Creating a Stakeholder Democracy under Existing Corporate Law

Much of the current debate in corporate governance is framed in terms of stakeholder versus shareholder forms of corporate governance. While one would find little debate that stakeholders’ interests are important to any business, there is substantial debate regarding whether any stakeholder besides shareholders should have a formal role in corporate governance. What has been largely ignored in this debate is the issue of private ordering: since corporate law is largely enabling rather than mandatory, can stakeholder governance structures be voluntarily created within the current shareholder-centric default corporate law structure? This article argues that this is clearly the case, sets forth specific methods for how this can be accomplished, and discusses the implications this has for stakeholder democracy and other stakeholder-centric corporate law reforms which have been put forth

Creating a Stakeholder Democracy under Existing Corporate Law

Much of the current debate in corporate governance is framed in terms of stakeholder versus shareholder forms of corporate governance. While one would find little debate that stakeholders’ interests are important to any business, there is substantial debate regarding whether any stakeholder besides shareholders should have a formal role in corporate governance. What has been largely ignored in this debate is the issue of private ordering: since corporate law is largely enabling rather than mandatory, can stakeholder governance structures be voluntarily created within the current shareholder-centric default corporate law structure? This article argues that this is clearly the case, sets forth specific methods for how this can be accomplished, and discusses the implications this has for stakeholder democracy and other stakeholder-centric corporate law reforms which have been put forth

SEC IN-HOUSE TRIBUNALS: A CALL FOR REFORM

I IN the aftermath of the 1929 crash of the stock market and during the height of the Great Depression, the federal government took steps to strengthen U.S. securities laws.1 To that end, via the Securities Exchange Act of 1934, the U.S. Congress (Congress) created the U.S. Securities and Exchange Commission (SEC), whose “mission [is] to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”2 As “the primary overseer and regulator of the U.S. securities markets,” the SEC has the power to bring enforcement actions against parties it believes to be in violation of the nation’s securities laws

Evaluating Market Reactions to Non-Practicing Entity Litigation

An ongoing debate in patent law involves the role “non-practicing entities,” sometimes called “patent trolls,” serve in the patent system. Some argue they serve as valuable market intermediaries, while others contend they are a drain on innovation and an impediment to a well-functioning patent system. This Article adds to the data available in this debate by conducting an event study that analyzes the market reaction to patent litigation filed by large “mass aggregator” non-practicing entities against large publicly traded companies. This study advances the literature by attempting to reproduce the results of previous event studies done in this area with newer market data and by subjecting the event study results to more rigorous statistical analysis. In contrast to a previous event study, the Authors found that the market reacted little, if at all, to the patent litigation filed by large non-practicing entities

Does the Process of Constitution-Making Matter?

Constitution-making is a ubiquitous but poorly understood phenomenon. There is much speculation but relatively little evidence about the impact of different design processes on constitutional outcomes. Much of the debate reduces to the question of who is involved in the process and when. We consider two central issues in this regard. The first is the problem of institutional self-dealing, or whether governmental organs that have something to gain from the constitutional outcome should be involved in the process. The second has to do with the merits of public involvement in the process. Both of these concerns have clear normative implications and both are amenable to straightforward social scientific analysis. This article surveys the relevant research on constitution-making, describes the conceptual issues involved in understanding constitution-making, reviews the various claims regarding variation in constitution-making processes, and presents a set of baseline empirical results from a new set of data on the content and process of constitution-making.Governmen

Arbitration Agreements, Expanded Judicial Review, and Preemption – Hall Street Associates and NAFTA Traders, Inc. – A National Debate with International Implications

On May 13, 2011, the Texas Supreme Court, in construing the Texas Arbitration Act, rejected the U. S. Supreme Court’s analysis in Hall Street Associates, L.L.C. v. Mattel, Inc. 1 At issue was whether the parties may by agreement expand judicial review of an arbitration award beyond the specific grounds for vacatur or modification set forth in the Federal Arbitration Act. In NAFTA Traders, Inc. v. Quinn2 the Texas Supreme Court held that the Texas Arbitration Act does not preclude the parties from supplementing judicial review by contract. A discussion on the reasoning of the Texas Court and others that have addressed this issue, together with implications, is vital to moving forward with contractual arbitration domestically and internationally