.
- How do we ensure that we have activities where students discover, discuss, and then do/demonstrate?
- Are we mixing things up in our synchronous class every 15-20 minutes with polls, breakout groups, or some other non-lecture activity?
- Are we using the tools that work in a synchronous, asynchronous, and combination environment such as team-based learning, peer review, retrieval practice, and asynchronous videos?
I use team-based learning by having students work in law firms throughout the semester on graded and ungraded assignments and then requiring them to evaluate themselves and each other on specific criteria. More formally, team-based learning can involve more complex features such as readiness assuredness testing, which I don’t do, so I can’t comment on the effectiveness. The Team-Based Learning Collaborative and InteDashboard both come highly recommended.
I have used peer review occasionally in live classes and on discussion boards for my transactional drafting course, but I plan to use it even more in the Fall, likely using Google docs. I’ve found that my students’ work product improves significantly after they’ve marked up someone else’s draft, and this corresponds with the learning pyramid assertion that students remember 75% of what they do and 90% of what they teach others. Other professors I know have used Peerceptiv, Eli Review, and other tools. I’ve watched demos and think they’re great, but I’m trying to keep things simple for myself this Fall.
Finally, I’ve found that polls and no-stakes quizzes are highly effective for keeping students engaged during class, especially in courses like Business Associations. I’ve used polls and test your understanding quizzes through Echo 360 in both synchronous and asynchronous class sessions. Requiring short answers in the Echo 360 quizzes ensures that the students aren’t just guessing. Using multiple choice questions shows me how many students are answering correctly and gives me an idea of where the knowledge gaps are. I also have a record by student of the number of questions they have answered correctly. The quizzes, which only count for class participation, also provide formative assessment, which the students really need in an online environment.
Students also really like polls. It wakes them up and gives me an idea of what they actually understand or think about the material. During class, I’ve tended to use Zoom polls or Echo 360, but in the Fall, I will use a variety of tools including Kahoot for polling and creating instant word clouds, Poll Everywhere, which has more features than Kahoot, and Mentimeter, which offers greater functionality than Zoom. Poll Everywhere has put together a chart comparing it to its competitors but the best way to determine what works for your teaching style and objectives is to test drive them yourself. I’ve been on webinars where presenters have used all four tools, and I liked them all. I will probably use them all during the semester, but no more than two different mechanisms during a synchronous class session. According to our instructional designers, students respond well when professors use one or more polling feature in a class session. Some of the tools require students to use their cell phones to participate and you may have concerns about that, but let’s face it, they may be on their phones anyway, especially if you don’t require them to keep cameras on, as I do.
I’ve now flooded you with information. Next week, the flooding continues. I’ll continue talking about student engagement focusing on evidence-based theories in learning and the do’s and don’ts of breakout rooms. If you have any suggestions or experiences with any of these tools, please leave your comment below.
Friday, June 26, 2020
Last week, I wrote the first in a series of posts with tips for teaching online. I expect many more law schools to join Harvard and now UC Berkeley by doing all Fall classes online. I’m already teaching online this summer and will teach online in the fall. Our students deserve the best, so I’m spending my summer on webinars from my home institution and others learning best practices in course design.
Here are some tips that I learned this week from our distance learning experts. First, I need to adopt backward design. I have to identify the learning objectives for my courses, then decide how I will assess whether or not students successfully met the learning objective. Effective learning objectives are active, measurable, and focus on different levels of learning (e.g., remembering, understanding, applying, analyzing, evaluating, creating). Some people find Bloom's Taxonomy of Educational Objectives helpful.
Once I figure out my learning objectives, I will work backwards to determine what kinds of activities the students will work on either online or face to face (which for me will be Zoom). For more on this topic, see this guide to backward design from Vanderbilt University Center for Teaching. By the way, if you’re wondering why I’m not just saying click here, it’s because descriptive text is better for accessibility.
Then I will figure out the technology, which is important, but shouldn’t drive how or what I teach. Although we think our students are tech savvy, we still need to keep it simple and intuitive. We have to think about how to engage the students and facilitate learning without taking up too much bandwidth.
Finally, I need to ask myself some hard questions.
What do you want students to know when they have finished taking your blended course? What are the intended learning outcomes of the course?
- This actually takes some thought. We all have our mandated ABA learning objectives but what do they really mean, especially in today’s environment? How do I make sure that the learning objectives are pedagogically sound? What do students need to learn to be practical, strategic lawyers? What kinds of people, process, and tech skills do they need for the “new normal” when it comes to delivery of legal services? Yes, I want my students to know how to communicate more effectively to clients, counsel, and judges in my legal writing course. I want my students to know how to draft, edit, and negotiate contracts in my upper level skills courses. I want my compliance students to understand the law and the soft skills. But what other skills matter now? How will I communicate those over Zoom?
As you think about these outcomes, which would be better achieved in the online environment and which would be best achieved face-to-face in class?
- How much harder will it be to teach people skills and impart complex concepts online? I don’t have the option for face-to-face classes in the Fall and many of you won’t either, sorry to say. In the Fall, I will have one online asynchronous course and another hybrid. It will be all online but I will record some lectures and use the synchronous time for simulations, peer review, and discussions. I’m trying to determine how to make the synchronous time as engaging as possible – even more engaging than I would if I was standing in front of the room. I will have to compete with barking dogs, the comforts of a couch, and other electronic distractions that I would not have in an in-person environment. I’ll post more about keeping students engaged online in a subsequent post.
Blended teaching is not just a matter of transferring a portion of your existing course to the online environment. What types of learning activities do you think you will be using for the online portion of your course? For the face-to-face part of the course?
- Each week, I plan to use discussion boards and no-stakes short quizzes to ensure understanding for the asynchronous portions of my courses. My pre-recorded videos will be no longer than fifteen minutes, and ideally seven minutes or less. As stated above, for the synchronous Zoom sessions, I will use polls, breakout rooms, and panels of students. Because I will have a flipped classroom, the students will have learned the concepts so that we can apply them in class. As for class discussions, I have found that I sometimes have a more intimate connection with students in a class of fewer than 25 on Zoom than I did in the classroom, but large classes are much tougher. Professors appear to have mixed views on using the Socratic method on Zoom. Since my face-to-face classes are on Zoom, I require cameras on so that I can see their faces, unless they have permission in advance from me or temporary bandwidth issues.
Blended courses provide new opportunities for asynchronous online discussions. How will you use asynchronous discussions as part of the course learning activities? What challenges do you anticipate in using online discussions? How would you address these?
- I have used pre-class discussion boards and have required students to reply on two other submissions. These count for class participation so students can’t just write “great comment.” I have also experimented with post-class discussion board submissions. They key is to follow up and comment myself so that students don’t feel like they’re in a black hole. I also plan to have one or two students per week post a current event to the discussion board that relates to what we are doing in class. During class time, I will ask another student to discuss or summarize the current event.
How will the face-to-face, online and other “out of class” learning activities be integrated into a single course? In other words, how will all the course activities feed back into and support the other? How will you make the connections between the activities explicit to students?
- This will be tough and this is why I will spend weeks this summer planning. I need to make it clear what the students need to read, watch, and do pre-class, in-class, and post-class. Teaching online takes much more pre-work than most people realize. But this planning is critical to ensuring that the students have a seamless course experience.
When working online, students frequently have problems scheduling their work and managing their time. What do you plan to do to help your students address these issues and understand their own role and responsibility for learning in the course?
- Students really need structure, and even though they don’t like to admit it, they prefer it. Online learning means that students must have more discipline than they are used to. I plan to recommend a workload course estimator so that students can plan appropriately. I will also have to cut back on the work I give because economic and health issues will continue to plague my students during the pandemic. Our university and others have rolled out tools for students to manage their time, and more important, manage their stress. I also plan to do frequent check-ins and increase office hours.
Students can have challenges with using new instructional technologies to support their learning. What specific technologies will you use for the online and face-to-face portions of your course? What proactive steps can you take to assist students to become familiar with your course website and those instructional technologies? If students need help with technology later in the course, how will you provide support?
- As I mentioned in the last post, it’s best for all professors to use the same platforms for the learning management system. You can add bells and whistles for team communication or polling later. As for helping students get familiar with the website, our university has instructional designers and lots of webinars, but I plan to test drive my eventual set up with my research assistants over the summer and ask them to be brutally honest. Fortunately, we have several online resources for students as well.
There is a tendency for faculty to require students to do more work in a blended course than they normally would complete in a traditional face-to-face course. What are you going to do to ensure that you have not created a course and one-half? How will you evaluate the student workload (and your own) as compared to a traditional class?
- This is my biggest concern. I spend many more hours prepping my online courses than my traditional courses, and I haven’t even been doing anything particularly sophisticated. Now that I’m learning more tools and techniques, I anticipate that I will be spending more time prepping. In my zeal to make sure the students have a great experience and learn as much or more than in the traditional classroom, I will likely give them more work as well, if I’m not careful. The key is to use the findings from learning science to find a balance.
In my next post, I’ll talk about what I’m learning about how students learn. In case you can’t wait to see what I write, check out Learning How to Learn, Small Teaching Online, and Online Learning and the Future of Legal Education. If you have suggestions or comments, please leave them below so we can all learn from each other.
 Our instructional designers attributed these questions to the University of Wisconsin, Milwaukee.
Monday, June 22, 2020
Thanks to all of our readers who were able to come to the National Business Law Scholars Conference (NBLSC) last Thursday and Friday. It was lovely to see so many of you there, even though it was somewhat sad that we could not be with each other in person. The conference enjoyed record participation, and we have received a lot of useful informal feedback about our virtual format from folks who attended.
I was the beneficiary of many "teaching moments" in hosting and participating in the NBLSC this year. I later will post on some of the outtakes from the NBLSC teaching panel (to which co-blogger Marcia Narine Weldon--who blogged about teaching on Friday--contributed meaningfully). Today, however, I am focusing my post on a few new things my fellow UT Law conference hosts and I learned about Zoom in the process of hosting the conference. A list follows.
- Although meeting participants should mute themselves on entering a meeting, it is best for a meeting host to set up the meeting so that all participants will be muted on entry, especially for large meetings. It can be challenging to track down and mute participants who join a meeting and bring background noise or conversations into a meeting that is already in progress.
- If you have set up a Zoom meeting with yourself as the host and you hand off the hosting to another meeting participant during the meeting, you may leave the meeting without ending the meeting for all. However, you cannot then initiate a second meeting as host until the first meeting has concluded. You cannot, in other words, host two concurrent meetings, even if you handed off hosting in the first meeting to someone else. See here. (Fix? Set up someone else as an alternative host of the first meeting. Also have that alternative host start the first meeting as host. Join the first meeting as a participant. Sign off any time and initiate the second meeting.)
- If you are hosting a meeting, consider assigning someone as a co-host so that, if your Internet connection fails, the meeting continues to proceed with the co-host as host until you can re-join. This was particularly welcome to me, since my power went out three separate times on Friday afternoon during conference sessions I was hosting.
- Have a telephone or data-enabled smart pad handy as a back-up connection device if you are hosting or participating in a Zoom meeting on a computer using the Zoom client. Although data rates may apply, you can easily reconnect using the Zoom app on your phone or smart pad if you lose your Internet connection. (This is how I reconnected those three times on Friday.)
- If the meeting host allows all participants to share screens at the outset of the meeting, if a presenter who is sharing slides drops out of the meeting because of, e.g., Internet hiccups, the presenter can immediately re-share the slides after re-joining the meeting (without having to be named as a host or co-host). A meeting host would not want to allow all participants to share screens, however, unless the participants are trusted.
- A host can kick a participant out of a meeting, but that participant can re-enter the meeting room unless the "Allow removed participants to rejoin" feature is disabled.
- A meeting host can report an aberrant user to Zoom if that feature ("Report participants to Zoom") is enabled in the host's settings.
- Some meeting participants like to communicate with other meeting participants privately through the chat feature of Zoom. See here. It approximates sitting next to (or close to) others in a physical room. If you want to allow this kind of background chatter, enable "Allow meeting participants to send a private 1:1 message to another participant" in your profile settings on Zoom.
- Although I did not use them for the NBLSC, meeting hosts should consider the desirability of using waiting rooms, password requirements, meeting locks and other security features, and breakout rooms to manage participants.
I am sure there is more I could say, but these were the main things I learned that were not necessarily things I had picked up in establishing and engaging Zoom meetings for classroom activities. While some of the above-listed items may be of limited utility in using Zoom to teach online (as opposed to using Zoom to host a two-day, 31-meeting conference), if you substitute "class" for "meeting" in the listed items, you can get a sense of how some of them may apply to class activities in general or in specific circumstances, too. In any event, i have come to the understanding that we all can benefit from knowing as much as possible about the technologies were are using as we continue to navigate the virtual conference and online teaching waters as business law professors.
Friday, June 19, 2020
If you're like me, you're wondering how you can improve your teaching after last Spring's foray into online learning. I wasn't nearly as traumatized as many of my colleagues because I had already taught Transactional Drafting online asynchronously for several semesters. This summer, I'm teaching two courses -- Transactional Drafting asynchronously and a hybrid course on Regulatory Compliance, Corporate Governance, and Sustainability. I'm making a list of tips based on my experience and will post about that in the future. In the meantime, I've started to think about how I can improve next semester when I will be teaching all of my courses online. Since I know that so many students had a mediocre to poor experience with emergency online teaching, I've spent a lot of time on webinars learning how to do better. This will be the first in a series of posts on what I'm learning on course design, learning styles, and best practices. But let's start with the basic questions to ask yourself as you're preparing for next semester.
First, think about whether you want to teach synchronously or not. If you're looking for maximum flexibility for both you and the students, then asynchronous teaching makes sense. If you're teaching solely asynchronously, then you need to consider how to make your videos and content as engaging as possible. You also have to do something to build community within the class and a rapport between you and the student. If you're thinking of doing a hybrid, perhaps using a flipped classroom, recognize that it will take longer to prepare than you would think. For my summer compliance course, I record videos on substantive legal issues, monitor discussion on the class discussion board, prepare questions for students to answer prior to class using Echo 360, and then review those answers all prior to teaching the 2-credit course live on Zoom. This requires substantially more time than normal class prep, but it's well worth it because we can use class time to do simulations or interact with guest speakers from all over the world. More about these issues will come in a future post.
Second, learn everything you can about the platforms you will use next semester so that you can master all of the features that will make your class more engaging. Even if your institution does not require you to use one platform, try to come to some consensus anyway. Students do not want to learn three different systems so do what you can to make sure that the platforms are uniform and intuitive for them. Then think of whether all of the tools you're already using can integrate with that platform. Our university is using Blackboard, Echo 360, and Zoom. The students will have one place for logon and access everything from there. Next, think about whether you want to have students use discussion boards to interact or maybe develop Slack or Microsoft Teams instead. Since many students are uncomfortable speaking in class on video, we will have to work harder to foster classroom discussion. Teams and Slack channels can help, and many students will already use them for internships or business purposes. The more intentional you are, the better an experience your students will have, even if it takes some time to determine what works for you. If you have a research assistant or student you can contact, find out which tools did and didn't work from their Spring experience. See if your university will survey students for feedback on online learning,
Third, think about whether you have the right equipment. Do you need a separate headset, webcam, or microphone? I actually don't use any of those even though I have a separate microphone. How stable is your internet? Think about whether you might need an upgraded modem or even your own mesh network. One thing I absolutely recommend is a ring light. There are hundreds of YouTube videos on how to light yourself properly using your household lamps. But, I've found that having a separate ring light makes my videos brighter and more professional looking.
Finally, while you're designing your course, make sure you're thinking of the Americans with Disabilities Act. At UM, we've been told to do the following for presentations:
- provide wording for links and avoid using “click here” for the links;
- use sans serif fonts for easy readability;
- use dark font colors on light backgrounds;
- avoid extremely bright colors as a background color;
- use one font throughout the site;
- avoid overuse of all CAPS, bold or italics;
- avoid underlining words, as the screen reader can mistake it for a navigation link;
- make sure that images are clear and optimized for efficient loading;
- limit the use of animated and blinking images text, or cursors because they can cause seizures for some people;
- make sure that audio file lengths are adequate to meet the goals of the activity without being too large to restrict users’ ability to download the file on computers with lower bandwidths;
- provide a written transcript with all audio files; and
- provide closed-captioning or has accompanying text-based scripts for all videos.
After you've thought through some of these baseline issues, you can then turn to making your content as interesting and accessible for your students as possible. Future posts will cover tips for effective presentations, tools to increase engagement, and other best practices. In the meantime, if you have any tips to share or areas you want covered, please comment below.
Monday, June 15, 2020
The full schedule for the 2020 National Business Law Scholars Conference, which is being hosted on Zoom Thursday and Friday of this week, is now available. You can find it here. If and as additional changes are necessary, we will re-post.
As is always the case, the conference includes folks presenting work in a variety of areas of business law. These traditional paper panels are the heart of the conference. In addition, as I noted in my post last week, we are including three plenary sessions--one on "Business Law in the COVID-19 Era," one reflecting on teaching business law in the current environment, and one on current bankruptcy law and practice issues. There is something for almost everyone in the business law space in the conference program.
I am pleased and proud to note that several of my fellow bloggers from the Business Law Prof Blog are participating in the conference this year. They include (in addition to me): Colleen Baker, Ben Edwards, Ann Lipton, and Marcia Narine Weldon. I hope many of you will join us for all or part of the program and offer comments to colleagues on and relating to their work.
Monday, April 13, 2020
This post again comes to us from friend-of-the BLPB Nadia B. Ahmad. Her offering is in the tradition of similar posts published by my co-bloggers in the past that focus on videos that can be used in teaching various topics relevant to business law. I remember this post, for example, by Marcia Narine Weldon on blockchain teaching resources. Again, thanks to Nadia for contributing to our knowledge and our blog. I hope that others will be encouraged to offer suggestions in the comments below about other helpful online video resources that they know about.
Below is a list of online video resources for business law related topics.
- Panic: The Untold Story of the 2008 Financial Crisis(1 hour, 35 minutes)
VICE on HBO looks at factors that led to the 2008 financial crisis and the efforts made by then-Treasury Secretary Henry Paulson, Federal Reserve Bank of New York President Timothy Geithner, and Federal Reserve Chair Ben Bernanke to save the United States from an economic collapse. The feature-length documentary explores the challenges these men faced, as well as the consequences of their decisions.
- To Catch a Trader
PBS Frontline correspondent Martin Smith goes inside the government’s ongoing, seven-year crackdown on insider trading, drawing on exclusively obtained video of hedge fund titan Steven A. Cohen, incriminating FBI wiretaps of other traders, and interviews with both Wall Street and Justice Department insiders.
- How to Illegally Profit From a Pandemic: Insider Trading! (LegalEagle’s Real Law Review) (20 minutes)
LegalEagle is designed for law students and gives them an insider’s view to the legal system.
- PanamaPapers – The Shady World of Offshore Companies(55 minutes)
For decades, presidents, drug smugglers and criminals have used a Panamanian law firm to hide their accounts and valuables. This is revealed in documents reviewed by media partners around the world, including NDR and WDR. A total of 370 journalists from 78 countries evaluated around 11.5 million documents in the course of their reporting on the “PanamaPapers.” An anonymous source provided the data to Germany’s Süddeutsche Zeitung. The paper then shared it with the International Consortium of Investigative Journalists (ICIJ) and partners across the globe, including NDR and WDR.
Tuesday, December 24, 2019
Happy holidays! Billions of people around the world are celebrating Christmas or Hanukah right now. Perhaps you’re even reading this post on a brand new Apple Ipad, a Microsoft Surface, or a Dell Computer. Maybe you found this post via a Google search. If you use a product manufactured by any of those companies or drive a Tesla, then this post is for you. Last week, a nonprofit organization filed the first lawsuit against the world’s biggest tech companies alleging that they are complicit in child trafficking and deaths in the cobalt mines of the Democratic Republic of Congo. Dodd-Frank §1502 and the upcoming EU Conflict Minerals Regulation, which goes into effect in 2021, both require companies to disclose the efforts they have made to track and trace "conflict minerals" -- tin, tungsten, tantalum, and gold from the DRC and surrounding countries. DRC is one of the poorest nations in the world per capita but has an estimated $25 trillion in mineral reserves (including 65% of the world's cobalt). Armed militia use rape and violence as a weapon of war in part so that they control the mineral wealth. The EU and US regulators believe that consumers might make different purchasing decisions if they knew whether companies source their minerals ethically. The EU legislation, notably, does not limit the geography to the DRC, but instead focuses on conflict zones around the world.
If you’ve read my posts before, then you know that I have written repeatedly about the DRC and conflict minerals. After visiting DRC for a research trip in 2011, I wrote a law review article and co-filed an amicus brief during the §1502 litigation arguing that the law would not help people on the ground. I have also blogged here about legislation to end the rule, here about the EU's version of the rule, and here about the differences between the EU and US rule. Because of the law and pressure from activists and socially-responsible investors, companies, including the defendants, have filed disclosures, joined voluntary task forces to clean up supply chains, and responded to shareholder proposals regarding conflict minerals for years. I will have more on those initiatives in my next post. Interestingly, cobalt, the subject of the new litigation, is not a “conflict mineral” under either the U.S. or E.U. regulation, although, based on the rationale behind enacting Dodd-Frank §1502, perhaps it should have been. Nonetheless, in all of my research, I never came across any legislative history or materials discussing why cobalt was excluded.
The litigation makes some startling claims, but having been to the DRC, I’m not surprised. I’ve seen children who should have been in school, but could not afford to attend, digging for minerals with shovels and panning for gold in rivers. Although I was not allowed in the mines during my visit because of a massacre in the village the night before, I could still see child laborers on the side of the road mining. If you think mining is dangerous here in the U.S., imagine what it’s like in a poor country with a corrupt government dependent on income from multinationals.
The seventy-nine page class action Complaint was filed filed in federal court in the District of Columbia on behalf of thirteen children claiming: (1) a violation of the Trafficking Victims Protection Reauthorization Act of 2008; (2) unjust enrichment; (3) negligent supervision; and (4) intentional infliction of emotional distress. I’ve listed some excerpts from the Complaint below (hyperlinks added):
Defendants Apple, Alphabet, Dell, Microsoft, and Tesla are knowingly benefiting from and providing substantial support to this “artisanal” mining system in the DRC. Defendants know and have known for a significant period of time the reality that DRC’s cobalt mining sector is dependent upon children, with males performing the most hazardous work in the primitive cobalt mines, including tunnel digging. These boys are working under stone age conditions for paltry wages and at immense personal risk to provide cobalt that is essential to the so-called “high tech” sector, dominated by Defendants and other companies. For the avoidance of doubt, every smartphone, tablet, laptop, electric vehicle, or other device containing a lithium-ion rechargeable battery requires cobalt in order to recharge. Put simply, the hundreds of billions of dollars generated by the Defendants each year would not be possible without cobalt mined in the DRC….
Plaintiffs herein are representative of the child cobalt miners, some as young as six years of age, who work in exceedingly harsh, hazardous, and toxic conditions that are on the extreme end of “the worst forms of child labor” prohibited by ILO Convention No. 182. Some of the child miners are also trafficked. Plaintiffs and the other child miners producing cobalt for Defendants Apple, Alphabet, Dell, Microsoft, and Tesla typically earn 2-3 U.S. dollars per day and, remarkably, in many cases even less than that, as they perform backbreaking and hazardous work that will likely kill or maim them. Based on indisputable research, cobalt mined in the DRC is listed on the U.S. Department of Labor’s International Labor Affairs Bureau’s List of Goods Produced with Forced and Child Labor.
When I mentioned above that I wasn’t surprised about the allegations, I mean that I wasn’t surprised that the injuries and deaths occur based on what I saw during my visit to DRC. I am surprised that companies that must perform due diligence in their supply chains for conflict minerals don’t perform the same kind of due diligence in the cobalt mines. But maybe I shouldn't be surprised at all, given how many companies have stated that they cannot be sure of the origins of their minerals. In my next post, I will discuss what the companies say they are doing, what they are actually doing, and how the market has reacted to the litigation. What I do know for sure is that the Apple store at the mall nearest to me was so crowded that people could not get in. The mall also has a Tesla showroom and people were gearing up for test drives. Does that mean that consumers are not aware of the allegations? Or does that mean that they don’t care? I’ll discuss that in the next post as well.
Wishing you all a happy and healthy holiday season.
December 24, 2019 in Compliance, Corporate Personality, Corporations, CSR, Current Affairs, Ethics, Financial Markets, Human Rights, Litigation, Marcia Narine Weldon, Securities Regulation, Shareholders | Permalink | Comments (0)
Saturday, September 7, 2019
Have you ever wanted to learn the basics about blockchain? Do you think it's all hype and a passing fad? Whatever your view, take a look at my new article, Beyond Bitcoin: Leveraging Blockchain to Benefit Business and Society, co-authored with Rachel Epstein, counsel at Hedera Hashgraph. I became interested in blockchain a year ago because I immediately saw potential use cases in supply chain, compliance, and corporate governance. I met Rachel at a Humanitarian Blockchain Summit and although I had already started the article, her practical experience in the field added balance, perspective, and nuance.
The abstract is below:
Although many people equate blockchain with bitcoin, cryptocurrency, and smart contracts, the technology also has the potential to transform the way companies look at governance and enterprise risk management, and to assist governments and businesses in mitigating human rights impacts. This Article will discuss how state and non-state actors use the technology outside of the realm of cryptocurrency. Part I will provide an overview of blockchain technology. Part II will briefly describe how public and private actors use blockchain today to track food, address land grabs, protect refugee identity rights, combat bribery and corruption, eliminate voter fraud, and facilitate financial transactions for those without access to banks. Part III will discuss key corporate governance, compliance, and social responsibility initiatives that currently utilize blockchain or are exploring the possibilities for shareholder communications, internal audit, and cyber security. Part IV will delve into the business and human rights landscape and examine how blockchain can facilitate compliance. Specifically, we will focus on one of the more promising uses of distributed ledger technology -- eliminating barriers to transparency in the human rights arena thereby satisfying various mandatory disclosure regimes and shareholder requests. Part V will pose questions that board members should ask when considering adopting the technology and will recommend that governments, rating agencies, sustainable stock exchanges, and institutional investors provide incentives for companies to invest in the technology, when appropriate. Given the increasing widespread use of the technology by both state and non-state actors and the potential disruptive capabilities, we conclude that firms that do not explore blockchain’s impact risk obsolescence or increased regulation.
Things change so quickly in this space. Some of the information in the article is already outdated and some of the initiatives have expanded. To keep up, you may want to subscribe to newsletters such as Hunton, Andrews, Kurth's Blockchain Legal Resource. For more general information on blockchain, see my post from last year, where I list some of the videos that I watched to become literate on the topic. For additional resources, see here and here.
If you are interested specifically in government use cases, consider joining the Government Blockchain Association. On September 14th and 15th, the GBA is holding its Fall 2019 Symposium, “The Future of Money, Governance and the Law,” in Arlington, Virginia. Speakers will include a chief economist from the World Bank and banking, political, legal, regulatory, defense, intelligence, and law enforcement professionals from around the world. This event is sponsored by the George Mason University Schar School of Policy and Government, Criminal Investigations and Network Analysis (CINA) Center, and the Government Blockchain Association (GBA). Organizers expect over 300 government, industry and academic leaders on the Arlington Campus of George Mason University, either in person or virtually. To find out more about the event go to: http://bit.ly/FoMGL-914.
Blockchain is complex and it's easy to get overwhelmed. It's not the answer to everything, but I will continue my focus on the compliance, governance, and human rights implications, particularly for Dodd-Frank and EU conflict minerals due diligence and disclosure. As lawyers, judges, and law students, we need to educate ourselves so that we can provide solid advice to legislators and business people who can easily make things worse by, for example, drafting laws that do not make sense and developing smart contracts with so many loopholes that they cause jurisdictional and enforcement nightmares.
Notwithstanding the controversy surrounding blockchain, I'm particularly proud of this article and would not have been able to do it without my co-author, Rachel, my fantastic research assistants Jordan Suarez, Natalia Jaramillo, and Lauren Miller from the University of Miami School of Law, and the student editors at the Tennessee Journal of Business Law. If you have questions or please post them below or reach out to me at firstname.lastname@example.org.
September 7, 2019 in Compliance, Conferences, Contracts, Corporate Governance, Corporations, CSR, Current Affairs, Financial Markets, Human Rights, Law Reviews, Lawyering, Legislation, Marcia Narine Weldon, Securities Regulation, Shareholders, Technology | Permalink | Comments (0)
Friday, August 23, 2019
I had planned to write about the Statement on the Purpose of a Corporation signed by 200 top CEOs. If you read this blog, you've likely read the coverage and the varying opinions. I'm still reading the various blog posts, statements by NGOs, and 10-Ks of some of the largest companies so that I can gather my thoughts. In the meantime, many of these same companies will be at the UN Forum on Business and Human Rights touting their records. I've been to the Forum several times, and it's worth the trip. If you're interested in joining over 2,000 people, including representatives from many of the signatories of the Statement, see below. You can register here:
The UN annual Forum on Business and Human Rights is the global platform for stock-taking and lesson-sharing on efforts to move the UN Guiding Principles on Business and Human Rights from paper to practice. As the world’s foremost gathering in this area, it provides a unique space for dialogue between governments, business, civil society, affected groups and international organizations on trends, challenges and good practices in preventing and addressing business-related human rights impacts. The first Forum was held in 2012. It attracts more than 2,000 experts, practitioners and leaders for three days of an action- and solution-oriented dialogue.The Forum was established by the UN Human Rights Council in 2011 “to discuss trends and challenges in the implementation of the Guiding Principles and promote dialogue and cooperation on issues linked to business and human rights, including challenges faced in particular sectors, operational environments or in relation to specific rights or groups, as well as identifying good practices” (resolution 17/4, paragraph 12).
The Forum addresses all three pillars of the Guiding Principles:
- The State duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation and adjudication;
- The corporate responsibility to respect human rights, which means to avoid infringing on the rights of others and to address adverse impacts with which a business is involved; and
- The need for access to effective remedy for rights-holders when abuse has occurred, through both judicial and non-judicial grievance mechanisms
The Forum is guided and chaired by the UN Working Group on Business and Human Rights and organized by its Secretariat at the Office of the UN High Commissioner for Human Rights (OHCHR).
If you have any questions about the value of attending the Forum, feel free to reach out to me at email@example.com.
August 23, 2019 in Conferences, Corporate Personality, Corporations, CSR, Current Affairs, Human Rights, International Business, International Law, Marcia Narine Weldon, Shareholders, Social Enterprise | Permalink | Comments (0)