This Article responds to recent proposals calling for the SEC to adopt a mandatory ESG-disclosure framework. It illustrates how the breadth and vagueness of these proposals obscures the important—and controversial— policy questions that would need to be addressed before the SEC could move forward on the proposals in a principled way. The questions raised include some of the most contested…
Category: Articles
My Creditor’s Keeper: Escalation of Commitment and Custodial Fiduciary Duties in the Vicinity of Insolvency
Fiduciary duties in the vicinity of insolvency form a notoriously murky area where legal space warps. Courts openly acknowledge that it is difficult to identify its boundaries, and the content of these duties is equally uncertain and inconsistent across jurisdictions. This Article expands the theoretical basis for a special legal regime in virtually or liminally insolvent firms. In addition to…
Whistleblowers: Implications for Corporate Governance
Whistleblowers are not among the actors who populate academic accounts of corporate governance. Nor are whistleblowers visible in formal governance frameworks consisting of legal and non-legal elements that enable a firm to operate, all traceable to a corporation’s charter and bylaws adopted in compliance with the law of the state of incorporation. Within a corporation,…
A New Caremark Era: Causes and Consequences
What role does corporate law play in holding directors accountable for compliance failures? Until recently, the answer has been “very little.” The prevalent standard for director oversight duties (Caremark duties) was set high, effectively demanding that plaintiffs show scienter without having access to discovery. As a result, derivative actions over directors’ failure of oversight were routinely dismissed at the pleading…
The Rise of International Corporate Law
Comparative corporate governance has focused either on prevailing differences across legal systems or on spontaneous legal transplants of foreign institutions in response to global competition. This Essay argues that corporate law today is not only a product of the invisible hand of the market but also of the soft (and not-so-soft) hands of international organizations and standard setters. By tracing…
Delaware’s Fiduciary Imagination: Going-Privates and Lord Eldon’s Reprise
Stop Blaming Milton Friedman!
A 1970 New York Times essay on corporate social responsibility by Milton Friedman is often said to have launched a shareholder-focused reorientation of managerial priorities in corporate America. The essay correspondingly is a primary target of a rapidly growing group of critics of the present shareholder-centric approach to corporate governance. This article argues that it is erroneous to blame (or…
Negative-Value Property
Ownership is commonly regarded as a powerful tool for environmental protection and an essential solution to the tragedy of the commons. But conventional property analysis downplays the possibility of negative-value property, a category which includes contaminated, depleted, or derelict sites. Owners have little incentive to retain or restore negative-value property and much incentive to alienate it. Although the law formally prohibits…
Drugs, Patents, and Well-Being
The ultimate end of patent law should be to spur innovations that improve human welfare—innovations that make people better off. But firms will only invest resources in developing patentable inventions that will allow them to make money—that is, inventions that people will want to use and buy. This can gravely distort the types of incentives that firms face and the…
Pleading the Fifth in Immigration Court: A Regulatory Proposal
Protections of noncitizens’ rights in immigration removal proceedings have remained minimal even as immigration enforcement has exponentially increased. An overlooked, but commonplace, problem in immigration court is the treatment of the constitutional right against self-incrimination. Two routine scenarios occur where noncitizens are asked to sacrifice their right against self-incrimination in immigration court. One involves testimony regarding conduct related to immigration status…
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