Stephen M. Bainbridge's research while affiliated with University of California, Los Angeles and other places
What is this page?
This page lists the scientific contributions of an author, who either does not have a ResearchGate profile, or has not yet added these contributions to their profile.
It was automatically created by ResearchGate to create a record of this author's body of work. We create such pages to advance our goal of creating and maintaining the most comprehensive scientific repository possible. In doing so, we process publicly available (personal) data relating to the author as a member of the scientific community.
If you're a ResearchGate member, you can follow this page to keep up with this author's work.
If you are this author, and you don't want us to display this page anymore, please let us know.
It was automatically created by ResearchGate to create a record of this author's body of work. We create such pages to advance our goal of creating and maintaining the most comprehensive scientific repository possible. In doing so, we process publicly available (personal) data relating to the author as a member of the scientific community.
If you're a ResearchGate member, you can follow this page to keep up with this author's work.
If you are this author, and you don't want us to display this page anymore, please let us know.
Publications (108)
Cambridge Core - Corporate Law - Outsourcing the Board - by Stephen M. Bainbridge
The modern corporation has become central to our society. The key feature of the corporation that makes it such an attractive form of human collaboration is its limited liability. This book explores how, by allowing those who form the corporation to limit their downside risk and personal liability to only the amount they invest, there is the opport...
Reverse veil piercing (RVP) is a corporate law doctrine pursuant to which a court disregards the corporation’s separate legal personality, allowing the shareholder to claim benefits otherwise available only to individuals. The thesis of this article is that RVP provides the correct analytical framework for vindicating certain constitutional rights....
In a recent UCLA Law Review article, The New Investor, 60 UCLA Law Review 678 (2013), available on SSRN at: http://ssrn.com/abstract=2227498, Professor Lin argues that: Technological advances have made finance faster, larger, more global, more interconnected, and less human. Modern finance is becoming an industry in which the main players are no lo...
The London Interbank Offered Rate (LIBOR) is the trimmed average interest rate for interbank loans by a panel of leading London banks. LIBOR is the most widely used benchmark rate. An estimated $350 trillion in financial products are based on the LIBOR rate. In late June 2012, a major scandal broke when Barclays PLC — one of the panel banks whose r...
State corporate law requires director services be provided by “natural persons.” This Article puts this obligation to scrutiny, and concludes that there are significant gains that could be realized by permitting firms (be they partnerships, corporations, or other business entities) to provide board services. We call these firms “board service provi...
This essay will serve as the introduction to a collection of 23 newly commissioned articles on numerous aspects of insider trading law. The contributors cover a wide variety of topics, ranging from analyses of current issues in USA insider trading law, empirical analyses of insider trading both in the USA and around the globe, and global perspectiv...
In Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), the Delaware Supreme Court explained that when a target board of directors enters Revlon-land, the board’s role changes from that of “defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company.” U...
A personal and professional tribute to Michael P. Dooley, the William S. Potter Professor of Law Emeritus at the University of Virginia School of Law, upon his retirement in 2012.
This essay was prepared for a forthcoming book on the law and economics of insider trading. In Chiarella and Dirks, the Supreme Court based insider trading liability on a breach of a disclosure obligations arising out of a fiduciary relationship. The resulting narrowing of the scope of insider trading liability met substantial resistance from the S...
The years from 2000 to 2010 were bookended by two major economic crises. The bursting of the dotcom bubble and the extended bear market of 2000 to 2002 prompted Congress to pass the Sarbanes-Oxley Act, which was directed at core aspects of corporate governance. At the end of the decade came the bursting of the housing bubble, followed by a severe c...
Corporate lawyers traditionally viewed themselves - and were viewed by the managers who hired them - as advocates, confidents, and advisors, not as gatekeepers like auditors. In fact, however, lawyers often play a reputational intermediary role not dissimilar to that of an auditor. A very high profile general counsel or law firm partner, for exampl...
This essay provides a brief overview of the seven principal corporate governance provisions of The Wall Street Reform and Consumer Protection Act of 2010 (better known as “The Dodd-Frank Act”). 1. Section 951 creates a so-called “say on pay” mandate, requiring periodic shareholder advisory votes on executive compensation. 2. Section 952 mandates th...
This essay was prepared for a forthcoming book on the impact of law on the U.S. economy. It focuses on the impact the corporate governance regulation has had on the global competitive position of U.S. capital markets.During the first half of the last decade, evidence accumulated that the U.S. capital markets were becoming less competitive relative...
In 2005, Roberta Romano famously described the Sarbanes-Oxley Act as “quack corporate governance.” In this article, Professor Stephen Bainbridge argues that the corporate governance provisions of the Dodd-Frank Act of 2010 also qualify for that sobriquet. The article identifies 8 attributes of quack corporate governance regulation: (1) The new law...
The events that began with the collapse of Enron, WorldCom, Tyco, and Adelphia and continued into the financial crisis of 2008 teach us an important lesson: corporate governance matters. Although it is widely acknowledged that good corporate governance is a linchpin of good corporate performance, how can one improve corporate governance and its imp...
A 2004 study of the results of stock trading by United States Senators during the 1990s found that that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasona...
Since its inception, corporate law has separated ownership and control. Shareholders nominally own the corporation, but they are entitled to exercise almost nonce of the control rights normally associated with ownership or property. Instead, control of the corporation is vested by statute in the board of directors.This essay is premised on the assu...
During the 1980s, many states adopted statutes intended to regulate corporate takeovers. The Supreme Court validated one of these statutes, The Indiana Control Shares Acquisition Statute, in CTS Corp. v. Dynamics Corp., 481 U.S. 69 (1987), against both preemption and commerce clauses challenges. Since CTS, state takeover laws have routinely withsto...
There is growing political support for adopting a 'Say on Pay' requirement for executive compensation - that is, shareholders must sign off on executive compensation. This paper examines three premises fundamental to the 'Say on Pay; movement: that current executive compensation is unjustifiably high, that federal legislation is required to address...
A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasona...
The financial crisis of 2008 and the ascendancy of the Democratic Party in Washington have created an environment in which proponents of expanded shareholder corporate governance rights are making considerable progress. Even before the crisis hit, of course, there had been a number of efforts to extend the shareholder franchise, principally so as t...
In this short essay for a forthcoming symposium, I comment on the North Dakota Publicly Traded Corporations Act. North Dakota hopes that the Act will empower it to compete with Delaware in the market for corporate charters. In my view, North Dakota is doomed to failure. If state chartering competition is a race to the bottom, managers will prefer D...
The financial crisis of 2008 revealed serious and widespread risk management failures throughout the business community. Shareholder losses attributable to absent or poorly implemented risk management programs are enormous.Efforts to hold corporate boards of directors accountable for these failures likely will focus on so-called Caremark claims. Th...
The rise of the institutional investor has been hailed as a corrective to the principal-agent problem for publicly held firms. It is argued that, because institutions typically own larger blocks than individuals and have an incentive to develop specialized expertise in making and monitoring investments, institutional investors can play a far more a...
Although the prohibition on taking of organizational opportunities is well established, the standards applied to this problem in corporate law disputes are vague and imprecise. Corporate directors and officers lack clear guidance as to when a particular business venture may be taken for themselves or must first be offered to the corporation. In thi...
I review and comment herein on Anupam Chander's article, Minorities, Shareholder and Otherwise, 113 Yale L.J. 119 (2003). My critique focuses mainly on his underlying premise or, to put it another way, on showing that his analysis of corporate law doctrine is fundamentally flawed. Chander argues that, unlike constitutional law, "corporate law place...
Shareholders of U.S. corporations historically tended towards rational apathy. Holding small blocks that were unable to affect the outcome of the vote and faced with the considerable costs associated with gathering sufficient information to make an informed decision, they adopted the so-called Wall Street Rule (it was easier to switch than fight)....
Smith v. Van Gorkom arguably was the most important corporate law decision of the 20th century. The supreme court of a state widely criticized for allegedly leading the race to the bottom held that directors who make an uninformed decision face substantial personal liability exposure. In so doing, the court breathed new life into the law of fiducia...
On April 16, 2008, the author received the UCLA School of Law's Rutter Award for Excellence in Teaching. This essay consists of a revised and extended version of the remarks he gave on that occasion. In it, he addresses his progression from frustrated Socratic teacher to happy lecturer and his aspirations for incorporating new technologies into his...
These remarks were presented to the Penn Law and Economic Institute's Chancery Court Program on Say on Pay: A Positive Contribution To Corporate Effectiveness and Accountability Or An Unprincipled and Costly Incursion Into Director Authority? Proponents of H.R.1257 or similar federal legislation entitling shareholders to vote on executive compensat...
This essay traces the evolution of insider trading jurisprudence, focusing on the three iconic Supreme Court decisions: Chiarella, Dirks, and O'Hagan. The essay argues that all three cases were seriously flawed because each failed to cohere as to either policy or doctrine. Just as a child might break his toy by attempting to force a square peg into...
This essay is the foreword to a forthcoming Liberty Fund collection of Henry Manne's writings on insider trading. The piece is introductory and descriptive, rather than analytical and normative, providing an overview of Manne's thought.
Turning 5 is a major milestone, whether one is talking about a child, a wedding anniversary, or a piece of legislation. As the Sarbanes-Oxley Act approaches age 5, it's appropriate to look back at how the Act has affected American businesses and also to look forward to assess future trends. After all, the Sarbanes-Oxley Act had the biggest impact o...
In Stone v. Ritter, 911 A.2d 362 (Del. 2006), two important strands of Delaware corporate law converged; namely, the concept of good faith and the duty of directors to monitor the corporation's employees for law compliance. As to the former, Stone puts to rest any remaining question as to whether acting in bad faith is an independent basis of liabi...
In his essay, Toward Common Sense and Common Ground?, Delaware Vice Chancellor Leo Strine seeks to identify common concerns of corporate management, labor, and shareholders. In so doing, Strine endorses a vision of the corporation as "a social institution that, albeit having the ultimate goal of producing profits for stockholders, also durably serv...
At a May 2007 Roundtable on The Federal Proxy Rules and State Corporation Law, the Securities and Exchange Commission posed the following question for discussion: What should be the relationship of federal and state law with respect to shareholders' voting rights and ability to govern the corporation? To answer that question, this essay reviews the...
Where the contract between a corporation and one of its creditors is silent on some question, should the law invoke fiduciary duties as a gap filler? In general, the law has declined to do so. There is some precedent, however, for the proposition that directors of a corporation owe fiduciary duties to bondholders and other creditors once the firm i...
Since 1950, more than 11,500 sex abuse claims have been filed against priests and other agents of the Roman Catholic Church. The eventual direct costs to the Catholic Church of the priest abuse litigation are predicted to range from $2 to $3 billion. The corporate structure of the Church under civil law can have a substantial impact on the ability...
Recent years have seen a number of efforts to extend the shareholder franchise. These efforts implicate two fundamental issues for corporation law. First, why do shareholders - and only shareholders - have voting rights? Second, why are the voting rights of shareholders so limited? This Article proposes answers for those questions. As for efforts t...
This essay was prepared for presentation as a lecture to the Hoover Institution. In it, I focus on three areas in which the Public Company Accounting Reform and Investor Protection Act, popularly known as the Sarbanes-Oxley Act (SOX), has proven especially problematic. First, the legal ethics rules added to the Act at the last minute have proven in...
This essay is a response to Lucian Bebchuk's recent article The Case for Increasing Shareholder Power, 118 Harvard Law Review 833 (2005). In that article, Bebchuk put forward a set of proposals designed to allow shareholders to initiate and vote to adopt changes in the company's basic corporate governance arrangements. In response, I make three pri...
In Unocal Corp. v. Mesa Petroleum Co., the Delaware Supreme Court made clear that the board of directors of a target corporation "is not a passive instrumentality" in the face of an unsolicited tender offer or other takeover bid. To the contrary, so long as the target board's actions are neither coercive nor preclusive, the target's board remains "...
Recent years have seen a number of efforts to extend the shareholder franchise, principally so as to empower institutional investors. The logic of these proposals is that institutional investors will behave quite differently than dispersed individual investors. Because they own large blocks, and have an incentive to develop specialized expertise in...
Recent years have seen a number of efforts to extend the shareholder franchise. These efforts implicate two fundamental issues for corporation law. First, why do shareholders - and only shareholders - have voting rights? Second, why are the voting rights of shareholders so limited? This essay proposes answers for those questions. As for efforts to...
Pay Without Performance: The Unfulfilled Promise of Executive Compensation by Harvard law professor Lucian Bebchuk and UC Berkeley law professor Jesse Fried is an important contribution to the literature on executive compensation. Bebchuk and Fried's positive account of executive compensation is entirely managerialist; i.e., they argue that top man...
This essay was written for a forthcoming festschrift in honor of my UCLA School of Law colleague, coauthor, and friend William A. Klein. The conference is organized around Bill's claim that corporate law scholarship would benefit if scholars were more explicit about the normative criteria that motivate their analyses and policy recommendations. In...
This brief essay was prepared for a forthcoming symposium on Directive 2003/6/EC of the European Parliament and of the Council, which inter alia mandates a uniform regulatory regime for insider trading among EU member states. In this essay, I review the evolution of insider trading law in the United States for the benefit of EU observers in connect...
Courts are now routinely applying the corporate law doctrine of veil piercing to limited liability companies. This extension of a seriously flawed doctrine into a new arena is not required by statute and is unsupportable as a matter of policy. The standards by which veil piercing is effected are vague, leaving judges great discretion. The result ha...
This essay reviews The Nature of the Common Law by Melvin A. Eisenberg (Harvard University Press, 1988). Professor Eisenberg's stated goal therein "is to develop the institutional principles that govern the way in which the common law is established in our society." In the course of doing so, Eisenberg addresses the functions of courts in American...
The Securities and Exchange Commission (SEC) recently proposed a set of amendments to its proxy rules intended to provide shareholders of public corporations with a limited ability to nominate candidates for a corporation's board of directors and to have their nominee placed on the corporation's own proxy statement and card. This essay reviews the...
This brief essay explores Catholic social thought on corporate governance. Human dignity and freedom are central principles of Catholic social thought. This essay argues that preserving the economic freedom of corporations to pursue wealth is an essential part of effective means for achieving human freedom. To the extent prudential judgments about...
Prepared for a conference on the Sarbanes-Oxley Act (a.k.a. the "Public Company Accounting Reform and Investor Protection Act" of 2002), this Article focuses on the professional responsibility rules promulgated by the Securities and Exchange Commission under Section 307 of the Act. According to the theoretical model of corporate governance espoused...
The business judgment rule is corporate law's central doctrine, pervasively affecting the roles of directors, officers, and controlling shareholders. Increasingly, moreover, versions of the business judgment rule are found in the law governing the other types of business organizations, ranging from such common forms as the general partnership to su...
Prepared for a symposium on the role business and legal ethics played in the Enron, WorldCom, and other recent corporate governance scandals, and the relationship (if any) between business ethics and the legal profession's rules of professional responsibility, this paper examines the changes effected by Section 307 of the "Public Company Accounting...
The collapse of Enron and WorldCom, along with only slightly less high profile scandals at numerous other U.S. corporations, has reinvigorated the debate over state regulation of corporate governance. Post-Enron, politicians and pundits called for federal regulation not just of the securities markets but also of internal corporate governance. As Co...
Corporations frequently, make use of precommitment strategies. Examples include such widely used devices as negative pledge covenants and change of control clauses in bond indentures fair price shark repellents, no shop and other exclusivity provisions , in merger agreements, mandatory indemnification bylaws, and so on. This paper argues that poiso...
This Response comments on an article by Harvard Professors Bebchuk, Coates, and Subramanian: Lucian Ayre Bebchuk, John C Coates IV & Guhan Subramanian, The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy, 54 STAN. L. REV. 887 (2002). Bebchuk, Coates, and Subramanian's data demonstrate that (1) the incidence of staggere...
Mandatory disclosure is a defining characteristic of U.S. securities regulation. Issuers selling securities in a public offering must file a registration statement with the SEC containing detailed disclosures, and thereafter comply with the periodic disclosure regime. This regime has been highly controversial among legal academics. Some scholars ar...
Prepared for a Stanford Law Review symposium, this essay comments on an article by Harvard Professors Bebchuk, Coates, and Subramanian; namely, Lucian Ayre Bebchuk et al., The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy, 54 STAN. L. REV. (forthcoming). Bebchuk, Coates, and Subramanian's data demonstrate that (1) th...
In corporate law scholarship, two basic models long have competed: managerialism and shareholder primacy. Managerialist theories treat the corporation as a bureaucratic hierarchy dominated by professional managers. Shareholder primacy theory formerly argued that shareholders own the corporation and, accordingly, directors and officers are mere stew...
In the 1980s, many corporations adopted disparate voting rights plans (also known as dual class stock plans) to concentrate voting control in the hands of incumbent managers and their allies. At most adopting firms, such plans were intended mainly to deter unsolicited takeover bids. Incumbent managers who cannot be outvoted, after all, cannot be ou...
Nonshareholder constituency statutes permit directors to consider the effects of their decisions on a variety of nonshareholder interests, such as employees, customers, suppliers, and local communities. Although highly controversial within the corporate law academy, such statutes are on the books in well over half the states and are likely to remai...
In any negotiated corporate acquisition, there is a substantial risk that the deal will not be consummated. Changes in the business environment occasionally may lead the target board to renege. Another party may approach the target board with an alternative, presumably higher-priced, acquisition proposal; indeed, target management might initiate ne...
Under the New York Stock Exchange's (NYSE) aegis, a blue ribbon panel has proposed new listing standards that would, inter alia, significantly increase the role of independent directors in public corporations. Despite the considerable hullabaloo surrounding the report's release, however, the report's recommendations in fact consist of little more t...
Prepared for a conference on faith-based investing practices, this essay critiques Catholic social teaching on corporate social responsibility. Specifically, the essay focuses on one of the policy recommendations made by the U.S. Bishops in their pastoral letter on economic justice, Economic Justice for All: Pastoral Letter on Catholic Social Teach...
Prepared for a symposium on teaching corporate law, this essay is an exercise in applied theory of the firm. The essay focuses on a well-known California Supreme Court partnership law decision, Kovacik v. Reed, which deals with the allocation of capital losses in a dissolving partnership in which one of the partners contributed only capital and the...
This essay, "In Defense of the Shareholder Wealth Maximization Norm, appeared in the Symposium on New Directions in Corporate Law published in volume 50 of the Washington & Lee Law Review. This essay was written as a reply to an article in the same symposium by Professor Ronald M. Green - "Shareholders as Stakeholders: Changing Metaphors of Corpora...
The prohibition of insider trading in U.S. federal securities law typically is justified on fairness or equity grounds. Predictably, these arguments have had little traction in the law and economics community. At the same time, however, law and economics scholars have not coalesced around a single view of the prohibition; instead, competing economi...
On repeated occasions in the post-war period, the cumulative effects of policy mistakes, recessions, inflation, and other economic problems have made it difficult for sovereign debtors to service their external debt. Unlike a domestic U.S. private debtor, who may resort to formal bankruptcy procedures in the event of insolvency, a defaulting sovere...
Congress intended that the Insider Trading Sanctions Act of 1984 should increase the deterrent effect of the insider trading prohibition without changing the substantive common law governing insider trading cases. Towards that end, the Act created a civil penalty of up to three times the profit gained, or loss avoided, through trading while in poss...
Following the Supreme Court's decision in Edgar v. MITE Corp., striking down portions of Illinois' takeover laws, a number of commentators predicted that state efforts to regulate takeovers could no longer be successful. However, a number of states have adopted new laws in the wake of MITE, seeking to provide a continuing role for the states in the...
Any model of corporate governance must answer two basic sets of questions: (1) Who decides? In other words, when push comes to shove, who has ultimate control? (2) Whose interests prevail? When the ultimate decisionmaker is presented with a zero sum game, in which it must prefer the interests of one constituency class over those of all others, whos...
In corporate law scholarship, two basic models have long competed: managerialism and shareholder primacy. Managerialist theories treat the corporation as a bureaucratic hierarchy dominated by professional managers. Shareholder primacy theory formerly argued that shareholders own the corporation and, accordingly, directors and officers are mere stew...
Although the question of whether international corporate governance is converging on the U.S. model remains contested, there is general agreement as to the nature of that U.S. model. Specifically, virtually all participants in the convergence debate assume that U.S. corporate law is based on a norm of shareholder primacy. This assumption is wrong....
The default statutory model of corporate governance contemplates not a single hierarch but rather a multimember body that acts collegially. Why? This Article reviews evidence that group decisionmaking is often preferable to that of individuals, focusing on evidence that groups are particularly likely to be more effective decisionmakers in settings...
In his important book, STRONG MANAGERS, WEAK OWNERS, Professor Mark Roe questioned whether Berle and Means were correct in assuming that the separation of ownership and control is an inherent aspect of large public corporations. Roe contends that dispersed ownership was not the inevitable consequence of impersonal economic forces, but rather the re...
In a 1992 colloquy held in the pages of the Business Lawyer, Professors Louis Loss and Elliott Weiss debated the scope of liability under section 12(2) of the Securities Act of 1933. Following the United States Supreme Court's decision in Gustafson vs. Alloyd Co., the Business Lawyer invited Professor Stephen Bainbridge to substitute for Professor...
This article argues that the colloquial understanding of path dependence offers a heuristically powerful metaphor for grappling with the problem of regulating insider trading. The metaphor focuses attention on the proper issues-how did the law arrive at its present form, what paths are available for the future, which of those paths are feasible, an...
The default statutory model of corporate governance contemplates not a single hierarch but rather a multi-member body that acts collegially. Why? This article reviews evidence that group decisionmaking is often preferable to that of individuals, focusing on evidence that groups are particularly likely to be more effective decisionmakers in settings...
Insider trading likely is one of the most common forms of securities fraud, yet it remains one of the most controversial aspects of securities regulation among legal (and economic) scholars. This paper provides a comprehensive overview of both the law of insider trading and the contested economic analysis thereof. The paper adopts a historical appr...
This essay is nominally a review of Progressive Corporate Law (Lawrence E. Mitchell ed. 1995). However, it uses the book principally as a jumping off point for a critique of the strain of left communitarianism that has recently emerged in corporate law scholarship. The essay begins with a review of left communitarian critique of the nexus of contra...
American industrial enterprises long were organized as rigid hierarchies in which production-level employees had little discretion or decision making authority. Recently, however, many firms have adopted participatory management programs purporting to give workers a substantially greater degree of input into corporate decisions. Despite the democra...
Prepared for my text Corporation Law and Economics (Foundation Press forthcoming 2002), this article briefly summarizes the salient characteristics of limited liability companies. Using a transaction cost economics framework, the article explains how structuring a business as a LLC can create value. The article discusses taxation of LLCs, their org...
Judicial opinions in securities fraud class actions frequently do not conform to standard theories of adjudication. Instead of the complex modes of legal reasoning predicted by standard models, decisions in this area commonly rely on rules of thumb - decisionmaking heuristics or shortcuts. To the extent prior literature has focused on the use of de...
Prepared for a conference and text on Slovenian corporate governance, this article examines the corporate governance role of the large institutional investors that dominate the stockownership of privatized Slovenian corporations. In contrast to the U.S. model in which ownership and control is separated, stockownership is widely dispersed, and share...
Citations
... 16 Third, unsophisticated dispersed shareholders tend to rely on proxy advisory firms for their voting decisions. To minimize their own costs, proxy advisors tend to be more inclined to promote a "one-size-fits-all" model when issuing voting recommendations, which may have a negative impact on firm value (Bainbridge 2010;Ferri and Maber 2013). ...
... The role of professional managers is extended in corporate governance against owners for managing complexities. The theory opposes conflicts of interests and empowering corporate control for maximizing corporate profit (Bainbridge & Todd Henderson, 2018). These two theoretical perspectives are particularly important for the Kuwaiti economy in-terms of the new CG requirements and its use for enhancing FDI. ...
... 5 The term "enterprise liability" is not universally agreed upon. Some legal scholars (e.g., Bainbridge & Henderson, 2016) use this term to refer only to the case when sister companies are held liable (a "horizontal" form of liability, or veil piercing), thus distinguishing that notion from the traditional or "vertical" notion of liability involving a company and its owners. Here, however, we follow the majority of commentators and use the term "enterprise liability" to encompass both notions of liability (horizontal and vertical) in the context of corporate groups. ...
... 360, 365). 16 There is no guarantee that a regulator should know the efficient equilibrium better than an even distorted market (Bainbridge 2000Bainbridge , pp. 1023Bainbridge , 1056). Hence, it is very probable that a totally public controlled market may lead to inefficiencies than markets, which suffer from irrational behaviour. ...
... US companies' corporate governance guidelines typically state that it is standard procedure to allow directors sufficient time to review board meeting agendas. Court rulings have also recognized the importance of providing board meeting agendas in advance: mangers have been criticized for not notifying outside directors of meeting agendas (Bainbridge 2002), and boards' decisions to remove the CEO have been overturned because the CEO, as a director, was not notified that there would be a vote to replace him or her (Laster and Zeberkiewicz 2015). Moreover, our discussions with corporate board members confirm that board meeting materials are sent out in advance, increasingly through electronic board portals (e.g., BoardWorks, Diligent, Directors Desk). ...
... We also argue that to the extent board members accumulate expert knowledge in making acquisitions in the target industry during their past employment as insiders in the same industry; such acquisition experience will be captured by our measure of industry experience. Bainbridge (2003) documents that a board acts as a body and not as individual members, and Cai et al. (2017) find that connected boards facilitate cooperation and coordination, which are particularly valuable in complex situations. Chan et al. (2017) document that firms with a stronger board interlocking network are more likely to reduce information asymmetry. ...
... Effective board decision-making is thought to be central to the control of management self-interest (Fama & Jensen, 1983;Useem & Zelleke, 2006) as well as ensuring an effective strategy is put in place (Bailey & Peck, 2013;Rindova, 1999), and reflects the legal, group- based nature of boardroom power (Bainbridge, 2002). In essence, boards need to effectively prepare, discuss and judge information (Bailey & Peck, 2013;Brennan, Kirwan & Redmond, 2016) if they are to monitor, advise and strategize well (Hillman & Dalziel, 2003;Hillman, Nicholson & Shropshire, 2008;Pugliese, Bezemer, Zattoni, Huse et al., 2009). ...
... Further, the BoD can pressure the management to identify and remedy the deficiencies in the internal control environment. The two acts, mentioned above, are aimed at protecting investors and have further empowered the BoDs (Bainbridge, 2012) clearly supporting the view that the directors can be instrumental in controlling fraud. ...
... UK shareholders can nominate own directors by a simple majority vote and can pass binding resolutions (Filatotchev and Dotsenko 2015). See also Bainbridge (2006) for a review of limited shareholder voting rights in the US. 13 Ertimur et al. (2011) find that only 7.4% of shareholder proposals that link pay to performance were fully or partially implemented. 14 This vote has been long required under the anti-dilution requirements of the Companies Act, as well as by more recent regulation including Section 9.4 of the London Stock Exchange Listing Rules and Section D.2.4 of the FRC's Corporate Governance Code (Gregory-Smith and Main 2013). ...
Reference: Pay Regulation – Is More Better?
... British law provides for "corporate" directors, in which a company is the director, which then nominates a representative to take part in board meetings. Some scholars have made an argument for such arrangements in US law(Bainbridge & Henderson 2014).Content courtesy of Springer Nature, terms of use apply. Rights reserved. ...
