A Radical Tilt at Generous Failures

By Morgan Sebastian Law, PC for the Financial Times – a review of Firm Commitment: Why the corporation is failing us and how to restore trust in it by Colin Mayer. It would not be difficult to reach agreement on the proposition that the regulatory response to the financial crisis has been inadequate. Few, on the other hand, would go as far as Colin Mayer, Professor of Management Studies at Oxford’s Saïd Business School, in suggesting that it is wrong-headed from top to bottom and that the Anglo-Saxon capital market model of governance is little short of a catastrophe. Yet in his latest book Mr Mayer puts his finger on so many serious flaws in the way the US and UK systems work that he deserves a hearing. His starting…
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Teaching Ethics and Investing Ethically

It's long been a dirty secret in the university world that they don't necessarily practice what they preach. Prestigious (and expensive) universities that teach governance and ethics don't necessarily use the principles they teach when investing for endowments. The same is true for environmental issues — a hot topic on campus for several years now. As Michael McDonald reported in Bloomberg yesterday, "While universities lead when it comes to comprehending climate change, teaching and researching how man-made carbon dioxide emissions result in rising temperatures, endowments until now have been largely off-limits." Investment officers don't want restrictions on the portfolios because they want success — one could say, at any cost. There is a movement afoot, however, that could prove interesting. Students are pushing at over 300 universities to divest in…
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127 Years of Corporate Personhood

127 years ago today — May 10, 1886, in an important aside in Santa Clara County v. Southern Pacific Railroad Company 118 U.S. 394 (1886), the Supreme Court concluded that corporations were “persons” entitled to the protections of the Fourteenth Amendment to the constitution and, therefore, legal participants in the political life of the country. I say “concluded,” but there is nothing in the decision addressing corporate personhood, just handwritten notes of the oral argument that record Chief Justice Waite as stating, “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution . . . applies to corporations. We are of the opinion that it does.” The court reporter subsequently wrote, “The defendant corporations are persons within the intent…
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