dunnettreader + fiduciaries   15

Leo E. Strine - The Dangers of Denial: The Need for a Clear-Eyed Understanding of the Power and Accountability Structure Established by the Delaware Law :: SSRN Wake Forest Law Review, 2015, Forthcoming (March 20, 2015)
Supreme Court of Delaware; Harvard Law School; Penn Law School -- There is now a tendency among those who believe that corporations should be more socially responsible to pretend that corporate directors do not have an obligation under Delaware corporate law to make stockholder welfare the sole end of corporate governance within the limits of their legal discretion. These advocates of CSR contend that Delaware directors may subordinate stockholder welfare to other interests, such as those of the company’s workers or society generally. (..) But, the problem with that argument is that it is inconsistent with both judge-made common law of corporations in Delaware and the design of the Delaware General Corporation Law. More important, pretending that the nation’s leading corporate law is fundamentally different than it is runs contrary to the goal of ensuring that for-profit corporations behave lawfully, responsibly, and ethically. Lecturing others to do the right thing without acknowledging the rules that apply to their behavior and the power dynamics to which they are subject is not a responsible path to social progress. Rather, it provides an excuse to avoid tougher policy challenges, such as advocating for stronger externality regulation and encouraging institutional investors to exercise their power as stockholders responsibly. Those challenges must be confronted if we are to ensure that for-profit corporations are vehicles for responsible, sustainable, long-term wealth creation. -- PDF File: 43 -- downloaded pdf to Note
US_legal_system  US_politics  corporate_law  corporate_citizenship  corporate_governance  shareholder_value  profit_maximization  principal-agent  fiduciaries  law-and-economics  CSR  capital_as_power  duties-legal  duties-civic  duty_of_care  duty_of_loyalty  Delaware_law  downloaded 
july 2015 by dunnettreader
Bernard S. Black - The Core Fiduciary Duties of Outside Directors :: SSRN -:Asia Business Law Review, pp. 3-16, July 2001
This article offers my personal, idiosyncratic overview of the principal fiduciary duties of outside directors, from a common law perspective, and what the remedies should be for breach of each of these duties. I discuss the four core fiduciary duties of directors: the duty of loyalty; the duty of care; the duty of disclosure; and the duty of special care when your company is a takeover target. -- Number of Pages in PDF File: 36 -- saved to briefcase
article  SSRN  corporate_law  corporate_governance  fiduciaries  duties-legal  duty_of_loyalty  duty_of_care  disclosure  conflict_of_interest  corporate_control_markets 
july 2015 by dunnettreader
La Porta et al -- Investor Protection and Corporate Governance by :: SSRN 2000
Rafael La Porta, Florencio Lopez de Silanes, Andrei Shleifer, Robert W. Vishny -- Recent research on corporate governance has documented large differences between countries in ownership concentration in publicly traded firms, in the breadth and depth of financial markets, and in the access of firms to external finance. We suggest that there is a common element to the explanations of these differences, namely how well investors, both shareholders and creditors, are protected by law from expropriation by the managers and controlling shareholders of firms. We describe the differences in laws and the effectiveness of their enforcement across countries, summarize the consequences of these differences, and suggest potential strategies of reform of corporate governance. We argue that the legal approach is a more fruitful way to understand corporate governance and its reform than the conventional distinction between bank-centered and market-centered financial systems. -- PDF File: 40 -- saved to briefcase
paper  SSRN  corporate_law  corporate_governance  fiduciaries  investor_protection  corporate_ownership  shareholders  capital_markets  banking-universal 
july 2015 by dunnettreader
Lyman Johnson, David Millon - Recalling Why Corporate Officers are Fiduciaries :: SSRN - William & Mary Law Review, Vol. 46, 2005
Lyman Johnson, Washington and Lee U Law School; U of St. Thomas, St. Paul/Minneapolis, MN - School of Law -- David Millon,Washington and Lee U Law School -- For all the recent federal attention to ...corporate officer and director functions, ... state fiduciary duty law makes no distinction between the fiduciary duties of these two groups. (..) The thesis of this article is that corporate officers are fiduciaries because they are agents. (..) drawing on the fiduciary duties of agents for guidance in fashioning modern understandings of corporate officer duties - and differentiating those duties from those of directors - can provide much-needed structure to what otherwise threatens to be an ad hoc enterprise. There are at least 3 benefits of our thesis. (1) state law remains the primary source for establishing the basic framework of corporate governance relations, both through corporate statutes and through judge-made fiduciary duty law. (..) (2) our thesis clarifies immensely why courts can and should more closely scrutinize officer conduct than they now review director performance (..). (3) At a theoretical level, ...our thesis has several implications. (..) we are entering an era when, due to heavier corporate regulation, the entity conception of the firm will be strengthened, as positive law, including agency law, still builds on that understanding of corporate relations. This period follows a span of perhaps 20 years when a highly disaggregated conception of corporate relations - the nexus of contracts theory - has predominated. We also believe that in the policy arguments for and against strong fiduciary duties over the years, virtually no attention has been given to distinguishing whether what is fitting for outside directors in the fiduciary duty area - relatively slack duties - is also fitting for corporate officers. -- saved to briefcase
article  SSRN  corporate_law  financial_regulation  capital_markets  fiduciaries  principal-agent  agents  duties-legal  officers-&-directors  corporate_governance  shareholders  investors  state_law  federalism  federal_preemption  SEC  SROs  corporate_personhood  directors  duty_of_care  duty_of_loyalty  conflict_of_interest  legal_remedies  law-and-economics  law-and-finance 
july 2015 by dunnettreader
Edward B. Rock - Institutional Investors in Corporate Governance (Jan 2015) :: SSRN - Oxford Handbook on Corporate Law and Governance, 2015, Forthcoming
Penn Law School -- chapter examines the role of institutional investors in corporate governance and the role of regulation in encouraging institutional investors to become active stewards. (..) what lessons we can draw from the US experience for the EU’s 2014 proposed amendments to the Shareholder Rights Directive.(...) survey how institutional investors themselves are governed and how they organize share voting. (...) 2 central questions: (a) why, over the last 25 years, have institutional investors not fulfilled the optimists’ hopes?; and (b) can the core incentive problems that subvert Institutional Investor activism be cured by regulation? The US experience [substantial deregulation led to only modest increases in shareholder activism], suggests (..) institutional investors’ relative passivity is a fundamental lack of incentives. I examine the disappointing results of the SEC’s long experiment with incentivizing mutual funds to vote their shares (...) the EU efforts are likely to be similarly disappointing. I then examine the important role that hedge funds now play in catalyzing institutional shareholders, and consider some of the risks in relying on such highly incentivized actors. -- PDF File: 26 -- saved to briefcase
chapter  books  SSRN  law-and-economics  behavioral_economics  financial_economics  financial_regulation  corporate_governance  corporate_law  corporate_finance  capital_markets  corporate_control_markets  institutional_investors  shareholders  shareholder_voting  mutual_funds  incentives  activist_investors  investors  hedge_funds  proxies  comparative_law  administrative_law  EU-law  regulation-harmonization  regulation-enforcement  fiduciaries  profit_maximization  EU-regulation 
july 2015 by dunnettreader
David Millon - Radical Shareholder Primacy :: SSRN - Aug 2014
Washington and Lee University - School of Law -- University of St. Thomas Law Journal, Vol. 10:4 (2013) -- Washington & Lee Legal Studies Paper No. 2014-17 -- written for a symposium on the history of CSR, seeks to make sense of the surprising disagreement on the foundational legal question of corporate purpose: does the law require shareholder primacy or not? (..) disagreement is due to the unappreciated ambiguity in the shareholder primacy idea. (.. ) 2 models, the 'radical' and the 'traditional.' Radical shareholder primacy originated at Chicago in the later 1970s, (Daniel Fischel and Frank Easterbrook). [It asserts] that corporate management is the agent of the shareholders, charged with maximizing their wealth. There is no legal authority for this claim; Fischel drew it from the financial economists Michael Jensen and William Meckling, who used the agency idea in a non-legal sense. [The traditional model is] the idea that shareholders hold a privileged position within the corporation's governance structure, ... and (..) fiduciary duties as being owed to 'the corporation and its shareholders.' (..) shareholders enjoy primacy over (..) other stakeholders, although there is no maximization mandate and shareholders [have limited effective legal means] to insist that management privilege their interests. Nevertheless, this version of shareholder primacy is enshrined in the law, and, if the radical version's agency claim is laid to rest, there is no harm in acknowledging that fact. -- PDF File: 34 -- saved to briefcase
paper  SSRN  corporate_law  corporate_citizenship  corporate_governance  shareholder_value  profit_maximization  principal-agent  fiduciaries  law-and-economics  CSR  capital_as_power  status_quo_bias 
july 2015 by dunnettreader
Andrew S. Gold, Paul B. Miller, eds. -- Introduction: Philosophical Foundations of Fiduciary Law (Oxford UP 2014) :: SSRN
Andrew S. Gold, DePaul University, College of Law and Paul B. Miller, McGill University Faculty of Law -- This Introduction outlines core questions of fiduciary law theory and provides thematic discussion of the contributions to the volume. The volume includes chapters by Richard Brooks, Hanoch Dagan, Evan Criddle, Deborah DeMott, Avihay Dorfman, Justice James Edelman, Evan Fox-Decent, Tamar Frankel, Joshua Getzler, Andrew Gold, Michele Graziadei, Sharon Hannes, Genevieve Helleringer, Ethan Leib, Daniel Markovits, Paul Miller, Irit Samet, Robert Sitkoff, Henry Smith, and Lionel Smith. -- PDF File: 17 -- Keywords: Philosophy of Law, Legal Theory, Philosophy of Private Law, Private Law Theory, Fiduciary Law, Fiduciary Relationships, Fiduciary Duties, Fiduciary Remedies, Duty of Loyalty, Duty of Care, Duty of Candour -- downloaded pdf to Note
chapter  books  SSRN  philosophy_of_law  jurisprudence  legal_theory  legal_reasoning  fiduciaries  principal-agent  agents  duties-legal  rights-legal  trust  trusts  duty_of_care  duty_of_loyalty  conflict_of_interest  legal_remedies  law-and-economics  law-and-finance  Roman_law  civil_law  common_law  property  inheritance  family_law  downloaded 
july 2015 by dunnettreader
Robert H. Sitkoff - An Economic Theory of Fiduciary Law :: SSRN - Philosophical Foundations of Fiduciary Law, Andrew Gold & Paul Miller eds. (Oxford UP, 2014
Harvard Law -- In consequence of this common economic structure [agency problem], there is a common doctrinal structure that cuts across the application of fiduciary principles in different contexts. However, (..) the particulars of fiduciary obligation vary in accordance with the particulars of the agency problem in the fiduciary relationship at issue. This explains (1) the purported elusiveness of fiduciary doctrine and (2) why courts apply fiduciary law both categorically, such as to trustees and (legal) agents, as well as ad hoc to relationships involving a position of trust and confidence that gives rise to an agency problem. (...) a functional distinction between primary and subsidiary fiduciary rules. In all fiduciary relationships we find general duties of loyalty and care, typically phrased as standards, (..) we also find specific subsidiary fiduciary duties, often phrased as rules, that elaborate on the application of loyalty and care to commonly recurring circumstances in the particular form of fiduciary relationship. (..) the puzzle of why fiduciary law includes mandatory rules that cannot be waived in a relationship deemed fiduciary. Committed economic contractarians, such as Easterbrook and Fischel, have had difficulty in explaining why the parties to a fiduciary relationship do not have complete freedom of contract. The answer is that the mandatory core of fiduciary law serves a cautionary and protective function within the fiduciary relationship as well as an external categorization function that clarifies rights for third parties. -- PDF File: 14 -- Keywords: fiduciary, agency, trust, loyalty, care, prudence, agency costs, duty
chapter  books  SSRN  law-and-economics  behavioral_economics  philosophy_of_law  jurisprudence  fiduciaries  agents  principal-agent  freedom_of_contract  trust  trusts  duty_of_care  duty_of_loyalty  conflict_of_interest  legal_reasoning  rights-legal  duties-legal  common_law 
july 2015 by dunnettreader
GF&Co - Joshua Rosner - Is the CDS Market Manipulated? - Dec 2014
Appalling details re ISDA procedures for determining credit events. The Determination Committee is stacked with the 10 big banks that are the major dealers and have a huge financial interest in the outcome. Since they explicitly have no duty of care, no duty to disclose information on which they base their votes even to the other committee members, no transparency re the basis on which the Committee makes a determination or how members voted, and can defer decisions for several meetings running, that would allow them to adjust their book. The example of the Caesars default, which was clear as possible in the indenture but was delayed being determined as a credit event by weeks, is instructive re how little investors can rely on the actual facts but are at the mercy of the big banks' totally arbitrary discretion. Other examples include Elliott on the committee that determined the Argentine credit event *caused* by Elliott. The amounts in the CDS of a high profile company can distort company operations and financial structure to game the declaration of a credit event with the participation of some of the very banks that will decide when an event is triggered -- see RadioShack. The entire risk management function that in theory justifies CDS and the positions investors take, has been completely annulled by the interests of the financial institutions who make the market. The ISDA has become effectively a credit rating agency with no regulatory oversight or controls. The potential amounts involved are staggering, making the LIBOR scandal look penny ante.
Scribd  international_finance  derivatives  self-regulation  financial_regulation  financial_crisis  markets-structure  market_manipulation  conflict_of_interest  fiduciaries  corporate_finance  bankruptcy 
march 2015 by dunnettreader
Cassandra Does Tokyo: Sympathy For The Devil -July 2014
Brilliantly horrifying mock CV of a senior executive moving through all the financial ibdustry's greatest "hits" of the past quarter century, starting with Citibank generating loan deals in the NICs to recycle pétrodollars, through Drexel stuffing LBO junk bonds in related fiduciaries, Long Term Capital, dot com bubble, commodity "swaps" as low risk uncorrelated asset class, of course mortgage securitization, HFT "liquidity provision" via order sniffing, front running, dark pools, selective "market making", and designing equity portfolio insurance for post crash terrified institutional investors (who would lose the entire upside of past 5 years stock prices, plus a few ywists, especially from the '90s involving derivatives, the Nikkei, etc that were off my radar screen. Only thing I think he left out were the various municipal finance scams.
20thC  post-Cold_War  21stC  economic_history  financialization  Great_Recession  financial_innovation  bubbles  busisness-ethics  institutional_investors  derivatives  securitization  HFT  emerging_markets  fraud  fiduciaries  financial_regulation  finance_capital 
september 2014 by dunnettreader
Edward J. Kane -The Flummery of Capital-Requirement Repairs Since The Crisis | The Institute for New Economic Thinking - September 16, 2014
Government safety nets give protected institutions an implicit subsidy and intensify incentives for value-maximizing boards and managers to risk the ruin of their firms. Standard accounting statements do not record the value of this subsidy and forcing subsidized institutions to show more accounting capital will do little to curb their enhanced appetite for tail risk. This paper proposes new accounting and ethical standards that would reclassify the legal status of the financial support a firm receives from the safety net and record it as an equity investment. The purpose is to recognize statutorily that a safety net is a contract that promises to deliver loss-absorbing equity capital to firms at times when no other investors will. The explicit recognition of the public's stakeholder interest in economically, politically, and administratively difficult-to-unwind firms is a first and necessary step toward assigning to their managers enforceable fiduciary duties of loyalty, competence, and care towards taxpayers. These duties are meant to parallel those that managers owe to shareholders, including the right to share in the firm’s profits and to receive information relevant for assessing their investment. The second step in this process is to change managerial behavior: to implement and enforce a series of requirements and penalties that can lead managers to measure and record on the balance sheet of each subsidized firm – as a special class of equity – the capitalized value of the safety-net subsidies it receives from its “taxpayer put.” -- and by defining a class of particularly vexing acts of safety-net arbitrage as criminal theft. -- downloaded pdf to Note
paper  law-and-economics  law-and-finance  corporate_governance  financial_system-government_back-stop  too-big-to-fail  financial_regulation  subsidies-financial_institutions  fiduciaries  accounting  risk-systemic  risk-mitigation  financial_crisis  bailouts  leverage  capital_adequacy  Basle  downloaded  EF-add 
september 2014 by dunnettreader
Joseph Cottrell - Pari Passu Saga Series - Argentina — whom do you trust? | FT Alphaville - September 4, 2014
Outlines new ootion for non vulture fund investors -- a plan by Adam Lerrick for restructured bondholders to extricate themselves from the default simply by voting to kick Bank of New York out as their trustee. BNY would, under the plan, give way to another (probably Argentine) bank not subject to US jurisdiction. This bank then wouldn’t be bound by Judge Griesa’s order for payments to go through only with holdouts also being paid, thus allowing bondholders to get their coupons. Nor would there be the jiggery-pokery of swapping New York-law bonds for local-law. That would be this plan (click for PDF): Lerrick has a decade of experience with the terms of Argentine debt, having advised European retail bondholders in the restructuring of 2005. Some might kick themselves for not having thought of a few aspects of this plan. Ironically — for a saga which showed how a dormant piece of dry boilerplate became a powerful weapon of enforcement against a sovereign debtor — it works using standard, boilerplate, trust indenture terms. -- didn't download
capital_markets  emerging_markets  international_finance  international_law  sovereign_debt  US_legal_system  US_judiciary  payments_systems  fiduciaries  EF-add 
september 2014 by dunnettreader
Jeremy Waldron - Citizenship and Dignity (2012) :: SSRN
NYU School of Law, Public Law Research Paper No. 12-74 -- Theories of dignity have to navigate between two conceptions: the egalitarian idea of human dignity and the old idea of dignitas, connected with hierarchy, rank, and office. One possible way of bridging the gap between the two is to talk of the dignity of the citizen. In modern republics and democracies, the dignity of the citizen extends to a large sector of the population and connotes something about the general quality of the relation between the government and the governed. This chapter first explores Immanuel Kant’s account of the dignity of the citizen, and then it pursues the implications of the dignity of the citizen for modern society and modern theories of human dignity. Though the dignity of the citizen and human dignity are not the same concept, they are congruent in many respects and the former casts considerable light on the latter — in particular on the connection between dignity and responsibility and dignity and transparency in social and political relations. -- Number of Pages in PDF File: 25 -- Keywords: citizenship, contractarianism, dignity, human dignity, Kant, responsibilities, transparency -- downloaded pdf to Note
paper  SSRN  intellectual_history  18thC  Enlightenment  modernity  moral_philosophy  philosophy_of_law  social_theory  democracy  republicanism  republics-Ancient_v_Modern  citizenship  citizens  dignity  Kant  Kant-politics  Kant-ethics  egalitarian  rank  social_order  social_contract  responsibility  office  commonwealth  common_good  fiduciaries  accountability  governing_class  transparency  inequality  political_participation  political_nation  political_economy  political_culture  governmentality  power-asymmetric  downloaded  EF-add 
july 2014 by dunnettreader
Jeremy Waldron - Accountability: Fundamental to Democracy (2014, updated March 2015) :: SSRN
NYU School of Law, Public Law Research Paper No. 14-13 -- This paper defends a new and aggressive version of the agency model of accountability. It argues that officials and representatives in a democracy have an obligation to make available to citizens full information about what they have been doing. It is not permissible for them to sit back and see if the citizens can find out for themselves what they have been doing, any more than such a posture would be admissible in a commercial agent such as a realtor or an accountant. The paper also does several other things: (1) it develops a contrast between agent-accountability and forensic-accountability; (2) it distinguishes between political uses of "agency" and political uses of "trust" in political theory; (3) it develops a layered account of the principals in the democratic relation of agent-accountability, rejecting the reidentification of "the people"; (4) it develops an account of the relation between accountability and elections, emphasizing that elections play an important role in the fair settlement among principals as to how they should deal with their agents; (5) it shows that Burkeian representation is not incompatible with agent-accountability; and (6) it uses the notion of agent-accountability to illuminate the distinction between non-democratic and democratic republics. -- Number of Pages in PDF File: 32 -- Keywords: accountability, agency, Burke, democracy, elections, representation, republic, transparency, trust
paper  SSRN  political_philosophy  philosophy_of_law  legal_system  constitutionalism  democracy  accountability  transparency  agents  representative_institutions  common_good  national_interest  elections  fiduciaries  trust  trusts  government-forms  governing_class  government_officials  office  Burke  downloaded  EF-add 
july 2014 by dunnettreader

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