Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, April 12, 2021

Georgiev on Human Capital Management

George S. Georgiev has posted The Human Capital Management Movement in U.S. Corporate Law on SSRN with the following abstract:

Corporations cannot exist without workers, yet workers are not part of the formal or informal governance structures established by U.S. corporate law. Commentators and policymakers have bemoaned this state of affairs for decades, to little avail. Since the mid-2010s, however, a concept related to workers, human capital management (HCM), has become an increasingly prominent part of U.S. corporate governance. HCM is premised on the notion that workers can be viewed as “assets” and ought to be managed just as carefully as firms manage physical and capital assets. In practice, HCM is an expansive concept that has been used to refer to workforce training, compensation and retention issues, gender pay equity, diversity and inclusion, health and safety, matters related to corporate culture, employees’ ability to participate in stock purchase programs, and various other matters.

The speed with which HCM has emerged and the depth and breadth of its reach have been surprising. While broadly fitting within the rubric of environmental, social, and governance (ESG) factors, HCM has quickly surpassed more traditional ESG topics in terms of prominence and uptake. Boards of directors have started to focus on HCM as part of their monitoring and oversight responsibilities, including by amending committee charters to cover HCM matters, identifying HCM as a desirable qualification for director nominees, and incorporating HCM metrics into executive compensation plans. Investors are now actively engaging with management and boards on questions pertaining to HCM. In August 2020, the Securities and Exchange Commission (SEC) adopted a new rule requiring HCM disclosure by public companies. Pending legislation could create HCM disclosure mandates that are considerably more extensive, while a variety of private standard-setting organizations (including SASB, GRI, and ISO) have already developed detailed HCM reporting standards, which firms have started to adopt. Taken together, these developments represent a powerful and heretofore unprecedented push to incorporate worker-related concerns in corporate governance—a phenomenon I describe as an “HCM movement.” By analyzing the origins, development, impact, and normative desirability of the novel HCM movement, this Article seeks to contribute to conversations about the need to update existing legal and institutional arrangements in light of the disruptions unleashed by the Covid-19 pandemic and the lingering economic dislocation caused by the 2008 financial crisis.

Subject to certain qualifications, the Article views HCM as a broadly positive and much-overdue corporate governance development: HCM disclosure contributes to more accurate firm valuation by shining a spotlight on a key driver of success in the modern knowledge-based economy; HCM oversight at the board level ensures that firms focus appropriately on the management of what has come to be referred to as a “mission-critical asset.” To realize HCM’s full promise, however, participants in the HCM movement should seek to disambiguate the HCM concept by breaking it down into its appropriate constitutive elements, and, to the extent possible, focusing the relevant discussions on those specific elements. In addition, boards should resist isomorphic approaches, particularly ones developed by organizations such as large asset managers that are lacking in regulatory legitimacy, accountability, and HCM expertise. The SEC can and should serve as a nexus for coordination among the various participants in the HCM movement. As an initial step, the SEC should revisit the HCM disclosure rulemaking process and reject the unstructured, “principles-based” approach reflected in the 2020 HCM disclosure rule, which is based on an impoverished understanding of the important concept of materiality. In its final part, the Article considers HCM’s limits as a solution to problems beyond the core concerns of corporate law and suggests that the rapid rise of the corporate governance HCM movement has in fact highlighted the need for a governmental human capital agenda aimed at the active development and protection of human capital, not just its management.

April 12, 2021 | Permalink | Comments (0)

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Timothy Nielsen, Note, Cryptocorporations: A Proposal for Legitimizing Decentralized Autonomous Organizations, 2019 Utah L. Rev. 1105.

Andrew A. Schwartz, Mandatory Disclosure in Primary Markets, 2019 Utah L. Rev. 1069.

Diana Qiao, Student Article, This Is Not a Game: Blockchain Regulation and Its Application to Video Games, 40 N. Ill. U. L. Rev. 176 (2020).

April 12, 2021 | Permalink | Comments (0)

Sunday, April 11, 2021

AALS Section on Business Associations: Calls-for-Papers

The AALS Section on Business Associations has two calls for papers for the 2022 AALS Annual Meeting:

Call for Papers for the

Section on Business Associations Program on

Race and Teaching Business Associations

January 5-9, 2022 AALS Annual Meeting

The AALS Section on Business Associations is pleased to announce a Call for Papers for its program at the 2022 AALS Annual Meeting, which will be held virtually. The topic is Race and Teaching Business Associations. Up to two presenters will be selected for the section’s program.

Business Associations classes taught in most law schools spend little if any time on issues relating to racial discrimination and inequity. But as important social institutions, businesses have long had a significant impact on racial equity. The increasing scrutiny of the lack of diversity on public company boards is one of several fronts where businesses are facing both legal and social pressure to address racial inequity. Students are increasingly interested in understanding how the law governing business organizations reflects or contributes to racial injustice. Many law professors want to do more to cover topics relating to race in their Business Associations course and are seeking guidance on how to do so. This panel will provide a forum where teachers of Business Associations can share ideas for incorporating the subject of racial discrimination and inequity into their classes. 

Submission Information:

Please submit an abstract or a draft of an unpublished paper to Jim Park, james.park@law.ucla.edu, on or before Friday, August 20, 2021.  Authors should include their name and contact information in their submission email but remove all identifying information from their submission.  Papers will be selected after review by members of the Executive Committee of the Section. Presenters will be responsible for paying their registration fee, if applicable. 

We recognize that the past year has been incredibly challenging and that these challenges have not fallen equally across the academy.  We encourage scholars to err on the side of submission, including by submitting early stage or incomplete drafts.  Scholars whose papers are selected will have until December to finalize their papers.   

Please direct any questions to Jim Park, UCLA School of Law, at james.park@law.ucla.edu.  

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Call for Papers

AALS Section on Business Association

New Voices in Business Law

January 5-9, 2022, AALS Annual Meeting

The AALS Section on Business Associations is pleased to announce a “New Voices in Business Law” program during the 2022 AALS Annual Meeting, which will be held virtually. This works-in-progress program will bring together junior and senior scholars in the field of business law for the purpose of providing junior scholars with feedback and guidance on their draft articles. To complement its other session at the Meeting, this Section is especially interested in papers relating to race and business law, but it welcomes submissions on all business-related topics.

FORMAT:  Scholars whose papers are selected will provide a brief overview of their paper, and participants will then break into simultaneous roundtables dedicated to the individual papers.  Two senior scholars will provide commentary and lead the discussion about each paper.

SUBMISSION PROCEDURE:  Junior scholars who are interested in participating in the program should send a draft or summary of at least five pages to Professor Eric Chaffee at Eric.Chaffee@utoledo.edu on or before Friday, August 20, 2021.  The cover email should state the junior scholar’s institution, tenure status, number of years in his or her current position, whether the paper has been accepted for publication, and, if not, when the scholar anticipates submitting the article to law reviews.  The subject line of the email should read: “Submission—Business Associations WIP Program.”

Junior scholars whose papers are selected for the program will need to submit a draft to the senior scholar commentators by Friday, December 10, 2021.

ELIGIBILITY:  Junior scholars at AALS member law schools are eligible to submit papers.  “Junior scholars” includes untenured faculty who have been teaching full-time at a law school for ten or fewer years.  The Committee will give priority to papers that have not yet been accepted for publication or submitted to law reviews. 

Pursuant to AALS rules, faculty at fee-paid non-member law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit.  Please note that all presenters at the program are responsible for paying their own annual meeting registration fees and travel expenses.  

April 11, 2021 | Permalink | Comments (0)

Thursday, April 8, 2021

New Securities Law Articles in Print

The following law review articles relating to securities regulation are now available in paper format:

Elizabeth F. Brown, The Continuum of Financial Products, 25 Stan. J.L. Bus. & Fin. 183 (2020).

Darian M. Ibrahim, Underwriting Crowdfunding, 25 Stan. J.L. Bus. & Fin. 289 (2020).

Jerry W. Markham, Securities & Exchange Commission vs. Elon Musk & the First Amendment, 70 Case W. Res. L. Rev. 339 (2019).

Gregory H. Shill, Congressional Securities Trading, 96 Ind. L.J. 313 (2020).

W. Mark C. Weidemaier, Law, Lawyers, and Self-Governance during the Heyday of the London Stock Exchange, 82 Law & Contemp. Probs. 195 (2019).

Verity Winship, Private Company Fraud, 54 UC Davis L. Rev. 663 (2020).

April 8, 2021 | Permalink | Comments (0)