Corporate Governance Convergence: Lessons from the Indian Experience

Over the past two decades, corporate governance reforms have emerged as a central focus of corporate law in countries across the development spectrum. Various legal scholars studying these reform efforts have engaged in a vigorous debate about whether globalization will lead to convergence of corporate governance laws toward one model of governance: namely the Anglo-American, dispersed shareholder model, or whether existing national characteristics will thwart convergence. Despite rapid economic growth and reforms in developing countries such as India, the legal literature discussing this debate primarily focuses on developed economies. This Article examines recent corporate governance reforms in India as a case study for evaluating the competing claims on global convergence of corporate governance standards currently polarizing the field of corporate law. This Article seeks to make a fresh contribution to the convergence debate by examining the implications of India\u27s corporate governance reform efforts. It contends that the Indian experience demonstrates that traditional theories predicting convergence, or a lack thereof fail to fully capture the trajectory of actual corporate governance reforms. India\u27s reform efforts demonstrate that while corporate governance rules may converge on a formal level with Anglo- American corporate governance norms, local characteristics tend to prevent reforms from being more than merely formal. India\u27s inability to effectively implement and enforce its extensive new rules corroborates the argument that comprehensive convergence is limited, and that the transmission of ideas from one system to another is highly complex and difficult, requiring political, social and institutional changes that cannot be made easily

Women and M&A

Corporations, law firms, and investment banks all state that diversity matters. This Article shows that there is a chasm between discourse and action. For the most important decisions undertaken by companies—large merger and acquisition (M&A) transactions—a gender gap persists. This Article provides a holistic examination of the network of lead actors involved in M&A, revealing that women’s leadership opportunities continue to be vastly unequal. Using hand-collected data from 700 transactions, this Article reveals that thirty years after women began to account for almost half of all law students, gender parity in M&A leadership lags far behind. To illustrate, over a seven-year period, women make up on average 10.5% of lead legal advisors for buyers in large M&A deals. Moreover, this Article documents the lack of transparency on leadership data for other players in M&A. This Article argues that understanding, documenting, and disclosing the gender gap in M&A leadership is critical for increasing accountability and for determining the solutions that may work to reduce such disparities

Investment Bankers and Inclusive Corporate Leadership

Few major deals happen without the engagement and advice of investment bankers. Whether a company is undertaking an initial public offering or engaging in a large merger or acquisition deal, investment bankers play a central role in advising corporate executives. Successful investment bankers are devoted to cultivating relationships with executives. And these relationships place bankers in a position to earn tens of millions in fees for their advisory and service roles in connection with corporate dealmaking. Investment bankers’ constant endeavors to nurture relationships with executives, while also maximizing their own ability to enhance fees, commonly leads to allegations of double-dealing, self-dealing, and conflicts of interests. Beyond such conflicts, however, investment banking faces two additional issues as society grapples with rising expectations around diversity, equity, and inclusion (DEI). First, investment banking has a deeply rooted gender divide. Relying on hand-collected data, this Article reveals the dramatic gender gap at investment banks, including the most prominent boutique investment banks advising corporate executives. Second, the culture and accepted practices of investment banking reinforce masculine norms and bias against women in banking. This Article argues that not only do these issues hinder gender equity in investment banking as a profession, but they also influence the relationship between bankers and corporate executives. Bankers often serve as one of the most crucial advisors to corporate executives, and the norms and divides of investment banking calibrate corporate cultures and values in the C-suite, thus enabling the continued gender gap in corporate America

Directors as Trustees of the Nation? India’s Corporate Governance and Corporate Social Responsibility Reform Efforts

This Article argues that the Indian government’s corporate governance and CSR efforts, while laudable in some respects, are problematic in their approach to the governance of Indian companies and reflect a view of the ownership and governance of Indian companies that does not necessarily address the fundamental governance issues that arise in Indian firms. India’s proposed corporate law reforms suggest imposition of detailed corporate governance rules without necessarily assisting directors in addressing the fundamental majority–minority agency problems of controlled companies. Moreover, India’s proposed CSR guidelines may further hamper independent directors and exacerbate some of the problems that this Article discusses with respect to majority–minority agency costs

Transforming the Allocation of Deal Risk Through Reverse Termination Fees

Acquisition agreements are peppered with various provisions designed to mitigate, allocate, or address the ramifications of deal risk. The potential for deal risk is particularly pronounced in acquisition transactions involving public companies, which generally entail a significant interim period between the date of the signing of the acquisition agreement and the date of the completion of the transaction. Allocation of deal risk is a vital component of deals where millions, if not billions, of dollars are at stake for buyers and sellers, as well as their shareholders and stakeholders. Perhaps the most obvious deal risk is of one party abandoning the transaction. One of the primary ways of dealing with this risk is through termination fee provisions. Typically, acquisition agreements provide for a standard termination fee ( STF\u27) to be paid by the seller in the event that the seller does not complete the transaction due to specific triggers. These triggers commonly involve situations where a third-party bidder for the seller emerges. In an increasing number of transactions, acquisition agreements provide for a reverse termination fee ( RTF )-that is, a payment by the buyer in the event the buyer cannot or does not complete the acquisition as specified in the agreement

Redefining Corporate Purpose: An International Perspective

This comparative analysis of India’s move toward redefining corporate purpose proceeds as follow. Part I presents an overview of global debates over corporate purpose, drawing principally from the move toward the ESV model in the U.K. and benefit corporations in the U.S. This section briefly recounts the debates in both jurisdictions about whether the changes they have experienced will engender more socially responsible corporations. Part II then provides a condensed history of corporate law reforms in India and an overview of the legislative changes undertaken in the past decade. In Part II, this Article takes a broad approach toward analyzing the Act and argues that the various provisions of the Act demonstrate a move toward broader corporate purpose. In Part III, this Article argues that despite the goals of Indian law makers in passing the Companies Act, there are serious shortcomings in the law as it pushes toward a pluralistic stakeholder oriented purpose. Part III identifies several structural challenges that stand in the way of a move toward companies that truly are responsible to a wide variety of constituencies, including vagueness in the legislation, promoter-dominated ownership structures, ineffective institutional framework to support enforcement efforts by stakeholders generally, and weaknesses in the judiciary. These challenges suggest that India’s experiment with corporate purpose is one that is uncertain to succeed

Directors as Trustees of the Nation? India’s Corporate Governance and Corporate Social Responsibility Reform Efforts

This Article argues that the Indian government’s corporate governance and CSR efforts, while laudable in some respects, are problematic in their approach to the governance of Indian companies and reflect a view of the ownership and governance of Indian companies that does not necessarily address the fundamental governance issues that arise in Indian firms. India’s proposed corporate law reforms suggest imposition of detailed corporate governance rules without necessarily assisting directors in addressing the fundamental majority–minority agency problems of controlled companies. Moreover, India’s proposed CSR guidelines may further hamper independent directors and exacerbate some of the problems that this Article discusses with respect to majority–minority agency costs