This course offers an advanced treatment of key topics in corporate law and governance. It assumes that students have taken the basic course in Business Associations.
Corporate governance is regulated by many of the same laws covered in the basic Business Associations course, but increasingly is also regulated by laws--such as SOX and Dodd-Frank--that get short shrift in the typical Business Associations course. In contrast, those laws are the core focus of this course. This course is premised on Professor Bainbridge's belief that mastering the relevant law requires situating it in an understanding of the contemporary business environment. The legal issues governing executive compensation makes little sense, for example, if one does not understand the political and economic debate over CEO pay. Similarly, to cite just one more example, mastering the high profile issues respecting shareholder rights will be much easier if the students are familiarized with the changing demographics of shareholders and the rise of activist hedge funds. In addition, this course is also premised on Professor Bainbridge's belief that , lawyers practicing in the corporate governance space must be knowledgeable not only about the law but also best practice. As Sir Adrian Cadbury observed in connection with the United Kingdom’s adoption of the so-called Cadbury Code, it is tempting for managers to obey the letter of law while ignoring the deeper purposes behind it. Sound corporate governance structures thus must be informed as much by best practices as well as formal legal rules.
Major topics include: Corporate purpose. Federalism and corporate governance. The roles and functions of the board of directors. Director independence. The board's oversight duties, including treatment of federal law governing the audit process and internal controls. Executive compensation. Insider trading. Shareholder activism.
This class is taught via lecture. The examination will be administered on an open book basis. The exam will consist solely of objective questions.