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Stakeholderism is a theory of corporate governance which states that directors manage the corporation in the interest of all stakeholders of the firm. This theory of corporate governance has gained increasing popularity and traction and corporate legal scholarship has sought to justify it. However, these justifications for stakeholderism are neither descriptively consistent with Delaware law nor accurate in their theories of the firm, as stakeholderists claim. Enlightened shareholder value stresses the lack of tradeoffs or the ubiquity of win-win scenarios between shareholders and stakeholders, but this is empirically dubious when considering the effect of pro-stakeholder policies on firm value. Despite the lack of justification, the desire for corporations to serve some public benefit is not going anywhere. I propose that shareholder welfare maximization is a more theoretically coherent means to justify corporate concern for social goods and that the corporate ecosystem could evolve to chiefly include shareholder value firms seeking to maximize shareholders’ economic interests, and shareholder welfare firms seeking to maximize both shareholder’s economic and social interests as their ultimate end.

What is the relationship between the corporation and American democracy? This provocative and timely question informs the ten essays that Naomi R. Lamoreaux and William J. Novak have assembled in a tightly edited volume that has attracted a good deal of attention from specialists in the history of U.S. public policy. In an age in which the political influence of big business has once again thrust itself onto the political agenda, this collection should also prove to be of great interest to the many historians, legal scholars, and jurists who are trying to understand the long and complex relationship between business, law, and the state. This is a review of Corporations and American Democracy. Edited by Naomi R. Lamoreaux and William J. Novak. Cambridge, MA: Harvard University Press, 2017. viii + 517 pp. Maps, figures, tables, notes, index. Cloth, $35.00. ISBN: 978-0-674-97228-5.

Поділ юридичних осіб на осіб приватного права і публічного права є розвитком концепції дихотомії приватно і публічного в праві. Не заперечуючи поділ права на приватне і публічне зазначимо, що наведений аспект питання, на наше переконання, формулює бінарне бачення природи юридичної особи. Так, за логікою статті 81 Цивільного кодексу України юридична особа має диференційовану правосуб’єктність в праві приватному і публічному. 50 При цьому з урахуванням природи поділу права на право приватне і право публічне, очевидним є варіативність наповнення змісту конструкції юридичної особи. Отже ми маємо розуміння юридичної особи в приватному праві відмінне від сутності юридичної особи в праві публічному. В наведеному аспекті слід зазначити, що само розуміння юридичної особи публічного права або юридичної особи в публічному праві має внутрішні суперечності. Правова конструкція юридичної особи створена для забезпечення цивільного обороту. Об’єднання інтересу або капіталу осіб призвело до створення фікції, яка реалізує власну волю і виступає в цивільному обороті від свого імені. Її активність інтерполюється через ознаки: організаційної єдності, відокремленості майна, самостійної юридичної відповідальності та автономності участі в цивільному обороті. Не викликає сумніву, що вказаними ознаками юридична особа публічного права не може бути наділена. І це зрозуміло, отже в публічному праві його суб’єкту, для реалізації власної компетенції статус юридичної особи не потрібний. Прикладом цьому є Верховна Рада України або Кабінет Міністрів України. Наведене не дозволяє стверджувати, про існування в цивільному праві особливого суб’єкта – юридичної особи публічного права або юридичної особи приватного права відмінної від юридичної особи приватного права. Як зазначено вище, юридична особа – носій предметно-практичної діяльності, сукупна єдність волі, інтересу та капіталу персоніфікованих осіб, яка скерована на досягнення визначеної мети діяльності. Її природа має сингулярний характер. Отже доцільним є не стільки поділ юридичних осіб на осіб приватного і публічного права, скільки класифікація функцій юридичних осіб відносно характеру правовідносин, в яких вони є учасниками. Такий підхід виключає деформацію цивілістичної природи юридичної особи, концентруючи увагу на характері тих функцій (приватно-правових або публічно-правових) які юридична особа реалізує в конкретних правовідносинах. Підтвердженням цієї тези є численна судова практика. Так, в одній із своїх постанов Велика Палата Верховного Суду (Постанова Великої Палати Верховного Суду від 07 серпня 2019 року по справі №826/4264/17)

William Howard Taft—the most under-appreciated constitutional figure since George Mason, the father of the Bill of Rights—is no doubt best known as the 27th President, but his most significant contributions to our constitutional order came as Chief Justice. The federal judiciary today is the federal judiciary Taft gave us. During his tenure as Chief Justice, Taft convinced the Congress to create the Judicial Conference as the governing body of the federal courts; give the Supreme Court its own building; and, in the Judiciary Act of 1925, eliminate most of the Supreme Court’s mandatory jurisdiction.1 These reforms bolstered the independence of the federal judiciary, and permanently elevated its role in our society. Taft also made important contributions to antitrust, both as a judge2 and during his time as president. Although his predecessor, Teddy Roosevelt, is remembered as the “trustbuster,” Taft’s administration brought nearly twice as many cases in half the time.3 As Jeff Rosen explains in his excellent brief biography of Taft, TR and his successor had diametrically opposed ideas about how best to assure the competitiveness of markets.4 Roosevelt championed a regulatory model, with strict federal oversight of large corporations.5 Taft favored a law enforcement model, with aggressive prosecution of anticompetitive conduct, bearing in mind that “[m]ere size is no sin against the law.”6 In my view, Taft’s approach was preferable and has been vindicated over the course of the last century. The regulatory model would have substituted the discretion of regulators for the decisions of risk takers, with distortionary and welfare-reducing effects. The law enforcement approach, by contrast, protects competition while adhering to the rule of law.7 In this Article I hope to continue in Taft’s reformist footsteps by suggesting some additional tools antitrust enforcers and courts can use to make coherent, evidence-based decisions in the face of measurement difficulties.

Recent media reports and press releases have created the impression that Artificial Intelligence (AI) is on the verge of assuming an important role in corporate management. While, upon closer inspection, it turns out that these stories should not always be taken at face value, they clearly highlight AI’s growing importance in management and hint at the enormous changes that corporate leadership may experience in the future. This Article attempts to anticipate that future by exploring a thought experiment on corporate management and AI. It argues that it is not an insurmountable step from AI generating and suggesting expert decisions (which is already common today) to AI making these decisions autonomously. The Article then proceeds based on the assumption that next-generation AI will be able to take over the management of business organizations and explores the corporate law and governance consequences of this development. In doing so, the Article focuses on the fundamental areas of corporate leadership and management structures, managerial liability, and the corporate purpose. It also considers the phenomenon of algorithmic entities and leaderless entities., Columbia Business Law Review, Vol 2019 No 3

Las sociedades requieren llevar a cabo procesos de reorganización societaria. La finalidad de realizar estos procesos, es sin duda, una de carácter económico, sustentada muchas veces en la obtención de sinergias, estrategias comerciales, posicionamiento en el mercado, obtención de activos o beneficios futuros, etc.; lo cual conllevan necesariamente a la evaluación de diversos aspectos legales, financieros, tributarios, entre otros. En dicho contexto, en el Perú se regulan distintos tipos de reorganización societaria, a través de las cuales las sociedades participantes pueden obtener las finalidades antes descritas; sin embargo, estos procesos a su vez pueden traer situaciones adversas para los socios o accionistas, o también para los terceros acreedores de dichas sociedades. Ante ello, la legislación societaria peruana dota tanto a los socios, como a los terceros acreedores, de mecanismos de protección de sus derechos ante estas situaciones desfavorables; no obstante ello, estos mecanismos no se regulan en todos los tipos de reorganización societaria contemplados en nuestra legislación. Este es el caso de la reorganización simple, la cual de acuerdo a su redacción vigente, no contempla un mecanismo regulado para la defensa de los acreedores, que si se encuentra regulado para otros tipos de reorganización societaria, lo cual puede llevar en determinados supuestos que estos vean afectados las garantías para hacer efectivo el cobro de sus acreencias producto de las transferencias patrimoniales propias de este tipo de procesos, sin tener la posibilidad de oponerse. Tesis

In this paper we consider the corporate governance challenges of the protection of outside investors of listed controlled firms. European jurisdictions are supposed to be more veteran and skilled in dealing with these firms, at least in comparison to the American experience. As this article explains, in spite of the regulatory effort that European jurisdictions have made during the last decades, outside investors in European listed firms with controlling shareholders are poorly protected compared to US investors. We trace this problem back to the distinct European approach to the protection of investors based on empowering active shareholders and we are able to explain why in these jurisdictions shareholder protection can be considered high, while outside investors’ protection can be considered low at the same time, i.e. the “strong shareholders-weak outside investors” problem. We analyze the failure of liability, voice and exit measures to protect outside investors from expropriation in these jurisdictions and find that, before these measures can be tightened, it is necessary tackle the inefficiencies in the market environment that make European companies chose complex business structures and operations based on self-dealing. Therefore we argue that an indirect approach, based on fostering competition in the different markets where companies operate, is a necessary complement to any corporate governance reform directly aimed at enhancing the position of outside investors, limiting minority expropriation, reducing the cost of financing for listed European firms and increasing their growth opportunities and value.

Indexado en Latindex (Catálogo 2.0) El artículo trata sobre las denominadas acciones con derecho a veto, un tipo especial de acciones poco difundidas, pero que pueden ser de gran utilidad. Se estudiará su historia, ventajas y desventajas a partir de la revisión de la legislación peruana sobre la materia.

LL.D. Please refer to full text to view abstract

LL.M. (Human Rights Law) The idea of “development” being a legitimate universal human entitlement is not a new phenomenon. The emergence of this concept can be traced back to a number of universal norms which emerged from the United Nations (UN) legal framework since its creation in 1945.These norms include principles such as: greater democracy and representation in international relations; the economic complementarities of independent States; individuals as beneficiaries of social, economic and political development; respect for human rights; and the interrelationship between human rights and development.1 These principles provided the background against which the first UN working group on the Right to Development started elaborating a legal framework aiming at providing a binding solution to the conflict between industrialized States and developing States concerning the distribution of the world’s resources in 1970. At that time, the atmosphere at the UN Commission on Human Rights was highly charged with ideological positioning. Socialist countries pressed for peace and disarmament; developing States for development and an end to apartheid; Western industrialized States for establishing damage control machinery to scrutinize violations of civil and political rights.2 In 1977, the Commission on Human Rights submitted to the U.N Secretary General its first proposal which considered the suggestion of the UN Working group on the Right to Development. The proposal suggested that the “universal entitlement to development” was a prerogative of States on behalf of their populations.3 This proposal was rejected in 1979 by the conservative North American, European members of the U.N, and other committee members.

The objective of this paper is to discuss and compare the role that different constituencies play in US and EU procedures for merger control. We describe the main constituencies (both internal and external) involved in merger control in both jurisdictions and discuss how a typical merger case would be handled under these procedures. At each stage, we consider how the procedure unfolds, which parties are involved, and how they can affect the procedure. Our discussion reveals a very different ecology. EU and US procedures differ in terms of their basic design and in terms of the procedures that are naturally associated with these alternative designs. On the one hand, there is a single investigator and decision maker operating under a symmetric mandate in the EU and on the other hand, an investigation and settlement operating under the threat of a court decision in case of challenge only in the US. The EU has developed numerous procedures and has granted extensive rights to the parties in the context of these procedures in order to provide some guarantee that the Commission’s role as investigator and decision maker at first instance is not abused. By contrast, the US procedures appear to be rather informal, the balance in the investigation and evaluation of the merger being provided by the credible threat of a court decision. With a strong federal government that has extensive competences for regulation, merger control on competition grounds is subject to the additional public interest test of regulators in the US. Such additional control is weak in the EU, which has more limited competences for regulation. In addition, both the executive and the legislative powers are more fully developed at the federal level in the US. Both the executive power and the legislative seem to be in position to wield greater influence on enforcement in the US than is the case in the EU.

LL.M. The main objective of the South African interrogation procedures during corporate insolvency is to trace and recover all corporate assets. The focus of such procedures is therefore on gathering information rather than investigating any probable causes of the insolvency and failure of the company, as English legislation prescribes. At present in South Africa no reasons have to be supplied to creditors, contributors or the public to explain the failure of companies. This situation contributes to the hesitant and sceptical attitude of the public towards companies and their reluctance to invest in companies. This aspect of our insolvency law can also have a negative impact on the level of foreign investment. The question therefore arises on how the insolvency industry should deal with the various challenges that such a situation presents, which entails at the same time challenging the general effectiveness of the South African insolvency system in its entirety.

Improving economic welfare requires that society’s scarce savings be allocated among proposed real investment projects in a way that appreciates the prospects of promising new innovations. Corporate and securities law help structure important elements of this process of allocation. This article sketches out an approach based upon a seemingly paradoxical analogy of a market economy’s overall finance process to the way a hierarchical organization gathers and processes relevant bits of information dispersed among many individuals in order to make decisions. It thereby takes advantage of important thinking in communications and organizational theory about how to make organizations sensitive to the potentialities of new information and ideas. The analysis suggests that established firms should pay out a relatively high portion of their cash flows. There should be a substantial venture capital sector and an active market for IPOs. Primary and secondary market prices should be relatively accurate. Incumbent managers of established firms should be judged in part by the medium term share price performance of their firms and poor performers should be under threat of replacement. A comparison of four moments in economic history—the United States in the 1970s and 1980s, Japan since 1995, continental Europe since the 1995, and the United States since the 1995—supports these conclusions. The United States since 1995, relative to the other three moments in economic history, has had the least capital deepening and the fastest rate of growth in productivity per hour worked. It has also had, relative to the other three moments, a finance system most closely resembling what is called for here. Achieving such a system requires rigorous, effectively enforced securities disclosure and anti-fraud laws. Corporate law must leave poorly performing incumbent management vulnerable to removal by hostile tender offer, or shareholder or independent board vote. Share price based compensation must be legally practical. And there must be serious constraints on non-pro-rata distribution among shareholders of the wealth created by the firm.

The Supreme Court spoke clearly this Term on the issue of corporate political speech, concluding in Citizens United v. FEC that the First Amendment protects corporations’ freedom to spend corporate funds on indirect support of political candidates. Constitutional law scholars will long debate the wisdom of that holding, as do the authors of the two other Comments in this issue. In contrast, this Comment accepts as given that corporations may not be limited from spending money on politics should they decide to speak. We focus instead on an important question left unanswered by Citizens United: who should have the power to decide whether a corporation will engage in political speech?

This paper will analyze the way whereby the notion of sustainable development is incorporated into the field of Financial Law, Banking Law and Company Law. This takes place mainly by soft law means. The various Financials Institutions (FIs) and companies have an important impact on sustainable development, not directly but indirectly through the loans, the investments, the guarantees, and the project financing which they offer to various enterprises. It is well-known that many companies need the financing of banks and other FIs in order to expand their business activities and to complete various technical projects. The responsibility for the environmental pollution arising from the business activities of these companies could be partly shared with their financiers. Hence, the areas of law mentioned above must provide the necessary safeguards that financing and other investments would not be granted to companies or construction projects which could possible have an adverse impact on environment. The Equator Principles (EPs) play an important role towards the achievement of this goal. The EPs are a code of conduct which was drawn up under the auspices of the World Bank group and which is adopted voluntarily by banks and other FIs which grant loans and other methods of financing to companies and projects of developing countries. The developing countries rely more on project financing than the developed countries which own the necessary capitals thus, the adoption of these principles by the investment banks is very important for the environmental protection in the developing countries. ABSTRACT FROM AUTHOR] Copyright of ICFAI Journal of Banking Law is the property of IUP Publications and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) 7 8 19 8-19

The civil penalty regime was introduced in 1993 to ensure ASIC would have at its disposal criminal penalties for conduct that is genuinely criminal in nature and civil penalties for breaches of the directors' duties where no criminality is involved. The regime was designed to comply with strategic regulation theory. This thesis examines ASIC's use of the civil penalty regime for the purpose of determining whether or not ASIC has utilized it for the reasons for which it was introduced. One of the research questions examined in this thesis is whether or not the civil penalty regime has provided ASIC with an effective enforcement mechanism for non-criminal contraventions of the civil penalty provisions. In order to answer that question this thesis examines the factors which inform ASIC's choice of the civil penalty regime. Various factors inform ASIC's choice, however in situations where ASIC has the choice of the civil penalty or the criminal regime, the overriding factor is ASIC's and the DPP's stated policy to pursue a criminal prosecution in all cases where there is sufficient evidence to support one. A consequence of the implementation of this policy is that very few civil penalty applications have been issued when compared with other enforcement activity instigated by ASIC. The civil penalty regime has been utilised almost exclusively in situations where a criminal prosecution was not available, or the DPP was satisfied there was insufficient evidence to sustain one. This factor, coupled with the fact that ASIC has achieved a high level of success with the civil penalty applications it has issued means that the civil penalty regime has provided ASIC with an effective enforcement mechanism for contraventions of the civil penalty provisions in situations where a criminal prosecution could not have been sustained or was not available. Another research question examined in this thesis is whether the civil penalty regime has been utilised in a manner envisaged by strategic regulation theory. A consequence of the adoption of a policy of issuing criminal prosecutions in all cases where one is available is that the civil penalty regime does not map on to the enforcement pyramid in a manner envisaged by strategic regulation theory.

This chapter surveys the theoretical and empirical research on the main mechanisms of corporate law and governance, discusses the main legal and regulatory institutions in different countries, and examines the comparative governance literature. Corporate governance is concerned with the reconciliation of conflicts of interest between various corporate claimholders and the resolution of collective action problems among dispersed investors. A fundamental dilemma of corporate governance emerges from this overview: large shareholder intervention needs to be regulated to guarantee better small investor protection; but this may increase managerial discretion and scope for abuse. Alternative methods of limiting abuse have yet to be proven effective.

Conflicts of interest in corporate law can be addressed by two main alternatives: a requirement of a majority of the minority vote or the imposition of duties of loyalty and fairness. A comparison of Delaware, the UK, Canada, and Israel reveals that while the conflicts of interest problem within publicly-traded corporations receives different treatment in the different jurisdictions — either a fairness rule or a majority of the minority rule — closely-held corporations receive the same treatment of an imposition of duties of loyalty and fairness. This article explains this finding, demonstrating that determining which of these rules is adopted is, in fact, a choice between liability rule protection and property rule protection. This choice depends on the total and relative transaction costs. These costs include both the negotiation costs attendant upon a property rule, as well as the adjudication costs associated with a liability rule. The sum of these costs is influenced by the efficacy of the judicial system and of extralegal mechanisms such as the market for corporate control, the capital market, and the types of investors active in the market. Because the different jurisdictions have different relative costs, due to differences in the economy and the legal systems, publicly-traded corporations are treated differently in each system. However, sometimes conflict of interest situations share the same main characteristics — as with closely-held corporations—leading to the domination of one solution, and thus the same solution is applied for closely-held corporations in the different jurisdictions.

The thesis examines the ways in which the directors and other officers of a company that operates a managed investment scheme can be held legally accountable for maladministration of the scheme's affairs. It demonstrates that the officers' legal accountability for maladministration arises under a combination of corporations law principles, equitable principles that apply to the officer as a consequence of the fiduciary relationship between the operator and the investors, and (where they apply) the regulatory regimes governing the provision of financial services and the operation of registered schemes. The thesis identifies the types of conduct on the part of an officer that can result in personal liability under these principles, and examines remedies and sanctions that are available to the operator, the investors, scheme creditors, and the State.

Voting lies at the center of collective decision-making in corporate law. While scholars have identified various problems with the voting mechanism, insincere voting—in the forms of strategic voting and conflict of interests voting—is perhaps the most fundamental. This article shows that insincere voting distorts the voting mechanism at its core, undermining its ability to determine transaction efficiency. As further demonstrated, strategic and conflict of interests problems frequently coincide with one another: voting strategically often means being in conflict, and many fact patterns present aspects of both problems. Finally, this article claims that although the two problems have seemingly different solutions, these solutions are essentially similar in nature: all solutions to insincere voting are variations on two basic rules, namely, property rules and liability rules.