Hedge fund activism is an expression of shareholder primacy, an idea that has come to dominate discussion of corporate governance theory and practice worldwide over the past two decades. This book ...provides a thorough examination of public and often confrontational hedge fund activism in Japan in the period between 2001 and the full onset of the global financial crisis in 2008. In Japan this shareholder-centric conception of the company espoused by activist hedge funds clashed with the alternative Japanese conception of the company as an enduring organisation or a 'community'. By analysing this clash, the book derives a fresh view of the practices underpinning corporate governance in Japan and offers suggestions regarding the validity of the shareholder primacy ideas currently at the heart of US and UK beliefs about the purpose of the firm.
In The Diplomat in the Corner Office, Timothy L. Fort, one of the founders of the business and peace movement, reflects on the progress of the movement over the past 15 years—from a niche position ...into a mainstream economic and international relations perspective. In the 21st century global business environment, says Fort, businesses can and should play a central role in peace-building, and he demonstrates that it is to companies' strategic advantage to do so.Anchoring his arguments in theories from economics and international relations, Fort makes the case that businesses must augment familiar notions of corporate responsibility and ethical behavior with the concept of corporate foreign policy in order to thrive in today's world. He presents a series of case studies focusing on companies that have made peace a goal, either as an end in itself or because of its instrumental value in building their companies, to articulate three different approaches that businesses can use to quell international conflict— peace making, peace keeping, and peace building. He then demonstrates their effectiveness and proposes policies that can be utilized by business, civil society, and government to increase the likelihood of business playing a constructive role in the conciliatory process.This book will be of enormous use not only to students and scholars but also to leaders in NGOs, government, and business.
Policies targeting individual companies for economic development incentives, such as tax holidays and abatements, are generally seen as inefficient, economically costly, and distortionary. Despite ...this evidence, politicians still choose to use these policies to claim credit for attracting investment. Thus, while fiscal incentives are economically inefficient, they pose an effective pandering strategy for politicians. Using original surveys of voters in the United States, Canada and the United Kingdom as well as data on incentive use by politicians in the US, Vietnam and Russia, this book provides compelling evidence for the use of fiscal incentives for political gain and shows how such pandering appears to be associated with growing economic inequality.
Advertising at War challenges the notion that advertising disappeared as a political issue in the United States in 1938 with the passage of the Wheeler-Lea Amendment to the Federal Trade Commission ...Act, the result of more than a decade of campaigning to regulate the advertising industry. Inger L. Stole suggests that the war experience, even more than the legislative battles of the 1930s, defined the role of advertising in U.S. postwar political economy and the nation's cultural firmament. She argues that Washington and Madison Avenue were soon working in tandem with the creation of the Advertising Council in 1942, a joint effort established by the Office of War Information, the Association of National Advertisers, and the American Association of Advertising Agencies._x000B__x000B_Using archival sources, newspapers accounts, and trade publications, Stole demonstrates that the war elevated and magnified the seeming contradictions of advertising and allowed critics of these practices one final opportunity to corral and regulate the institution of advertising. Exploring how New Dealers and consumer advocates such as the Consumers Union battled the advertising industry, Advertising at War traces the debate over two basic policy questions: whether advertising should continue to be a tax-deductible business expense during the war, and whether the government should require effective standards and labeling for consumer products, which would render most advertising irrelevant. Ultimately the postwar climate of political intolerance and reverence for free enterprise quashed critical investigations into the advertising industry. While advertising could be criticized or lampooned, the institution itself became inviolable._x000B_
Corporate social responsibility (CSR) embodies a complete code of managing businesses in a sustainable and ethical manner. It is also considered to be one of the first initiatives to promote ...sustainable development. Corporate social responsibility and sustainable education and research
have been instrumental in proliferating relevant knowledge and values in a society. In this article, we explored the current state of research pertaining to corporate social responsibility and sustainability undertaken in Chinese universities. We focused on peer reviewed research articles
published by the faculty associated with universities in China. A literature review of 430 articles published in leading journals between 2000 and 2014 revealed 25 research studies dealing particularly with CSR in China. We aimed at finding, using meta-analysis techniques, the frequency, methodologies,
industry focus, main findings and the overall impact on corporate social responsibility scholarship of the research published. We found that there was a notable increase in the corporate social responsibility articles written by Chinese university researchers during the past five years. Most
of the articles employed an empirical research methodology to study corporate social responsibility in various sectors. There were no comparative studies found between China and other countries that may perform better in corporate social responsibility; such studies could provide insights
for China's corporate social responsibility development. We concluded that researchers affiliated with the national key universities in China contributed a large number of articles.
Miller v. HCP & Co. (Choice of LLC as an Investment Vehicle May Be Used to Eliminate Director Liability in Connection with a Sales Process) Summary In this case, the Delaware Court of Chancery ...dismissed a suit brought by Christopher Miller ("Miller"),67 the co-founder of Trumpet Search, LLC ("Trumpet"), and the trustees of the C&L Miller Revocable Trust, claiming that Trumpet's controlling member, HCP & Company, a private equity firm (together with its affiliates, "HCP"),68 and Trumpet's board breached the implied covenant of good faith and fair dealing by selling Trumpet through a private sales process, resulting in significant return on HCP's own investment but failing to provide consideration for Trumpet's minority members.69 The court rejected the plaintiffs' argument that HCP breached the implied covenant by failing to conduct an open-market sale process to ensure that Trumpet's minority members received maximum value for their interests.70 Background In 2008, Miller founded Trumpet, a Delaware limited liability company, which offers clinical services to persons, specifically children, with autism and developmental disabilities.71 In 2014, HCP purchased the majority of Trumpet's existing Class D interests, making HCP the largest holder of the company's equity.72 In 2016, the members entered into a Second Amended and Restated Operating Agreement (the "OA"), which created a new class of Class E membership interests.73 The OA created a waterfall distributing returns on members' capital investments upon the event of "a sale or otherwise. Assocs., Inc. (Fiduciary Duties in the Context of a Financing Round and a Controlling Venture Capital Fund's Portfolio Optimization) Summary In this case,102 the Delaware Court of Chancery declined to dismiss a stockholder's challenges to (1) a financing round in which New Enterprise Associates, Inc. ("NEA") became a controlling stockholder (the "Financing Claim") and (2) a subsequent transaction pursuant to which a third party, Abbott Laboratories ("Abbott"), purchased a warrant to acquire the company (the "Warrant Claim").103 With respect to the Financing Claim, the court applied the entire fairness standard because four of the six directors were interested in the transaction due to their participation directly, or through an affiliate, in the financing.104 With respect to the Warrant Claim, the court also applied the entire fairness standard given that NEA allegedly engaged in "portfolio optimization" by causing the company to sell the warrant to Abbott on the cheap in order to incentivize Abbott to engage in transactions with two other NEA portfolio companies.105 Background Advanced Cardiac Therapeutics, Inc. ("ACT"), a privately held Delaware corporation, is a pre-commercial medical device company.106 Plaintiff Kenneth Carr is an inventor and co-founder of ACT and originally held 30 percent of ACT's common stock.107 Carr's holdings were diluted in a series of preferred stock financings.108 In January 2014, during the first round of such financings, NEA, a venture capital fund, obtained Series A-1 preferred stock of ACT.109 Along with a minority position in ACT, NEA acquired the right to elect two directors to the company's board of directors.110 During the relevant period in 2014, the board consisted of six directors, including the following: (i) Peter Justin Klein, an NEA partner who served on the boards of numerous NEA portfolio companies, including Topera and VytronUS; (ii) Michael Pederson, CEO of VytronUS; (iii) Roy Tanaka, a director of VytronUS; (iv) Duke Rohlen, CEO of ACT and CEO of Ajax Vascular, an NEA portfolio company; (v) William Olson, former CEO of ACT and a party to a consulting agreement with ACT; and (vi) Aris Constantinides, a venture capital partner of the private equity arm of the National Bank of Greece, the majority holder of the Series A-1 preferred stock of ACT (collectively, the "Director Defendants").111 In April 2014, the ACT board of directors (the "ACT Board")-composed of the six Director Defendants-signed a written consent providing for the issuance of 265,780,730 shares of Series A-2 preferred stock (the "Series A-2 Financing").112 This issuance placed a pre-money valuation on ACT of approximately $15 million.113 NEA purchased nearly 90 percent of the Series A-2 preferred stock, which, combined with its previously acquired equity holdings, resulted in NEA obtaining more than 65 percent of ACT's voting power, resulting in NEA becoming ACT's controlling stockholder.114 The Series A-2 preferred stock was not offered to certain stockholders-including Carr-who previously invested in ACT but was offered to Rohlen, Pederson, and the National Bank of Greece (i.e., Constantinides).115 In connection with the Series A-2 Financing, a new Amended and Restated Voting Agreement was entered into among certain ACT stockholders that provided drag-along rights permitting the holders of a majority of ACT's preferred stock (i.e., NEA) to cause other stockholders to vote in favor of a sale of ACT.116 Approximately three months later, in July 2014, ACT received two acquisition proposals: a proposal from Abbott (the "Abbott Proposal") and a proposal from Medtronic, Inc. (the "Medtronic Proposal").117 The Abbott Proposal, dated July 12, 2014, contemplated a warrant to purchase ACT for $25 million (the "Warrant") with a $75 million exercise price and up to $85 million in potential milestone payments, for total consideration up to $185 million.118 The Abbott Proposal was conditioned on the completion of Abbott's purchase of Topera and financing of VytronUS.119 The Medtronic Proposal, dated July 25, 2014, contemplated an option to purchase ACT for $35 million with a $100 million exercise price and milestone payments that could bring the total consideration up to $300 million.120 The Medtronic Proposal was not conditioned on Medtronic's purchase or financing of any other entity.121 In October 2014, the ACT Board approved the Abbott Proposal but did not submit it to a full stockholder vote.122 The Warrant effectively locked up ACT for a potential purchase by Abbot until March 2017.123 As a result of the "three-headed deal" between Abbott and the NEA portfolio companies, Abbott paid NEA $250 million to acquire Topera and invested $31 million in VytronUS.124 Ultimately, Abbott did not exercise the Warrant and, due in part to federal regulations, sold the Warrant back to ACT for $25 million in October 20 1 6.125 Carr thereafter filed a complaint asserting that the Series A-2 Financing impermissibly diluted ACT stockholders and allowed NEA to gain control of ACT for less than fair value, and that NEA used its control to sell the Warrant to Abbott at an unreasonably low price to facilitate the Topera and VytronUS transactions for NEA's benefit.126 Analysis The Financing Claim. The parties advanced drastically different interpreta tions of a requirement that the stockholders elect the current CEO as a director of the company and the court was required to look beyond the language of the requirement to determine the parties' intent. 6.Wilson v. Alharayeri (Personal Liability of Directors Under Oppression Remedy) Summary The Supreme Court of Canada recently clarified when personal liability can be imposed on a Canadian corporation's directors under the statutory oppression remedy.163 The oppression remedy is a creature of statute in U.K. Commonwealth jurisdictions164 designed to remedy a situation in which a stakeholder's "reasonable expectations" are breached by conduct that amounts to "oppression," "unfair prejudice," or "unfair disregard,"165 even if the conduct is otherwise legal.166 Background Alharayeri was the CEO of a small Canadian public company from 2005 to 2007.167 In early 2007, as part of ultimately failed negotiations with a potential merger partner, Alharayeri privately agreed to sell some of his common shares in the company to the potential merger partner.168 Upon learning of the share sale, the board reprimanded Alharayeri for concealing it.169 Alharayeri subsequently stepped down as CEO but remained a significant minority shareholder, holding both common shares and two classes of performance-conditioned convertible preference shares.170 A third class of performance-conditioned convertible preference shares were held by a director and two other shareholders.171 Facing increasing liquidity concerns, the board undertook a dilutive financing available only to existing holders of common shares.172 Prior to the financing, the director's preference shares were accelerated and converted notwithstanding doubts as to whether the performance conditions had been satisfied.173 Alharayeri's preference shares were not converted even though there was evidence that those conditions had been satisfied.174 The financing substantially diluted the proportion of common shares held by shareholders, such as Alharayeri, who did not participate.175 Alharayeri subsequently applied under the oppression remedy provisions (s. 241) of the Canada Business Corporations Act against four company directors, including the two members of the audit committee, one of whom was the holder of the converted shares.176 Alharayeri was successful at trial and on appeal against the two members of the audit committee.177 Analysis On appeal to the Supreme Court of Canada, the court rejected a limited approach for finding director liability under the oppression remedy, instead setting out a two-part test: (1) whether oppressive conduct can be attributable to the directors by virtue of their exercising-or failing to exercise-their powers so as to effect the conduct; and (2) whether imposition of personal liability is fit in the circumstances.178 The court also provided guidance for determining a "fit" remedy. ...the remedy must be a fair way of addressing the situation in light of the circumstances of the case.179 The court noted that the presence of personal benefit and bad faith are hallmarks of conduct
In this book, Horace Bartilow develops a theory of embedded corporatism to explain the U.S. government's war on drugs. Stemming from President Richard Nixon's 1971 call for an international approach ...to this war, U.S. drug enforcement policy has persisted with few changes to the present day, despite widespread criticism of its effectiveness and of its unequal effects on hundreds of millions of people across the Americas. While researchers consistently emphasize the role of race in U.S. drug enforcement, Bartilow's empirical analysis highlights the class dimension of the drug war and the immense power that American corporations wield within the regime.
Drawing on qualitative case study methods, declassified U.S. government documents, and advanced econometric estimators that analyze cross-national data, Bartilow demonstrates how corporate power is projected and embedded—in lobbying, financing of federal elections, funding of policy think tanks, and interlocks with the federal government and the military. Embedded corporatism, he explains, creates the conditions by which interests of state and nonstate members of the regime converge to promote capital accumulation. The subsequent human rights repression, illiberal democratic governments, antiworker practices, and widening income inequality throughout the Americas, Bartilow argues, are the pathological policy outcomes of embedded corporatism in drug enforcement.
The ever tighter linking of our food, water, and energy systems in the context of a changing climate is leading to increasing turbulence in the world. As a consequence, it becomes ever more crucial ...to develop cities, regions, and economies with resilience in mind. Because of multinational corporations’ global reach, substantial resources, and information-driven leadership structures, these entities can play a major, constructive role in improving our understanding and design of resilient systems.
This volume is the product of the Resilience Action Initiative, a collaboration among Dow, DuPont, IBM, McKinsey, Shell, Siemens, Swiss Re, Unilever, and Yara designed to explore possible corporate contributions to global resilience, especially at the nexus of water, food, and energy. Aggressively forward-thinking and consistent with an enlightened self-interest, the ideas considered here represent a corporate perspective on the broad collaborations required for a more resilient world.
Although American and Canadian corporate law share many similarities, they are also marked by important institutional differences. Among the most notable are the differing roles of federal versus ...state/provincial policymaking in the two countries: while American corporate law has been deeply influenced by jurisdictional competition among the states, Canadian law has instead been shaped by federal legislative activity, as seen today in the standardizing influence of the Canada Business Corporations Act. These different institutional histories have led to distinct evolutionary paths, with important substantive consequences for contemporary corporate law.
Despite considerable academic attention to the subject of corporate law federalism, these historical differences between Canada and the United States are not well understood. This article explains why jurisdictional competition arose in the United States but not Canada by examining the “Great Merger Movement” of the late nineteenth and early twentieth centuries. Specifically, this article makes three related arguments: (1) in the United States, the rise of jurisdictional competition was driven not by corporate governance issues, as is often assumed, but rather by the desire to avoid state and federal antitrust restrictions; (2) for a variety of reasons, cartelization and price fixing were more viable in Canada than the United States, delaying the onset of consolidative mergers; and (3) when the Canadian merger movement finally arrived, Canadian federal company law readily facilitated industrial consolidation, reducing the incentives for individual provinces to compete to attract company charters.
The different experiences of Canada and the United States reveal an intriguing historical irony—while Canadian corporate law is sometimes criticized as lacking in competitive responsiveness, the roots of this complacency are closely tied to the turn-of-the-century merger movement, in which Canadian law was less restrictive than its traditional American counterpart.
The ever tighter coupling of our food, water and energy systems, in the context of a changing climate is leading to increasing turbulence in the world. As a consequence, it becomes ever more crucial ...to develop cities, regions, and economies with resilience in mind. Because of their global reach, substantial resources, and information-driven leadership structures, multinational corporations can play a major, constructive role in improving our understanding and design of resilient systems. This volume is the product of the Resilience Action Initiative, a collaboration among Dow, DuPont, IBM, McKinsey en Co., Shell, Siemens, Swiss Re, Unilever, and Yara designed to explore possible corporate contributions to global resilience, especially at the nexus of water, food and energy. Aggressively forward-thinking, and consistent with an enlightened self-interest, the ideas considered here represent a corporate perspective on the broad collaborations required for a more resilient world.
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