Addressing the Short-Termer Problem in Corporate Governance

Continuing our faculty workshop series, Nadelle Grossman presented a work in progress earlier this week entitled “Clarifying the Long-Term Nature of Director and Shareholder Fiduciary Duties.”  Her presentation examined the various factors that have magnified the influence of short-term institutional shareholders, such as hedge funds and activist investors, over the decisions of corporate management.  These factors include the way the market punishes firms that fail to meet their quarterly earnings targets, the incentives of money managers to maximize their own fees by boosting the share price of their holdings, and the increasing effectiveness of the shareholder franchise.  Professor Grossman argued that the increasing influence of the “short-termers” has impaired management’s ability to set a long-term strategy for the corporation.  Her thesis is that the fiduciary duties of directors and institutional shareholders should be re-examined in order to promote the adoption of business strategies with longer time frames.

Continue ReadingAddressing the Short-Termer Problem in Corporate Governance

Me and the Man

I just got back from Florida State, where I presented a paper at a faculty workshop.  (Many thanks to Professor and PrawfsBlawger Dan Markel for being a terrific host.)  In the paper, I propose a new type of specialized drug court built around restorative justice principles.  (The paper is not on SSRN yet, but look for it soon.)  The FSU folks had a lot of helpful comments and questions.  In one of the more interesting exchanges, my interlocutor raised a concern that restorative justice, with its focus on personal accountability, would detract from a broader social justice agenda, drawing attention away from the structural inequalities in society that contribute to the prevalence of crime in low-income communities.  It’s a fair point, although I think my proposed RJ program, which would draw lay community representatives into conferences with drug offenders, is capable of contributing to the sort of community mobilization and political activism that my interlocutor favors.  In any event, I was a bit surpised to find myself defending RJ from a social justice challenge.  RJ proponents sometimes present themselves as the vanguard of a revolutionary social movement.  How ironic, then, that when I first advocate an RJ solution to an important social problem, it is suggested that I am really acting as (to use Chad Oldfather’s phrase) “Agent of the Man”!

Continue ReadingMe and the Man

Tafas and the Future of Patent Administrative Law

My colleague Kali Murray has a new working paper on SSRN, First Things, First: A Principled Approach to Patent Administrative Law. Kali analyzes a controversial recent decision from the Eastern District of Virginia in Tafas v. Dudas. In the Tafas decision, currently on appeal in the Federal Circuit, the lower court rejected new rules adopted by the U.S. Patent and Trademark Office that limit the ability of patent applicants to file continuation applications. As Kali demonstrates, Tafas opens up deep questions about the extent to which the PTO is subject to normal principles of administrative law. Kali thinks it is indeed time to engage in a fundamental reconsideration of the relationship between patent law and administrative law. Her paper concludes with some helpful suggested principles to guide such a reconsideration.

Continue ReadingTafas and the Future of Patent Administrative Law