Friday, November 4, 2022

How Generation, Nationality, and Expertise Influence Stakeholder Prioritization of Tech Social Issues- Pt. 2

Last month, I posted about an experiment I conducted with students and international lawyers. I’ve asked my law student, Kaitlyn Jauregui to draft this post summarizing the groups’ reasoning and provide her insights. Next week, I’ll provide mine in light of what I’m hearing at various conferences, including this week’s International Bar Association meeting. This post is in her words.

After watching The Social Dilemma, participants completed a group exercise by deciding which social issues were a priority in the eyes of different tech industry stakeholders. The Social Dilemma is a 2020 docudrama that exposes how social media controls that influences the behavior, mental health, and political views of users by subjecting them to various algorithms. Director Jeff Orlowski interviewed founding and past tech employees of some of the biggest companies in Silicon Valley to bring awareness to viewers.  

Groups of primarily American college students, primarily American law students, one group of Latin American lawyers, and one group of international lawyers completed the exercise. Each of the groups deliberated from the perspective of a CEO, investor, consumer, or NGO.  Acting as that stakeholder, the team then ranked the following issues in order of importance: Incitements to violence, Labor Issues, Suppression of Speech, Mental Health, Surveillance, and Fake News. 

How The Groups Performed

The college students attend an American law school, but they are not necessarily all American. The groups’ logic behind their rankings could not be provided. I provided the rankings in the last post.

Law Students

The law students attend and American law school, but they are not necessarily all American. They considered six social issues.

Team CEO: Law Students

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Mental Health

4.    Fake News

5.    Suppression of Speech

6.    Incitements to Violence

The law students assigned to view the issues as a CEO based their rankings on an internal to external approach. They believed the CEO is responsible for the operations of the company so would first try to solve internal issues such as labor issues because that would directly affect the bottom line. Surveillance and mental health ranked #2 because the team assumed that these issues directly related to customer satisfaction and retention. Because this group took on the role as a tech CEO and not a social media CEO, they did not view 4-6 as important. Fake news was only relevant if it was about the company. Suppression of speech was not problematic to them because it would not directly impact their business. Finally, they did not view incitement to violence as relevant to the business operations so ranked it last.

Team Investor: Law Students

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Surveillance

4.    Suppression of Speech

5.    Fake News

6.    Mental Health

The law students who prioritized social issues as if they were an Investor approached the task considering market forces. They chose labor issues first because it poses challenges to business operations. Whatever looks bad for revenue generation such as incitement to violence and surveillance means their investment would look bad as well. It is important to note they viewed this assignment as an institutional investor. The remaining factors were not imperative to the success of the tech company so were ranked lower.

Team NGO: Law Students

1.    Fake News

2.    Incitement to Violence

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    Suppression of Speech

The law students who took on a role as an NGO based their sense of urgency on the danger and risks the involved in each issue. At the top was fake news because they thought misinformation when taken as fact was unhealthy for making decisions and forming opinions. Incitement to violence closely followed because political polarization can lead to hateful actions outside of social media. They found mental health to be important because of statistics showing teens committing self-harm or worse as a result of social media use. Although labor Issues are abroad, the NGO team could not ignore it. Surveillance was not key to them because they believed platforms are already taking measures against it. And lastly, suppression of speech was not as important to them as deleting hate speech and fake news.

Team Consumer: Law Students

1.    Surveillance

2.    Mental Health

3.    Incitement to Violence

4.    Suppression of Speech

5.    Fake News

6.    Labor Issues in Supply Chain

The law students who took on their natural roles as consumers found social issues more important than financial forces. They referred to the many advertisements that tech companies like Apple and Google are posting against surveillance. The effects of social media on mental health and even physical health also stood out to them. As a group of law students, they are informed individuals who can spot fake news so did not see that as a priority. Lastly, labor issues are not in the consumers’ sight so are out of mind and therefore not a priority.

Latin American Lawyers

*The Latin American Lawyers did not consider Fake News or Incitements to Violence.

Team CEO: Latin American Lawyers

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Suppression of Speech

4.    Mental Health

5.    -

6.    -

The Latin American lawyers ranked the social issues regarding business success and long-term goals. Labor issues were their top concern because it influences the legal challenges faced by the company and the costs of production. “Information is power” so surveillance restrictions would greatly decrease money earned from selling data gathered. They did not see suppression of speech as an issue because the company itself is not limited. Mental health was ultimately last because it does not impair business operations.

Team Investor: Latin American Lawyers

1.    Mental Health

2.    Surveillance

3.    Labor Issues in the Supply Chain

4.    Suppression of Speech

5.    -

6.    -

The Latin American lawyers listed their priorities as a socially responsible Investor. Mental health triggered the most urgency for them because the negative influence of social media on users is growing and is not slowing down. Heavy surveillance conflicts with the rights of persons like themselves so it is a great risk for them. Although labor issues were important, they did not think of it as a widespread issue affecting large populations of people. Lastly, suppression of speech was not a concern at all for them.

Team NGO: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers who participated as an NGO focused their efforts on user experience and rights. They found surveillance to be a growing concern and a human right violation for users. Suppression of speech was also very important to them, especially in the scope of the team’s nationality because of political distress in their home countries. For countries with political instability, their citizens are more conscious of infringed rights through social media. Fake news and censorship on virtual platforms can ultimately destroy the democracy of countries in their point of view. The team preferred life over work so chose to rank mental health higher than labor issues.

Team Consumer: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers used their personal perspective as consumers to rank in accordance with social concerns. Surveillance was seen as a major problem because it makes users uncomfortable knowing that their activity is tracked and sold as data. Suppression of speech was grouped with fake news as an important issue regarding the rights and freedom of the consumers. The gatekeeping of information from mainstream media in general was a concern for these consumers because they feel as if they are being controlled and concealed from the truth. Although the negative mental health results on teens from social media is important, the consumers thought this was the responsibility of parents and not of other consumers. Labor issues were of no concern because the consumers felt as if they have no control over the matter. 

International Lawyers

The International Group comprised of participants from Bolivia, Brazil, Bulgaria, Canada, Colombia, Ecuador, Egypt, Ethiopia, India, Iran, Jamaica, Mexico, Nepal, Sweden, Switzerland, and Ukraine. The group was not assigned to rank Mental Health as a social issue. The groups’ logic behind their rankings could not be provided.

Team CEO: International Lawyers

1.    Fake News

2.    Labor Issues in the Supply Chain

3.    Surveillance

4.    Incitement to Violence

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Socially Responsible)

1.    Incitement to Violence

2.    Fake News

3.    Labor Issues in the Supply Chain

4.    Surveillance

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Institutional)

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Suppression of Speech

4.    Fake News

5.    Surveillance

6.    -

Team NGO: International Lawyers

1.    Fake News

2.    Labor Issues in Supply Chain

3.    Suppression of Speech

4.    Incitements to Violence

5.    Surveillance

6.    -

 

Team Consumer: International Lawyers

1.    Incitements to Violence

2.    Suppression of Speech

3.    Fake News

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    -

 Insights

When given a business or financial oriented role, the teams ranked the social issues by focusing on whether it impacts company performance. Teams with community or advocate roles tended to rank the social issues according to impact on society. Team CEO prioritized labor issues and surveillance the most. Labor issues along with incitements to violence were of top concern for Team Investor. Fake news was the number one issue for Team NGO. Team Consumer, which reflects the average personal view of the participants, believed incitements to violence and surveillance were the most pressing social issues in the tech industry. Labor issues were the least important to the consumer participants, which is interesting in scope of consumer purchase decisions overall and not just in tech.

The Team Consumer data is reflective of each of the groups’ personal beliefs because all participants are also consumers. The College Students prioritized mental health. Both the law students and the Latin American lawyers found surveillance the most important tech issue. International lawyers instead thought incitement to violence more pressing. A possible explanation is that people in the U.S. and Latin America are trying to protect their privacy from intrusive technology. Because the international lawyers had participants from countries where incitement to violence are occurring, that may be why it was important to them.

Suppression of speech closely followed for Latin American Lawyers and International Lawyers whereas Mental Health was the second priority for the primarily American law Students. Many citizens of countries around the globe face oppressive governments that censor speech which may be influential in why Suppression of Speech was ranked highly. In the United States, citizens are guaranteed freedom of speech and press which is why this issue may not be as concerning for them. American teens also suffer from more mental illness as a result of social media use, possibly why it is second place.

Practices in corporate culture and opinions on social issues are influenced by the ethnic makeup of the employees. Although the stakeholder roles the groups took are the most determinative factor, their nationality is naturally a bias in their decision-making.

The Lewis Model is a triangular spectrum that identifies the prominent features of different cultures. Richard Lewis spoke 10 languages, visited 135 countries, and work in over 20 of them to find observable variability in social behavior. He recognized that stereotypes are unfair, but also emphasized that social norms are standards in each country. There are three defined points of culture: Linear Active, Multi-active, and Reactive.

  • Linear actives — those who plan, arrange, organize, do one thing at a time, follow action chains. They are truthful rather than diplomatic and do not fear confrontation. Their work and as well as personal life is based on logic rather than emotions. Linear actives like facts, fixed agenda and they are very job oriented. They are able to separate social-private and professional life.
  • Multi-actives — people belonging to this cultural category are able to do many things at once, planning their priorities not according to a time schedule, but according to the relative thrill or importance that each appointment brings with it. These cultures are very talkative and impulsive. These characteristics predict their orientation on people. They feel uncomfortable in silence. Multi-active people prefer face to face sessions.
  • Reactives — member of this group has in the priority list courtesy and respect on the top. This group is best listening culture. Listening quietly, reacting calmly and carefully to the other side's proposals are their traits as well. Reactive cultures are the world’s best listeners in as much as they concentrate on what the speaker is saying, do not interrupt a speaker while the discourse or presentation is on-going. Reactive people have large reserves of energy. Reactives tend to use names less frequently than other cultural categories.

How does the Lewis Model explain the results?

The primarily American college and law students fall under linear-active with their priorities aligned with individual rights and performance.

The Latin American lawyers are multi-active, think about the social issues in terms of impact on the community and on building relationships.

The International lawyers are comprised of participants all over the world, bringing in aspects from all over the spectrum.

The Lewis Model most likely plays a part in how each participant individually arrived at their own rankings and how they then communicated to agree on a reflective ranking together. The conversations guiding to the final result would have probably shown more insight as to how and why these social issues are important.

Age

The age of the participants is another influential factors because of the generational variation in trust in surveilling technologies. Generation Z, Millennials, and Generation X+ were asked in a survey how comfortable they felt with programs like Alexa or Siri on a scale from 1 to 10, 1 being very and 10 being not.

Generation Z: 7.73

Millennials: 8.28

Generation X+: 8.90

Older generations are more uneasy about virtual assistant technology.

With age comes more experience and better foresight. Researchers in Texas found that “older adults use the experience in decision-making accumulated over their lifetime to determine the long-term utility and not just the immediate benefit before making a choice. However, younger adults tend to focus their decision-making on instant gratification.”

How does age explain the results?

The majority of the college and law students were Generation Z or Millennials whereas the practicing attorneys were mostly Millennials or more senior.

As generations progress, younger people are more comfortable with surveillance technology than older people.

Expertise

Expertise of the participants surely impacted how they ranked social issues. The knowledge of experts in comparison to novices gives them a wider and practical approach to business and social issues. Here are some key aspects:

  1. Experts notice features and meaningful patterns of information that are not noticed by novices.
  2. Experts have acquired a great deal of content knowledge that is organized in ways that reflect a deep understanding of their subject matter.
  3. Experts’ knowledge cannot be reduced to sets of isolated facts or propositions but, instead, reflects contexts of applicability: that is, the knowledge is “conditionalized” on a set of circumstances.
  4. Experts are able to flexibly retrieve important aspects of their knowledge with little attentional effort.
  5. Though experts know their disciplines thoroughly, this does not guarantee that they are able to teach others.
  6. Experts have varying levels of flexibility in their approach to new situations.

Perhaps the practicing attorneys foresaw further down the line as to why one social issue was more pressing than another.

Thank you, Kaitlyn for providing your analysis of the results. Next week, I’ll provide mine.

November 4, 2022 in Business Associations, Comparative Law, Compliance, Corporate Personality, Corporations, CSR, Current Affairs, Human Rights, International Law, Law School, Lawyering, Marcia Narine Weldon, Social Enterprise, Teaching | Permalink | Comments (0)

Wednesday, October 26, 2022

ESG and Mrs. Thompson

“Human beings are far more complicated and enigmatic and ambiguous than languages or mathematical concepts.” – Iris Murdoch, The Sovereignty of Good Over Other Concepts (88)

During lunch yesterday, I attended a panel on “Measuring the S in ESG” at Belmont University's Hope Summit. The presenters made plenty of thoughtful comments, but I did not leave with much hope that we will be able to accurately measure social good. (The panel also seemed to confirm that most institutional investors view ESG data primarily as a tool to assist in achieving excellent financial performance, and most are not very interested in sacrificing profits, at least not for more than a few years.)

Later that afternoon, at a celebration for our neighborhood bus driver, I began to realize why I had so little hope for numerical scores of social good. Glendra Chapman Thompson has been driving the same bus route in our neighborhood for 32 years; she is only retiring now due to serious health issues. To say she is beloved is an understatement. Her joy emanates. She is patient, kind, and always smiling. She knows the name of every child, and you can sense that she cares deeply for each one. As Iris Murdoch writes in the opening quote, languages or mathematical concepts cannot capture Mrs. Thompson's essence.

Organizations are made up of human beings like Mrs. Thompson. While I think we could agree that Mrs. Thomson has created a massive amount of social good, we can’t capture her goodness in a number. Her love is irreducible.  

Attempting to measure social good is not only practically impossible, but the attempted measurement may also do harm. By attempting to reduce the impact of someone like Mrs. Thompson to a number, you would miss nuance and beauty. Further, by measuring and marketing social good you can cut against humility, which is often considered a cornerstone virtue.  

In the corporate context, there may be some ESG data that is helpful. (Wage data, for example, can be telling). But I think we should be honest about the many things we cannot measure. Stories and interviews may be needed, and the most significant social good may be the least flashy.  

Watch the video our school system did for Mrs. Thompson here. We often walk our children to school, but we would let them ride the bus the 800m to school on occasion simply to be in her caring presence. We will miss you Mrs. Thompson.

October 26, 2022 in Haskell Murray, Service, Social Enterprise | Permalink | Comments (0)

Wednesday, July 6, 2022

Neighborliness, Ideals, and Business

IMG_4568

(Some neighborhood children playing duck-duck-goose in our common space on July 4th.)

Recently, I finished philosopher David McPherson’s book The Virtues of Limits published by Oxford University Press this year. While I disagree with McPherson in certain areas, I highly recommend his book. I was reacting to the book with friends and the author before I even completed it. Perhaps it would have been best to refrain from commenting until I had finished, but it was a sign that the book was quite thought-provoking. The book was well-written and accessible, even to a non-philosopher like me. 

Given that this post only has a loose connection to business law, I will place the remainder of my thoughts below the page break. 

 

Continue reading

July 6, 2022 in Books, Business Associations, Ethics, Haskell Murray, Religion, Social Enterprise | Permalink | Comments (4)

Friday, April 8, 2022

Wagner Graduate Research Fellowship at NYU

The NYU Pollack Center invites applications for a Wagner Fellowship for the 2022-2023 academic year.  Thanks to a generous grant of the Leonard Wagner Testamentary Trust, the Center for Law & Business offers a one-year graduate research fellowship to help develop future law academics with an interest in the social control of business institutions and the social responsibility of business.

Requirements:

Applicants must hold a JD or LLM degree and have practiced law for two years. Preference is given to applicants with a research interest in the legal regulation of business and ethics, and to those who have a degree from NYU School of Law. Fellows are expected to make a full-time commitment to their graduate research at the center. Involvement in Pollack Center research ventures is required.

How to Apply:

Applications must be received by May 16th 2022. Applicants must submit the following materials*:

  • Statement describing academic and research interests
  • Proposal for the research project during the fellowship year
  • Curriculum Vitae
  • Law school academic transcripts
  • A letter of recommendation
  • A writing sample, preferably a scholarly paper written in the past two years

*Not all materials are required for every applicant.  Please inquire regarding required materials.

More information is available at the Pollack Center Website. Please direct all materials to Stephen Choi and David Yermack, Directors. We prefer that you first e-mail materials to Anat Carmy-Wiechman at wiechman@mercury.law.nyu.edu, followed by a physical copy mailed to the NYU Center for Law & Business at 139 MacDougal Street, Room 116, New York, NY 10012.

Please direct inquiries to Anat Carmy Wiechman at wiechman@mercury.law.nyu.edu or (212) 992-6173.

April 8, 2022 in Business School, Ethics, Joan Heminway, Jobs, Social Enterprise | Permalink | Comments (0)

Monday, October 25, 2021

Heminway on Murray on Reforming the Benefit Corporation

Last week, I posted about the first of my two published commentaries from the 2020 Business Law Prof Blog Symposium, Connecting the Threads IV.  That earlier post related to my comments on an article written by BLPB co-blogger Stefan Padfield.  The subject?  Public company shareholder proposals--specifically, viewpoint diversity shareholder proposals.

This week, I am posting on the second commentary, History, Hope, and Healthy Skepticism, 22 TRANSACTIONS: TENN. J. BUS. L. 223 (2021).  This commentary offers my observations on co-blogger J. Haskell Murray’s, The History and Hope of Social Enterprise Forms, 22 TRANSACTIONS: TENN. J. BUS. L. 207 (2021).  The main body of the abstract follows.

In this comment, I play the role of the two-year-old in the room. Two-year-old children are well known to ask “why,” and that is what I do here. Specifically, this comment asks “why” in two aspects. First, I ask why we do (or should) care about making modifications to existing social enterprise practices and laws, the subject of Professor Murray’s essay. Second, assuming we do (or should) care, I ask why the changes Professor Murray suggests make sense. My commentary is largely restricted to the benefit corporation form because corporate forms loom large in the debates relevant to Professor Murray’s essay and because the benefit corporation is acknowledged to be the most widely adopted corporate form as among the social enterprise forms of entity.

And so, Haskell and I are "at it again" over whether the benefit corporation is worth reforming/saving.  More precisely, I am (again) picking a bit of an academic fight with Haskell.  His good nature and patience in response to my continued questions and push-backs have been and are deeply appreciated.

Do/should we care about modifying benefit corporation practices and laws and, if so, do Professor Murray's proposed reforms make sense?  [SPOILER ALERT!]  My bottom line:

I am satisfied—even if not wholly persuaded—that there is a reason to care. Benefit corporations may alter mindsets in a positive way, even if they do not positively or meaningfully alter applicable legal principles. And . . . I am convinced that Professor Murray generally has the right idea in calling for more accountability to a broader base of stakeholders—beyond just shareholders.

So, in the end, I was ready to call a limited truce--or really more of a detente. 

But I do maintain, as Haskell knows, a healthy doubt that the benefit corporation form has any broad-based value (making it hard to agree that amending the standard statutory framework or related practices has any merit).  And it looks like I have a new convert to this cause.  In his recent, provocative thought piece, Capitalism, heal thyself, Alan Palmiter avers as follows:

[W]e don’t really need benefit corporations, those corporations that have a hybrid profit and social/environmental purpose. All the companies that are doing big ESG -- world-changing ESG -- are your garden-variety for-profit (for-shareholder profit) companies. Maybe there are some benefit corporations, like my friend Patagonia, that like the label. But Patagonia didn’t have to be a benefit corporation to do what it’s doing.

That said, there’s a problem with fake benefit corporations, the ones pretending to do ESG. . . .

Alan, as you know, you are beating my drum--a drum I earlier have beaten here, here, and here, among other places, in various ways.  We shall see where it all goes.  But I remain a believer in the ability of the traditional for-profit corporation's ability tio engage in effective, efficient social enterprise and (more broadly) ESG initiatives.

 

October 25, 2021 in Conferences, Haskell Murray, Joan Heminway, Social Enterprise | Permalink | Comments (0)

Friday, September 24, 2021

Ten Ethical Traps for Business Lawyers

I'm so excited to present later this morning at the University of Tennessee College of Law Connecting the Threads Conference today at 10:45 EST. Here's the abstract from my presentation. In future posts, I will dive more deeply into some of these issues. These aren't the only ethical traps, of course, but there's only so many things you can talk about in a 45-minute slot. 

All lawyers strive to be ethical, but they don’t always know what they don’t know, and this ignorance can lead to ethical lapses or violations. This presentation will discuss ethical pitfalls related to conflicts of interest with individual and organizational clients; investing with clients; dealing with unsophisticated clients and opposing counsel; competence and new technologies; the ever-changing social media landscape; confidentiality; privilege issues for in-house counsel; and cross-border issues. Although any of the topics listed above could constitute an entire CLE session, this program will provide a high-level overview and review of the ethical issues that business lawyers face.

Specifically, this interactive session will discuss issues related to ABA Model Rules 1.5 (fees), 1.6 (confidentiality), 1.7 (conflicts of interest), 1.8 (prohibited transactions with a client), 1.10 (imputed conflicts of interest), 1.13 (organizational clients), 4.3 (dealing with an unrepresented person), 7.1 (communications about a lawyer’s services), 8.3 (reporting professional misconduct); and 8.4 (dishonesty, fraud, deceit).  

Discussion topics will include:

  1. Do lawyers have an ethical duty to take care of their wellbeing? Can a person with a substance use disorder or major mental health issue ethically represent their client? When can and should an impaired lawyer withdraw? When should a lawyer report a colleague?
  2. What ethical obligations arise when serving on a nonprofit board of directors? Can a board member draft organizational documents or advise the organization? What potential conflicts of interest can occur?
  3. What level of technology competence does an attorney need? What level of competence do attorneys need to advise on technology or emerging legal issues such as SPACs and cryptocurrencies? Is attending a CLE or law school course enough?
  4. What duties do lawyers have to educate themselves and advise clients on controversial issues such as business and human rights or ESG? Is every business lawyer now an ESG lawyer?
  5. What ethical rules apply when an in-house lawyer plays both a legal role and a business role in the same matter or organization? When can a lawyer representing a company provide legal advice to an employee?
  6. With remote investigations, due diligence, hearings, and mediations here to stay, how have professional duties changed in the virtual world? What guidance can we get from ABA Formal Opinion 498 issued in March 2021? How do you protect confidential information and also supervise others remotely?
  7. What social media practices run afoul of ethical rules and why? How have things changed with the explosion of lawyers on Instagram and TikTok?
  8. What can and should a lawyer do when dealing with a businessperson on the other side of the deal who is not represented by counsel or who is represented by unsophisticated counsel?
  9. When should lawyers barter with or take an equity stake in a client? How does a lawyer properly disclose potential conflicts?
  10. What are potential gaps in attorney-client privilege protection when dealing with cross-border issues? 

If you need some ethics CLE, please join in me and my co-bloggers, who will be discussing their scholarship. In case Joan Heminway's post from yesterday wasn't enough to entice you...

Professor Anderson’s topic is “Insider Trading in Response to Expressive Trading”, based upon his upcoming article for Transactions. He will also address the need for business lawyers to understand the rise in social-media-driven trading (SMD trading) and options available to issuers and their insiders when their stock is targeted by expressive traders.

Professor Baker’s topic is “Paying for Energy Peaks: Learning from Texas' February 2021 Power Crisis.” Professor Baker will provide an overview of the regulation of Texas’ electric power system and the severe outages in February 2021, explaining why Texas is on the forefront of challenges that will grow more prominent as the world transitions to cleaner energy. Next, it explains competing electric power business models and their regulation, including why many had long viewed Texas’ approach as commendable, and why the revealed problems will only grow more pressing. It concludes by suggesting benefits and challenges of these competing approaches and their accompanying regulation.

Professor Heminway’s topic is “Choice of Entity: The Fiscal Sponsorship Alternative to Nonprofit Incorporation.” Professor Heminway will discuss how for many small business projects that qualify for federal income tax treatment under Section 501(a) of the U.S. Internal Revenue Code of 1986, as amended, the time and expense of organizing, qualifying, and maintaining a tax-exempt nonprofit corporation may be daunting (or even prohibitive). Yet there would be advantages to entity formation and federal tax qualification that are not available (or not easily available) to unincorporated business projects. Professor Heminway addresses this conundrum by positing a third option—fiscal sponsorship—and articulating its contextual advantages.

Professor Moll’s topic is “An Empirical Analysis of Shareholder Oppression Disputes.” This panel will discuss how the doctrine of shareholder oppression protects minority shareholders in closely held corporations from the improper exercise of majority control, what factors motivate a court to find oppression liability, and what factors motivate a court to reject an oppression claim. Professor Moll will also examine how “oppression” has evolved from a statutory ground for involuntary dissolution to a statutory ground for a wide variety of relief.

Professor Murray’s topic is “Enforcing Benefit Corporation Reporting.” Professor Murray will begin his discussion by focusing on the increasing number of states that have included express punishments in their benefit corporation statutes for reporting failures. Part I summarizes and compares the statutory provisions adopted by various states regarding benefit reporting enforcement. Part II shares original compliance data for states with enforcement provisions and compares their rates to the states in the previous benefit reporting studies. Finally, Part III discusses the substance of the benefit reports and provides law and governance suggestions for improving social benefit.

All of this and more from the comfort of your own home. Hope to see you on Zoom today and next year in person at the beautiful UT campus.

September 24, 2021 in Colleen Baker, Compliance, Conferences, Contracts, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Delaware, Ethics, Financial Markets, Haskell Murray, Human Rights, International Business, Joan Heminway, John Anderson, Law Reviews, Law School, Lawyering, Legislation, Litigation, M&A, Management, Marcia Narine Weldon, Nonprofits, Research/Scholarhip, Securities Regulation, Shareholders, Social Enterprise, Teaching, Unincorporated Entities, White Collar Crime | Permalink | Comments (0)

Monday, September 13, 2021

AALS Section on Transactional Law & Skills - Extended Submission Deadline

The Section on Transactional Law & Skills has extended its deadline for paper proposals for its program at the 2022 Annual Meeting to Friday, September 17. Submissions can be sent directly to Megan Shaner at mshaner@ou.edu. I cribbed the following from a message she wrote to the section membership last week.  (Thanks, Megan!)

The topic of the section's program this year is "Transactional Lawyering at the Intersection of Business and Societal Well-Being" and, according to the preliminary program for the conference, the program is tentatively scheduled for 11 a.m. to 12:15 p.m. on Friday, January 7, 2022. The first part of the program focuses on how to incorporate ESG issues and impact topics across the transactional curriculum, including in clinics and other experiential courses, as well as in doctrinal courses. The second part of the program consists of scholarly presentations to be selected from the Call for Papers set forth below. If you incorporate ESG, corporate social responsibility, impact investing or governance, or related topics into your scholarship in any way, you should consider submitting your paper in response to the Call for Papers.

CALL FOR PAPERS
AALS SECTION ON TRANSACTIONAL LAW AND SKILLS
Transactional Lawyering at the Intersection of Business and Societal Well-Being
2022 AALS Annual Meeting

The AALS Section on Transactional Law and Skills is pleased to announce a call for papers for its program, “Transactional Lawyering at the Intersection of Business and Societal Well-Being,” at the 2022 annual meeting of the AALS. This program will explore how ESG and broader societal considerations are increasingly influencing the flow of capital in the global marketplace, corporate governance planning, merger and acquisition activity and structures, as well as other transactional topics. The events of 2020, for example, have shifted the focus of business entity governance, equality and access in securities markets, and transactional planning and deal structures in significant and lasting ways – questioning whether current structures and systems are working well for all stakeholders and society more broadly. COVID-19 and social movements have broadened ESG efforts to include previously overlooked issues such as human resource policies (e.g., sick leave, parental leave), workplace health and safety, supply chain management, continuity and emergency planning, and diversity and inclusion hiring practices and training. In addition, proposals are being considered (and some adopted) to require gender diversity on boards of directors as well as additional disclosures related to human capital. This program will look at how transactional lawyering in a variety of contexts can address/respond to recent calls for increased consideration and balancing of ESG issues and impact topics.

The annual meeting will be held virtually from January 5-9, 2022, with the Section on Transactional Law and Skills panel scheduled for Friday, January 7, from 11 a.m.-12:15 p.m. (EST). In addition to the paper presentation, the program will feature a panel focusing on how to incorporate these topics and issues across the transactional curriculum, including in clinics and other experiential courses, as well as in doctrinal courses.

Submission Information:

The Section on Transactional Law and Skills invites any full-time faculty member of an AALS member school who has written an unpublished paper, or who is interested in writing a paper on this topic, to submit a 1 or 2-page proposal or full draft to Megan Shaner, Chair of the Section, at mshaner@ou.edu on or before September 17, 2021. Papers accepted for publication but that will not yet be published as of the 2022 meeting are also welcome. Please remove the author’s name and identifying information from the submission and instead include the author’s name and
contract information in the submission e-mail.

After review and selection by the Section’s Executive Committee, the authors of the selected papers will be notified in mid-September 2021. The Call for Paper presenters will be responsible for paying their registration fee for the conference.

Any inquiries about the Call for Papers should be submitted to the Section Chair Megan Shaner, University of Oklahoma College of Law, at mshaner@ou.edu or (405) 325-6619.

On behalf of the Section on Transactional Law and Skills

Chair: Megan W. Shaner (University of Oklahoma)
Chair-Elect: Eric Chaffee (The University of Toledo)
Past Chair: Matthew Jennejohn (Brigham Young University)

Members of the Executive Committee:

Andrea Boyack (Washburn University)
Patience Crowder (University of Denver)
Cathy Hwang (University of Virginia)
Jay Kesten (Florida State University)
Praveen Kosuri (University of Pennsylvania)
Greg Shill (University of Iowa)

September 13, 2021 in Call for Papers, Conferences, Joan Heminway, Research/Scholarhip, Social Enterprise | Permalink | Comments (0)

Tuesday, July 6, 2021

Social Enterprise Centers

In 2008, my university (Belmont University) was supposedly the first to offer a social entrepreneurship major. Since then, not only have the schools offering majors in social entrepreneurships grown, but many schools have created centers, institutes, or programs dedicated to the area. Below I try to gather these social enterprise centers in universities. The vast majority are in business schools, some are collaborative across campus, and a few are located in other schools such as law, social work, or design. A few have a specifically religious take on business and social good. Happy to update this list with any centers I missed. 

Lewis Institute at Babson https://www.babson.edu/academics/centers-and-institutes/the-lewis-institute/about/# 

Christian Collective for Social Innovation at Baylor https://www.baylor.edu/externalaffairs/compassion/index.php?id=976437

Center for Social Innovation at Boston College https://www.bc.edu/content/bc-web/schools/ssw/sites/center-for-social-innovation/about.html

Watt Family Innovation Center at Clemson https://www.clemson.edu/centers-institutes/watt/

Center for the Integration of Faith and Work at Dayton https://udayton.edu/business/experiential_learning/centers/cifw/index.php

CASE i3 at Duke https://sites.duke.edu/casei3/

Social Innovation Collaboratory at Fordham https://www.fordham.edu/info/23746/social_innovation_collaboratory

Social Enterprise & Nonprofit Clinic at Georgetown  https://www.law.georgetown.edu/experiential-learning/clinics/social-enterprise-and-nonprofit-clinic/

and Beeck Center for Social Impact and Innovation at Georgetown https://beeckcenter.georgetown.edu

Global Social Entrepreneurship Institute at Indiana https://kelley.iu.edu/faculty-research/centers-institutes/international-business/programs-initiatives/global-social-entrepreneurship-institute.html

Business + Impact at Michigan https://businessimpact.umich.edu

Social Enterprise Institute at Northeastern https://www.northeastern.edu/sei/

Center for Ethics and Religious Values in Business at Notre Dame https://cerv-mendoza.nd.edu

Skoll Centre for Social Entrepreneurship at Oxford https://www.sbs.ox.ac.uk/research/centres-and-initiatives/skoll-centre-social-entrepreneurship

Wharton Social Impact Iniviative at Penn https://socialimpact.wharton.upenn.edu/

and Center for Social Impact Strategy at Penn https://csis.upenn.edu

Faith and Work Initiative at Princeton https://faithandwork.princeton.edu/about-us

Center for Faithful Business at Seattle Pacific https://cfb.spu.edu

Center for Social Innovation at Stanford https://www.gsb.stanford.edu/faculty-research/centers-initiatives/csi

Social Innovation Initiative at Texas https://www.mccombs.utexas.edu/Centers/Social-Innovation-Initiative

Taylor Center for Social Innovation and Design Thinking at Tulane https://taylor.tulane.edu/about/

Social Innovation Cube at UNC https://campusy.unc.edu/cube/

Social Innovation at the Wond’ry at Vanderbilt https://www.vanderbilt.edu/thewondry/programs/social-innovation/

Program for Leadership and Character at Wake Foresthttps://leadershipandcharacter.wfu.edu/#

Program on Social Enterprise at Yale https://som.yale.edu/faculty-research/our-centers/program-social-enterprise/programs

 

 

July 6, 2021 in Business School, CSR, Entrepreneurship, Ethics, Haskell Murray, Law School, Religion, Social Enterprise, Teaching | Permalink | Comments (0)

Tuesday, April 27, 2021

ESG and the Discipline of Secrecy

The ESG movement (or EESG, if you want to follow Leo Strine on this) has been in the business and legal news quite a lot recently.

In a Bloomberg article about the tax perks of trillions of dollars in Environmental, Social, and Governance investing by Wall Street banks, tax specialist Bryen Alperin is quoted as saying: “ESG investing isn’t some kind of hippie-dippy movement. It’s good for business.”

This utilitarian approach to ESG, and social enterprise in general, has made me uncomfortable for a while. The whole “Doing Well by Doing Good” saying always struck me as problematic.

ESG and social enterprise are only needed when the decisions made are not likely to lead to the most financially profitable outcomes. Otherwise, it is just self-interested business.

Over my spring sabbatical, I have been reading a fair bit about spiritual disciplines and the one that is most relevant here is “Secrecy.” The discipline of secrecy is defined as “Consciously refraining from having our good deeds and qualities generally known, which, in turn, rightly disciplines our longing for recognition.” In The Spirit of the Disciplines, Dallas Willard (USC Philosophy) writes, “Secrecy at its best teaches love and humility…. and that love and humility encourages us to see our associates in the best possible light, even to the point of our hoping they will do better and appear better than us.”

As a professor with active social media accounts, the discipline of secrecy is not an easy one for me. But I do think it is a good aspiration for all of us. Not every good deed has to be kept in secret. There can be good reasons for broadcasting good deeds (for example, to encourage others.) However, regularly performing good deeds in secret can help us build selfless character.

Similarly, socially conscious businesses and investors should be focused on the broader good being done, not on the personal benefits. Granted, I don’t think investors can blindly trust the ESG funds or benefit corporations --- the screens are simply unreliable. Also, it may be difficult to determine which companies are really doing social good if they are practicing much of it in secret. But the truth has a tendency of leaking out over time and investors can focus on companies they see doing the right thing without excessive marketing.

As for the companies themselves, I remain optimistic that there are at least a few businesspeople who truly want to benefit society for mostly selfless reasons. Combatting selfishness is not easy, but the discipline of secrecy is one way to fight it.  

April 27, 2021 in Books, Corporations, CSR, Ethics, Haskell Murray, Philosophy, Religion, Social Enterprise | Permalink | Comments (1)

Sunday, December 6, 2020

A Purposive Approach to Corporate Governance Sustainability - Lécia Vicente Guest Post

The post below is the first in Lécia Vicente's December series that I heralded in my post on Friday.  Due to a Typepad login issue, I am posting for her today.  We hope to get the issue corrected for her post for next week. 

*     *     *

My series of blog posts cover the recent "Study on Directors' Duties and Sustainable Corporate Governance" ("Study on Directors' Duties") prepared by Ernst & Young for the European Commission. This study promises to set the tone of the EU's policymaking in the fields of corporate law and corporate governance. The study explains that the "evidence collected over 1992-2018 period shows there is a trend for publicly listed companies within the EU to focus on short-term benefits of shareholders rather than on the long-term interests of the company." The main objective of the study is to identify the causes of this short-termism in corporate governance and determine European Union (EU) level solutions that permit the achievement of the United Nations (UN) Sustainable Development Goals (SDGs) and the objectives of the Paris Agreement.

Both the United Nations 2030 Agenda and the Paris Agreement are trendsetters, for they have elevated the discussion on sustainable development and climate change mitigation to the global level. That discussion has been captured not only by governments and international environmental institutions but also by corporations. Several questions come to mind.

What is sustainability? This one is critical considering that the global level discussion is often monotone, with the blatant disregard of countries' idiosyncrasies, the different historical contexts, regulatory frameworks, and political will to implement reforms. The UN defined sustainability as the ability of humanity "to meet the needs of the present without compromising the ability of future generations to meet their own needs."

The other question that comes to mind is: what is development? Is GDP the right benchmark, or should we be focusing on other factors? There is disagreement among economists on the merit of using GDP as a development measure. Some economists like Abhijit Banerjee & Esther Duflo say, "it makes no sense to get too emotionally involved with individual GDP numbers." Those numbers do not give us the whole picture of a country's development.

The Study on Directors' Duties maintains as a general objective the development of more sustainable corporate governance and corporate directors' accountability for the company's sustainable value creation. This general objective would be specifically implemented either through soft law (non-legislative measures) or hard law (legislative measures) that redesign the role of directors (this includes the creation of a new board position, the Chief Value Officer) and directors' fiduciary duties. This takes me to a third question.

What is the purpose of the company? In other words, what is it that directors should be prioritizing? In a recent blog post, Steve Bainbridge says

I don't "disagree with the assertion that the law does not mandate that a corporation have as its purpose shareholder wealth maximization" but only because I don't think it's useful to ask the question of "what purpose does the law mandate the corporation pursue?

[…] Purpose is always associated with the intellect. In order to have a purpose or aim, it is necessary to come to a decision; and that is the function of the intellect. But just as the corporation has neither a soul to damn nor a body to kick, the corporation has no intellect.

Bainbridge prefers "to operationalize this discussion as a question of the fiduciary duties of corporate officers and directors rather than as a corporate purpose."

Continue reading

December 6, 2020 in Business Associations, Corporate Governance, Corporate Personality, Corporations, CSR, Joan Heminway, Law and Economics, Management, Social Enterprise | Permalink | Comments (0)

Tuesday, March 31, 2020

Strava as Social Media's Social Enterprise

Strava

The Social Enterprise Alliance (SEA) previously defined "social enterprise" as businesses that (1) Directly address social need; (2) Commercial activity [not donations] drives revenue; and (3) Common good is the primary purpose. SEA's definition has evolved to be more inclusive, now recognizing three different models based on -- (1) opportunity employment, (2) transformative products/services, or (3) donations. While the first definition could be criticized for being too narrow (Ben & Jerry's would not qualify because their product does not directly address a "social need"), SEA's new definition is likely too broad because it seems to cover all donating businesses. 

Personally, I am most fond of social enterprises that produce products/services that lead directly to human flourishing. 

For Lent, I gave up Facebook/Twitter/Instagram. While these products have their uses, on the whole they tend distract me from what is truly important. Perhaps social media has improved since the advent of Covid-19, and I admit to feeling somewhat out of the loop. But I also feel much more at peace, and may not return to those forms of social media after Easter, or, if I do, I hope it will be on a much more limited basis. 

In contrast, Strava is one form of social media that has been a constant positive in my life. Strava, for those who don't know, is a free app to log all kinds of physical exercise. I credit Strava (and my friends on Strava) with keeping me accountable to exercise 4+ times a week for the past 4+ years. The community on Strava is unlike any social media I have seen or heard of elsewhere. People are relentlessly encouraging, and the focus is on fitness not controversy. Also, as a Strava friend recently posted -- "love Strava because it’s the only social media platform with almost 100% factually accurate information and statistics. (Besides minor GPS errors and the occasional ‘wrong activity type’)." Strava has truly created a product that likely improves the lives of nearly all of its users.

Anyway, no sponsorship for me for this post, but I do hope to see more readers on Strava!

March 31, 2020 in Business Associations, Haskell Murray, Social Enterprise, Sports, Wellness | Permalink | Comments (0)

Wednesday, February 19, 2020

Three Job Postings

These job postings were forwarded to me by a reader of the blog. 

(1) Kickstarter - General Counsel - Brooklyn, NY

(2) Hills Stern & Morley LLP - Lateral Partners & Associates - Washington D.C. 

Hills Stern & Morley LLP, a successful boutique firm focused on global transactions and based in Washington, seeks lateral partners to expand and complement its current practice areas in (i) project finance and development, (ii) energy and infrastructure finance, (iii) private equity fund formation and investment, (iv) private acquisitions, and (v) general corporate and finance.  Must have strong academic credentials, a stable work history, and relevant deal experience; portable business and a track record of business development are strongly preferred.  The firm offers an attractive alternative to the Big Law business model, a collegial work environment, and an impressive client list (including multiple development finance institutions).  Interested in a better platform to expand your practice?  Please send your CV, deal list and contact info to Michael Abbey at mabbey@hillsstern.com.

HSM is also looking for seasoned associates to support our practice areas.  Why not enhance your skills working with experienced partners on exciting global transactions and enjoy life outside the office as well?  Please send your CV, deal list and contact info to Michael Abbey.

(3) Social Finance - Assistant General Counsel - Boston, MA

See extensive information about the position under the page break. 

Continue reading

February 19, 2020 in Haskell Murray, Jobs, Social Enterprise | Permalink | Comments (0)

Friday, August 23, 2019

UN Forum on Business and Human Rights- Nov. 25-27. Registration Open

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 mweldon@law.miami.edu. 

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)

Monday, July 29, 2019

Social Enterprise Lawyering: More Than Mere Legal Competence is Required . . . .

For last year's Business Law Prof Blog symposium at UT Law, I spoke on issues relating to the representation of business firms classified or classifiable as social enterprises.  Last September, I wrote a bit about my presentation here.  The resulting essay, Lawyering for Social Enterprise, was recently posted to SSRN.  The SSRN abstract follows.

Social enterprise and the related concepts of social entrepreneurship and impact investing are neither well defined nor well understood. As a result, entrepreneurs, investors, intermediaries, and agents, as well as their respective advisors, may be operating under different impressions or assumptions about what social enterprise is and have different ideas about how to best build and manage a sustainable social enterprise business. Moreover, the law governing social enterprises also is unclear and unpredictable in respects. This essay identifies two principal areas of uncertainty and demonstrates their capacity to generate lawyering challenges and related transaction costs around both entity formation and ongoing internal governance questions in social enterprises. Core to the professionalism issues are the professional responsibilities implicated in an attorney’s representation of social enterprise businesses.

To illuminate legal and professional responsibility issues relevant to representing social enterprises, this essay proceeds in four parts. First, using as its touchstone a publicly available categorization system, the essay defines and describes types of social enterprises, outlining three distinct business models. Then, in its following two parts, the essay focuses in on two different aspects of the legal representation of social enterprise businesses: choice of entity and management decision making. Finally, reflecting on these two aspects of representing social enterprises, the essay concludes with some general observations about lawyering in this specialized business context, emphasizing the importance of: a sensitivity to the various business models and related facts; knowledge of a complex and novel set of laws; well-practiced, contextual legal reasoning skills; and judgment borne of a deep understanding of the nature of social enterprise and of clients and their representatives working in that space.

I hope that this essay is relatable and valuable to both academics and practicing lawyers.  Feedback is welcomed.  So are comments.  

Also, I will no doubt be talking more about aspects of this topic at a SEALS discussion group later this week entitled "Benefit Corporation (or Not)? Establishing and Maintaining Social Impact Business Firms," which I proposed for inclusion in this year's conference and for which I will serve as a moderator.  The description of the discussion group is as follows:

As the benefit corporation form nears the end of its first decade of "life" as a legally recognized form of business association, it seems important to reflect on whether it has fulfilled its promise as a matter of legislative intent and public responsibility and service. This discussion group is designed to take on the challenge of engaging in that reflective process. The participating scholars include doctrinal and clinical faculty members who both favor and tend to recommend the benefit corporation form for social enterprises and those who disfavor or hesitate to recommend it.

As you can see from the SEALS program for the meeting, the participants represent both academics (doctrinal and clinical) and practitioners who care about social enterprise and entity formation.   If you are at SEALS, please come and join us!

July 29, 2019 in Business Associations, Compliance, Conferences, Corporate Governance, Corporations, Joan Heminway, Lawyering, Social Enterprise | Permalink | Comments (4)

Monday, June 17, 2019

Grunin Center Conference 2019

GruninBanner_2019_0

Earlier this month, I attended and presented at the 2019 Legal Issues in Social Entrepreneurship and Impact Investing–in the US and Beyond conference co-organized by the Impact Investing Legal Working Group and the Grunin Center for Law and Social Entrepreneurship at the NYU School of Law.  My friends Deb Burand and Helen Scott (also my Corporations and Securities Regulation professor when I was at NYU Law) co-direct the Grunin Center.  They organized a super conference this year.  Each year, the conference draws more folks--and with good reason.

I presented as part of a panel that compared and contrasted the use of different forms of entity for social enterprise businesses.  My role was (perhaps predictably, given that I wrote this piece) to defend the use of traditional for-profit corporations for this purpose.  I got some love from the panel and the audience, but so did others with different views . . . .

One of the nifty features of this conference is the use of lunchtime slots for "table talks" (roundtable discussions) and workshops.  I attended a table talk entitled "Gender Lens Investing: A Year in Review and A Look Ahead" and a workshop on "Re-Designing Legal Education for Lawyers, Social Entrepreneurs, and Impact Investors in the US and Beyond."  (The latter, which involved a design-thinking exercise to work on a course plan/syllabus, has spawned an ongoing informal working group that met again earlier today on Zoom.)  The conference attracts both lawyers and folks from industry.

For me, a wonderful part of this conference--and the scholar convening that followed on the day after the conference--was the inspiration of a new ideas for research and writing.  In my view, a good conference routinely does that, without fanfare. I hope to report out on the details of some of those ideas in the future.

During the week before the Grunin Center conference, I was at the Law and Society Association Annual Meeting.  I presented my ongoing insider trading research at that meeting.  I will again be presenting that work (with some updates) at the National Business Law Scholars Conference later this week.  I hope to see many of our readers there and share my insider trading research in later posts.

June 17, 2019 in Conferences, Entrepreneurship, Social Enterprise | Permalink | Comments (0)

Friday, May 24, 2019

Scooters and the Difficulty of Measuring Social Value

Bird

"Bird Scooter" by mikecogh is licensed under CC BY-SA 2.0 

Here in Nashville, Mayor David Briley announced that he is seeking to ban scooters. This announcement follows the first scooter-related death in the city.

Currently, I am working on a project that looks at how social value is measured and reported. As I dig deeper, I am becoming even more convinced that measuring social value may be too difficult for us to do well.

Let’s take scooters as an example. How would you measure (and report) the social value of these scooter companies? How many points should a “third-party standard” assign for the jobs created, for the gasoline saved, for the affordable transportation provided, for the fun produced? How many points should you subtract for a death, for injuries, for obstructing sidewalks? In the language of the Model Benefit Corporation Legislation, how do you know if a scooter company is producing “[a] material positive impact on society and the environment, taken as a whole”?

Over the past few weeks, I’ve been diving into the B Impact Assessment, (which is the top third-party standard used by benefit corporations) and, frankly, the points assigned seem somewhat arbitrary and easy for companies to manipulate. In my opinion, almost any company, including a scooter company, could get the 80+ points needed to qualify as a certified B corp. if they learned and worked the system a bit (and, as most readers know, you don’t even have to be certified to become a benefit corporation under the state statutes.)

I know bright people who would emphatically argue that scooter companies create a “material positive impact,” and I know bright people who think scooter companies are socially destructive. Social reporting does not have to be totally useless; it would be interesting to have the data on scooter usage (how many people are using them for their commute, what is the injury rate relative to cars, etc?). But the total amount of social value is not easily reduced to numbers and social reports. Given the nuance of each decision, the various externalities, and the difficulty in quantifying the social impact, I have previously suggested giving stakeholder representatives certain governance rights (such as the ability to elect and sue the board of directors). This way, directors will be more likely to consider each stakeholder group when making decisions.

May 24, 2019 in Business Associations, CSR, Haskell Murray, Legislation, Social Enterprise | Permalink | Comments (1)

Friday, March 8, 2019

Call for Papers: Finance for Sustainability (Daughters of Themis)

Received today from BLPB friends Beate Sjåfjell and María Jesús Muñoz Torres:

Happy International Women’s Day! We celebrate this day by issuing the call for papers for the 5th international workshop of Daughters of Themis: International Network of Female Business Scholars. The theme is Finance for Sustainability; a highly topical theme! The deadline is 26 March, and we hope that the brief window of opportunity will be large enough for all interested to respond.

We appreciate if you would circulate this call to any interested colleagues identifying as female business scholars, including junior scholars (PhD candidates) as well as colleagues in lower-income countries. Please note that we this year do have some, very limited, funds available so that we can contribute to the funding for one or two participants based on financial hardship.

For those unfamiliar with Daughters of Themis: our annual workshop is the heart of our network, and you can read more here, reporting back from our three last workshops here: 2018, 2017 and 2016.

Please feel free to contact Beate or María Jesús with any questions you might have.

Unfortunately, this workshop overlaps a bit with the Grunin Center's annual conference (which focuses in on "Legal Issues in Social Entrepreneurship and Impact Investing").  But if you are a business finance/law person who focuses on sustainability, you should be at one event or another!  

March 8, 2019 in Business Associations, Call for Papers, Conferences, Corporate Finance, Joan Heminway, Social Enterprise | Permalink | Comments (0)

Friday, December 14, 2018

Getting Back to B Corporations and Benefit Corporations . . . .

Haskell Murray, this one's for you (and many others who work with B corporations and benefit corporations)!

Friend of the BLPB Tamara Belinfanti recently sent me a link to an article in which she was quoted.  The premise of the article is clear from its title: To B or not to B? That’s the question for companies who seek to "balance profit and purpose."  Familiar proposition; great article title.  It's certainly worth a quick read, even if it says nothing new.  (Although it does seem to imply that Justice Strine is no longer the Chief Justice of the Delaware Supreme Court . . . .)

In the article, various folks (including Justice Strine) comment about whether B corporation certification and/or benefit corporations are "needed" for social enterprise firms.  This is a question that I love to think about (especially if it can keep me from grading papers for a bit . . . ).  Some of you may remember my post on this topic from a few years ago.  It also is an issue that I have approached at times in pieces of my academic writing, including in the article featured in this post.

Next summer, at the Southeastern Association of Law Schools annual meeting/conference, I am moderating a discussion group on the subject to continue and enrich the conversation.  The title and brief abstract are set forth below.

Discussion Group: Benefit Corporation (or Not)? Establishing and Maintaining Social Impact Business Firms

As the benefit corporation form nears the end of its first decade of "life" as a legally recognized form of business association, it seems important to reflect on whether it has fulfilled its promise as a matter of legislative intent and public responsibility and service. This discussion group is designed to take on the challenge of engaging in that reflective process. The participating scholars include doctrinal and clinical faculty members who both favor and tend to recommend the benefit corporation form for social enterprises and those who disfavor or hesitate to recommend it.

To date, the participants include domestic and international law professors (clinical and doctrinal) and a practitioner, too!  Let me know if you would like to join this group.  The conference runs from July 28 - August 3 and will be held this year at the Boca Resort and Beach Club.

I will be interested in the discussion.  In the mean time, as someone who does not recommend the benefit corporation form, I am opening the BLPB "floor" for discussion here.  I am interested in your views.

December 14, 2018 in Conferences, Corporate Governance, Haskell Murray, Joan Heminway, Social Enterprise | Permalink | Comments (0)

Friday, November 9, 2018

The Cambridge Handbook of Social Enterprise Law

The Cambridge Handbook of Social Enterprise Law, edited by Ben Means (South Carolina) and Joe Yockey (Iowa) is at the printers and should be ready for orders in early 2019. 

My fellow BLPB editor Joan Heminway and I both have chapters in the book, along with many others. 

The introduction is posted on SSRN, for those who are interested. Also, editor Ben Means has many talents, as he did the cover artwork below as well.

The Cambridge Handbook of Social Enterprise Law_Cover

November 9, 2018 in Business Associations, Corporate Governance, Haskell Murray, Joan Heminway, Research/Scholarhip, Social Enterprise | Permalink | Comments (0)

Tuesday, October 2, 2018

Symposium Announcement: The Urgency of Poverty

Following is an announcement for an upcoming symposium that will tackle some challenging topics, including those related to the role corporate law plays in addressing poverty.  I, of course, would probably talk about the role of "entity law," rather than "corporate law," but that's just me.  Regardless, this should be an interesting and enlightening discussion, and I look forward to seeing the papers that come from it.  

On Thursday, October 25, 2018, The University of Tennessee Law School and the Tennessee Journal of Race, Gender, & Social Justice will be hosting a Symposium titled The Urgency of Poverty. The Symposium reflects on the Poor People's Campaign of 1968 and the continued injustices which have led to the current revival. The Symposium further explores the important role transactional lawyers and scholars must play in advocating for economic justice in modern America.

The Symposium will include panels on (1) Environmental Justice, (2) Intersection of Civil Rights and Economic Justice, (3) Solidarity Economies, and (4) Reforming Corporate Law. Professor Philip Alston, the U.N. Special Rapporteur on Extreme Poverty, and Human Rights, will deliver the keynote. The Symposium is accompanied by a dedicated publication featuring essays and articles from Transactional Professors of Color.

More information is available here: https://law.utk.edu/alumni/get-involved/cle/the-urgency-of-poverty/

 

Image

October 2, 2018 in Corporations, Crowdfunding, Joshua P. Fershee, Research/Scholarhip, Social Enterprise | Permalink | Comments (0)