We provide a general framework for analyzing shareholder rights in control transactions. When dispersed shareholders have only their statutory rights to vote on the transaction and to appraisal, their inability to make counteroffers leaves them vulnerable to low-ball offers. We show that...

Two proposed bills barring public pensions from considering environmental, social, and governance investment criteria create massive legal risk for any pension fiduciary or service provider. The American Legislative Exchange Council “boycott bill” and the “fiduciary duty” bill, if...

Many observers, including at least one associate justice of the United States Supreme Court, seem to believe there’s just one big question about the legality of higher education’s multi-billion dollar revenue sport business model. That’s the business model that lets schools take...

Gil–Bazo and Ruiz–Verdú (2009) show that fund families strategically exploit the low performance sensitivity of investors, i.e., investors’ low elasticity of demand with respect to performance, to increase fund fees. Given that environmentally, socially and governance (ESG) focused...

At the heart of corporate governance are fundamental doctrines that limit court scrutiny of fiduciary and stockholder decisions: the business judgment rule limits scrutiny of informed director decisions and, as with Corwin cleansing, informed voting by “disinterested” shareholders is...

I examine whether the imposition of fiduciary duty on municipal advisors affects bond yields and advising fees. Using a difference-in-differences analysis, I show that bond yields reduce by 9% after the imposition of the SEC Municipal Advisor Rule. Larger municipalities are more likely to...

The board’s fiduciary duties are the bedrock of corporate law. Bankruptcy trustees also owe fiduciary duties to the “bankruptcy estate.” But corporations in bankruptcy rarely worry about fiduciary duties, even those corporations in chapter 11 reorganization cases, where the company is...

After decades of corporate leadership based on shareholder wealth maximization, momentum is now gathering behind a shift towards the recognition of stakeholder interests. However, from voluntary actions by business to changes in soft and hard law, the steps taken thus far have been insufficient...

Despite the omnipresence of the fiduciary in business organisations, there is an omission of theorisations of this legal concept within business ethics literature. This is surprising considering its widespread and embedded use, but even more so given that the presence of ethics within the...

The principle known as the ‘the rule in Hastings-Bass’ that has developed in first instance courts in England since 2000 is mistaken. Stating, as it does, a short list of conditions for when equity will interfere with a fiduciary's decision is not consistent with equity's conceptual...

For many people, a pension fund represents a crucial source of financial security in their retirement years. But have you ever stopped to consider who is responsible for managing these funds and ensuring they are safeguarded for future generations? In Zimbabwe, pension fund trustees play a...

The Digital Age is speedily transforming into the Algorithmic Age, where algorithms carry on or contribute to a significant number of important social, economic, and technical decision-making. Apart from platform dominance, private governance, and surveillance capitalism, private and public use...

We investigate the effect of fiduciary duty of loyalty on corporate culture measured by a novel machine learning approach. We apply a difference-in-differences method exploiting the staggered adoption of the Corporate Opportunity Waiver (COW) law in the U.S. states as an exogenous decline in the...

A recurrent theme in corporate law is the presence of directors and officers owing fiduciary duties of care and loyalty to the respective companies they serve. Although not as visible in the securities law setting, concepts of fiduciary duty-like obligations arise with some frequency. While the...

Shortly after the first financial crisis of globalization (2008-2009), a number of changes started to dominate the financial and banking world. Households and companies were confronted with a series of new rules and procedures aimed at protecting both the banks and the public. In most cases they...

This paper studies the interactions between corporate law and VC exits by acquisitions, an increasingly common source of VC-related litigation. We find that transactions by VC funds under liquidity pressure are characterized by (i) a substantially lower sale price; (ii) a greater probability of...

Does enhanced legal accountability of non-director executives improve workplace safety? We exploit an exogenous increase in executive legal accountability triggered by Delaware Supreme Court’s 2009 “Gantler ruling” to address this question. In a difference-in-differences framework, we show...

As the benefits of gender equality for governance become more apparent,boardroom diversity initiatives abound. At the same time, institutionalinvestors play an increasingly central role in the corporate world. ThisArticle takes a novel approach to achieve this necessary change.Institutional...

Technology companies such as Facebook have long been criticized for abusing customers’ personal information and monetizing user data in a manner contrary to customer expectations. Some commentators suggest fiduciary law could be used to restrict how these companies use their customers’ data....

This paper seeks to deepen our understanding of fiduciary loyalty by focusing on the role of constraints on that loyalty. In the process, it seeks to elaborate on loyalty obligations more generally. As described here, constraints on a loyalty obligation that are implications of that loyalty...

Acting as prudent investors, pension managers should consider financially material factors that affect the risk/return profile of funds. Material environmental, social, and governance (ESG) factors may affect financial performance by identifying opportunities and risk, so it would seem prudent...

Directors have a fiduciary duty of loyalty towards a company. This duty is codified in Section 166(2) of the (Indian) Companies Act, 2013. Our Company Law adopts a stakeholder approach to the directors’ duty of loyalty. Under Section 166(2), a director is required to act in the best interests...

Asset manager signatories of the Net Zero Asset Manager Initiative, part of the Glasgow Financial Alliance for Net Zero, have committed to investing in line with the Race to Zero goal of limiting global warming to 1.5oC with limited or no overshoot. Given that a recent report from United Nations...

We examine the drivers of variable annuity sales and the impact of a proposed regulatory change. Variable annuities are popular retirement products with over $2 trillion in assets in the United States. Insurers typically pay brokers a commission for selling variable annuities that ranges from 0%...

The aim of the chapter is twofold. On the one hand, it explores the main features of theSustainable Finance Disclosure Regulation. On the other hand, it tries to assesswhether the Sustainable Finance Disclosure Regulation is likely to succeed inharmonising sustainability-related (i) disclosure...

Parents resemble trustees, conservators, and other fiduciaries; they exercise broad discretion while making choices for vulnerable people. Like other fiduciaries, parents can be tempted to neglect their duties or pursue self-interest at the expense of those they should protect. Based on these...

In 2006, the Japanese law of nonprofits underwent a major reform. Notably, the reform involved a shift in the governance mechanism from external governmental oversight to a structure that emphasizes internal fiduciary governance. As the Japanese law in this area has historically been marked by...

This note identifies six differences between trustees and company directors: the absence of a separate legal personality of the trust, the different rights of creditors, the different obligations owed, different rights to information, different powers of removal and, especially, the different...

User agents are pieces of software that represent the user, a natural person, in their digital interactions. Examples include Web browsers, operating systems, single-sign-on systems, or voice assistants. User agents hold, due to the role they play in the digital ecosystem, a strategic position....

Perceived failures by the UN Security Council have been characterized as a ‘betrayal of trust’, which threatens to impact in turn on the strength of the Council’s authority. In certain legal cultures, fiduciary law has been recognized as an effective legal mechanism to underwrite trust in...

This paper is a pre-print version of the Introduction to Ernest Lim's A Case for Shareholders' Fiduciary Duties in Common Law Asia published by Cambridge University Press in 2019, which was awarded the Society of Legal Scholars Peter Birks Runner-up Prize for Outstanding Legal Scholarship. This...

In 1975, the year following ERISA's enactment, the Department of Labor issued two interpretative bulletins and a regulation on the definition of "fiduciary." This collective guidance was designed to address employer and investment communities' concerns about who was a fiduciary and what...

This chapter, prepared for the 2021 Annual Heckerling Institute on Estate Planning, examines the law and economics of environmental, social, and governance (ESG) investing by a trustee. Trustees of pensions, charities, and personal trusts invest tens of trillions of dollars of other people’s...

Please find attached the slides I presented at the George A. Leet Symposium on Nov. 6, 2020. I am going to be revising my white paper, "The Conflict between Blackrock's Shareholder Activism and ERISA's Fiduciary Duties" based on these slides. This revised version will then be published in the...