Patrick Bolton, Mitu Gulati & Ugo Panizza on Sovereign Debt Crises

Patrick Bolton, professor of business at Columbia University; Mitu Gulati, professor of law at the University of Virginia; and Ugo Panizza, professor of international economics at the Graduate Institute Geneva, join the Business Scholarship Podcast to discuss their article Legal Air Cover. In the article, the authors consider the impact of the COVID-19 pandemic on emerging-market sovereign debt, the risk of concurrent sovereign-debt crises, and potential interventions for managing that scenario.

Elisabeth de Fontenay and Eric Talley on Mistaken Payments

Elisabeth de Fontenay, professor of law at Duke University and Eric Talley, professor of law at Columbia University, join the Business Scholarship Podcast to discuss Citibank’s mistaken payment of $900M to Revlon lenders, the resulting litigation, and the implications for the future of New York commercial and contract law. De Fontenay is the author of The $900 Million Mistake: In re Citibank August 11, 2020 Wire Transfers (S.D.N.Y. Feb. 16, 2021) and Talley is the organizer of a scholars’ amicus brief in the Second Circuit appeal of the case.

Steven Dean on Tax Havens

Steven Dean, professor of law at Brooklyn Law School, joins the Business Scholarship Podcast to discuss Ten Truths About Tax Havens: Inclusion and the ‘Liberia’ Problem and A Plea to President Biden to Stop Perpetuating Racist Tax Policy. In these pieces, Dean challenges prevailing culture stories around tax non-compliance and the Global South and instead identifies opportunities for the Global North to address tax compliance without casting aspersions on majority Black and Brown jurisdictions.

Lawrence Cunningham on Quality Shareholders

Lawrence Cunningham, research professor of law at George Washington University, joins the Business Scholarship Podcast to discuss his articles The Case for Empowering Quality Shareholders and Ask the Smart Money: Shareholder Votes by a “Majority of the Quality Shareholders”. In these articles, Cunningham examines the unique role that “quality shareholders”—concentrated, long-term investors—can play compared to indexed or transient investors. In considering these three cohorts, he concludes that majority-of-the-minority voting for conflicted corporate transactions is often inadequate to the purpose. As a private-ordering solution to this problem, Cunningham proposes that boards adopt majority-of-the-quality-shareholder voting, as well.

Anita Krug on Temporary Securities Regulation

Anita Krug, dean and professor of law at Chicago-Kent College of Law, joins the Business Scholarship Podcast to discuss her article Temporary Securities Regulation. Krug presents case studies of SEC temporary rulemaking in times of crisis, including those made in the aftermath of the 9-11 attacks and at the outset of the COVID-19 pandemic. Drawing on these case studies, she proposes that temporary rulemaking could encourage salutary regulatory experimentation. She cautions, however, that crisis rulemaking risks curtailing investor protections just when they are needed most.

Richard Gentry, Timothy Quigley & Steven Boivie on CEO Turnover

Richard Gentry, associate professor at the University of Mississippi; Timothy Quigley, associate professor at the University of Georgia; and Steven Boivie, professor at Texas A&M University, join the Business Scholarship Podcast to discuss their article A Database of CEO Turnover and Dismissal in S&P 1500 Firms, 2000–2018, which was co-authored with Joseph Harrison. The authors identify accuracy and efficiency gaps in existing CEO-succession datasets and research. To address these gaps, they produce an open-source, documented dataset of CEO turnover and dismissals at S&P 1500 firms and demonstrate their dataset’s potential use in future CEO-succession studies.

Samantha Prince on Worker Classification

Samantha Prince, associate professor of lawyering skills and entrepreneurship at Penn State Dickinson Law, joins the Business Scholarship Podcast to discuss her article The AB5 Experiment – Should States Adopt California’s Worker Classification Law?. Prince introduces the high stakes involved for workers, employers, and governments in classifying workers as employees or independent contractors. She presents a case study of California’s new classification law, AB5, and successive rounds of political pushback and revision it has prompted. This case study, Prince explains, exemplifies experimental federalism and offers learnings for policymakers in other states.

Roberta Karmel on Securities Regulation

Part I

Roberta Karmel, professor of law at Brooklyn Law School, joins the Business Scholarship Podcast to discuss her career as a securities scholar, teacher, practitioner, and regulator. This episode is the first in a two-part series and covers Karmel’s early career as an SEC enforcement attorney and supervisor, private practitioner, and SEC commissioner—the first woman to serve in that position—and her transition to legal academia. The next episode focuses on Karmel’s scholarship, views on securities policy, and perspectives on teaching.

Part II

Roberta Karmel, professor of law at Brooklyn Law School, joins the Business Scholarship Podcast to discuss her career as a securities scholar, teacher, practitioner, and regulator. This episode is the second in a two-part series and covers Karmel’s scholarship, views on securities policy, advice to scholars and new SEC chair Gary Gensler, and perspectives on teaching.

Roy Shapira on a New Caremark Era

Roy Shapira, associate professor at IDC Herzliya, joins the Business Scholarship Podcast to discuss his article A New Caremark Era: Causes and Consequences. Shapira observes that Delaware’s Caremark doctrine, which has long imposed compliance duties on boards without much opportunity for shareholders to bring related claims, has entered a new era in a recent quartet of cases. He predicts that this turn of Caremark claims surviving motions to dismiss is the result of parallel developments around shareholders’ Section 220 inspection rights. Shapira closes by highlighting the potential for a “new” Caremark to complement other compliance-enforcement mechanisms.

Cathy Hwang & Yaron Nili on Cleaning Corporate Governance

Cathy Hwang, professor of law at the University of Virginia, and Yaron Nili, assistant professor of law at the University of Wisconsin, join the Business Scholarship Podcast to discuss their article Cleaning Corporate Governance, which is co-authored with Jens Frankenreiter and Eric Talley. In this article the authors recreate a dataset of public-company charters on which numerous empirical studies have been based, finding a roughly 80% error rate in the prior data. The authors demonstrate the uses of their new dataset with a replication study of Corporate Governance and Equity Prices, a foundational work in empirical corporate governance.

The dataset and its underlying documents are freely available at publiccompanycharters.com.

Carliss Chatman on Corporate Family Matters

Carliss Chatman, associate professor of law at Washington & Lee University, joins the Business Scholarship Podcast to discuss her article Corporate Family Matters. In this article Chatman observes that contemporary large businesses operate through entity networks. She explains that siloed entities within such “corporate families” could facilitate organizational misconduct. To address this problem, she proposes a state-law definition of corporate families applicable to materiality judgments, reporting obligations, and conflicts of interest.

Sadie Blanchard on Contracts Without Courts or Clans

Sadie Blanchard, associate professor of law at the University of Notre Dame, joins the Business Scholarship Podcast to discuss her article Contracts Without Courts or Clans: How Business Networks Govern Exchange. In this article Blanchard explains that under some conditions contracts can be formed and successfully carried out without enforcement by public courts or tight-knit social groups. She presents a case study of the reinsurance trade circa 1980 to demonstrate this point, which shows that the reinsurance industry long thrived on an international basis that did not require judicial or localized reputational enforcement.

Grant Hayden and Matthew Bodie on Codetermination

Grant Hayden, professor of law at Southern Methodist University, and Matthew Bodie, professor of law at Saint Louis University, join the Business Scholarship Podcast to discuss their article Codetermination in Theory and Practice. In this article, Hayden and Bodie reexamine the literature on codetermination—the inclusion of workers in high-level corporate policymaking—and explain why it deserves a fresh look in an era of challenges to the shareholder-primacy model of corporate governance.

Dorothy Lund and Elizabeth Pollman on the Corporate-Governance Machine

Dorothy Lund, assistant professor of law the University of Southern California, and Elizabeth Pollman, professor of law at the University of Pennsylvania, join the Business Scholarship Podcast to discuss their article The Corporate Governance Machine. In this article, Lund and Pollman identify the origins of the term “corporate governance” and explain corporate governance’s emergence as a shareholder-focused system supported by law, markets, and culture. This system, the authors find, has served to arrest the development of and innovations in corporate governance and law.

Elizabeth Tippett on Enslaved Agents

Elizabeth Tippett, associate professor of law at the University of Oregon, joins the Business Scholarship Podcast to discuss her article Enslaved Agents: Business Transactions Negotiated by Slaves in the Antebellum South. In this article, Tippett analyzes 18th- and 19th-century judicial decisions that spotlight the historical practice of enslaved workers serving as business agents to slaveholders. This analysis, she explains, sheds new light on the legal-economic history of slavery and the law of agency.

Edmund Schuster on Blockchain Hype

Edmund Schuster, associate professor of corporate law at the London School of Economics, joins the Business Scholarship Podcast to discuss his article Cloud Crypto Land. In this article, Schuster explains why enthusiasm around blockchain and smart-contract technologies must confront rule-of-law concerns that would make their application to new legal and economic use-cases doubtful. Instead, he argues, these technologies should not be expected to meaningfully expand outside the realm of cryptocurrency.

Michael Klausner on SPACs

Michael Klausner, professor of business and law at Stanford University, joins the Business Scholarship Podcast to discuss his article A Sober Look at SPACs, which was written with co-authors Michael Ohlrogge and Emily Ruan. In this paper, Klausner and his co-authors conduct an empirical examination of special-purpose acquisition companies (SPACs), finding that in their sample period SPAC structures created $3.60 in dilution per $10 raised in SPACs’ initial public offerings. The authors explain how this result is partly driven by current U.S. securities regulation and recommend reforms to address differential regulatory treatment of SPACs and traditional IPOs.

Sarah Haan on the Feminization of Capital

Sarah Haan, professor of law at Washington & Lee University, joins the Business Scholarship Podcast to discuss her article Corporate Governance and the Feminization of Capital. In this legal history, Haan shows that in the first half of the twentieth century, women were a significant share of stockholders in the public markets and were a majority in some firms. She then connects this feminization of capital to early corporate theory and examines how gendered stereotypes of women shareholders influenced the rise of institutional investing.

Charlotte Haendler and Rawley Heimer on Financial-Services Complaints

Charlotte Haendler, a PhD student in finance at Boston College, and Rawley Heimer, an assistant professor of finance at Boston College, join the Business Scholarship Podcast to discuss their article The Financial Restitution Gap in Consumer Finance: Insights from Complaints Filed with the CFPB. In this paper, Haendler and Heimer use data from customer complaints submitted to the Consumer Financial Protection Bureau to examine how financial-services providers treat customers of different socioeconomic statuses. After finding racial and income gaps in the likelihood that complaints result in restitution, the authors examine potential mechanisms, including financial industry reaction to changing presidential administrations.

Charles McClure on Disclosure and Managerial Learning

Charles McClure, assistant professor of accounting at the University of Chicago, joins the Business Scholarship Podcast to discuss his paper Disclosure Processing Costs and Market Feedback Around the World, which was written with co-authors Shawn Shi and Edward Watts. In this paper, McClure and his co-authors exploit international introductions of centralized electronic disclosure systems, like the SEC’s EDGAR database, to examine how disclosure technologies affect managers’ learning from securities prices and investors’ information processing.

Amanda Dixon, Madison Sherrill & Hadar Tanne on Willful Breach in M&A

Amanda Dixon, Madison Sherrill, and Hadar Tanne, students at Duke University School of Law, join the Business Scholarship Podcast to discuss their article Damages as a Function of Fault: Willful Breach in M&A Contracts, which was written with co-authors Theresa Arnold and Mitu Gulati. In this article, Dixon, Sherrill, and Tanne investigate why sophisticated parties incorporate the concept of willful non-performance into contracts despite the black-letter doctrine that contract law follows strict liability for breaches.

This article is the third by the Duke contracts group. Their prior papers are The Myth of Optimal Expectation Damages and ‘Lipstick on a Pig’: Specific Performance Clauses in Action.

Gregory Burke on SEC Staff and Shareholder Proposals

Gregory Burke, a PhD student in accounting at Duke University, joins the Business Scholarship Podcast to discuss his paper SEC Rule 14a-8 Shareholder Proposals: No-Action Requests, Determinants, and the Role of SEC Staff. In this paper, Burke examines shareholder proposals submitted by firms to the SEC’s Division of Corporation Finance for no-action relief. He tests whether four determinants (legal characteristics, pressure, proposal attributes, and individual staff) are associated with higher probabilities of no-action relief being granted and finds that there are statistically significant associations for each.