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Abstract:
Disapproval of homosexuality is widespread, deep-rooted and of long standing. Often this disapproval is tied to religion including, for nearly 3,000 years, the religions of "the Book" - Judaism, Christianity and Islam. In the last forty years a movement to change the treatment of homosexuality has emerged in the West. This movement first sought only tolerance. Now it demands acceptance of homosexuality as legally and socially equal to heterosexuality. The demand for approval has brought the gay movement into conflicts with "traditional" religion that flare throughout our culture.

This war is not amenable to compromise. The goals of the gay movement are not primarily economic; most gays already have above-average incomes. Because of the pervasive influence of religion in America, equal acceptance of homosexuality cannot be achieved unless religious groups either surrender and affirm this equality or, at least, those that do not are reduced to a despised minority forced to keep its views to itself. Since the gay movement's goals are not primarily economic, it cares about the law not so much for its financial impact as for its symbolic or expressive significance. Since the prize is a symbol, compromise is unacceptable except, perhaps, as a temporary tactic: anything less than full equality is inferior, second-class status, intolerable.

Full legal and social equality of homosexuality, however, cannot be squared with respect for the traditional religions that disapprove of it. If government treats homosexuality as equal to heterosexuality and by nondiscrimination laws compels citizens to do likewise, then disparagement of homosexuality must be condemned and suppressed just as racial discrimination now is. In effect, government must declare traditional religion to be false and evil.

The legal war between religion and the gay movement will not culminate in an Armageddon, a final showdown. Neither side is poised to obtain a national law providing that its claims always trump the claims of the other side. Accordingly, the war between religion and the gay movement seems fated to drag on indefinitely in innumerable battles large and small.

Part I of this Article discusses general federal and state constitutions and statutes that set some boundaries for specific disputes. Part II discusses government action supporting homosexuality, including antidiscrimination laws and religious exemptions therefrom. Part III discusses actions by private institutions against employees, students, or others who manifest traditional views about homosexuality. Part IV discusses general principles in the conflict between the gay movement and religious freedom and suggests some resolutions.

Homosexuality, Religion, Civil Rights

Abstract:
This paper examines the Team Production and Director Primacy Models of corporate governance, finds them wanting, and explains why corporate governance is moving toward shareholder primacy and why this will benefit not only investors but the whole American economy.

The director primacy model posits that shareholders are so ill-informed and so divided in their interests that they would self-destruct if they controlled the firm. Accordingly they tie their own hands by ceding control to a board of independent directors. Advocates of the team production theory often agree with the foregoing but stress the importance to the firm of other constituencies, or stakeholders, including suppliers, customers, creditors and, especially, employees. To obtain the needed commitments from these stakeholders firms must credibly promise to treat them well, but these arrangements are too complex to be specified in contracts. If shareholders controlled the firm, they could renege on their implicit promises to stakeholders. Accordingly, firms hand control to a board of disinterested directors who act as mediating hierarchs to balance the interests of all constituencies.

These theories are riddled with internal contradictions and fail many tests of empirical verification. In my article I expose these problems and show that the current reality of corporate governance is not control by independent, disinterested directors but by CEOs. I then discuss why the alternative -- shareholder primacy -- has not been achieved. I describe both the obstacles to shareholder control and current trends that are facilitating a stronger investor voice. Finally, I suggest that these trends and new ideas may soon lead to real shareholder primacy, and that this will benefit not only investors but the whole American economy.

Team production model of corporate governance, director primacy model of corporate governance, mediating model of corporate governance, CEO domination, shareholder primacy, board of independent directors, mediating hierarchs, shareholder control, investor voice

Abstract:
Trust, altruism and reciprocity are attracting growing attention from scholars. Interest began with psychological experiments showing that people often are altruistic, trust others, and reciprocate the benevolence of others far more than economic models of "rational" human selfishness predict. These findings inspired social scientists to discover what factors promote or hinder cooperation. Legal scholars have employed this learning to determine how the law does or could facilitate or discourage cooperation in many contexts, including business transactions and the workplace. The influence of race on cooperation has been studied in specific areas, but so far no one has considered how the new learning might improve race relations and racial equality. This article makes an initial effort to do so.

Trust in others is essential to human interaction, especially in dealings too complex for the parties' rights and duties to be detailed in writing. Trust grows when each side's contribution is reciprocated by the other's, but not if reciprocity is withheld, and trust shrinks rapidly if one party abuses the other's trust by acting opportunistically. People often eschew gain and help the needy, but altruism also dwindles if the recipients do not seem truly needy, or do not try to help themselves, or if others who could help refuse to do so and "free ride" on those who are altruistic.

The dearth of racial trust in America is dramatically manifested in the separation so often chosen by both blacks and whites. Distrust blocks cooperation and altruism between the races and obstructs efforts to solve virtually every social problem. Part I of this article reviews the learning about trust, altruism and reciprocity. Part II applies this knowledge to better understand racial division and inequality in America and why many policies and positions do not ameliorate these ills and indeed may exacerbate them. Part III discusses our goals in race relations. Part IV prescribes principles to foster interracial trust. Part V proposes some specific steps to reduce racial inequality while building trust.

Trust, Altruism, Reciprocity, Economic models of "rational" human, Cooperation, Race, Race relations, Racial equality, Racial preferences, Social Welfare, Education, Job Training, Taxes, Criminal Law, and Immigration

Abstract:
In 1984 Ronald Gilson published Value Creation by Business Lawyers: Legal Skills and Asset Pricing. It began: "What do business lawyers really do? Embarrassingly enough, at a time when lawyers are criticized with increasing frequency as nonproductive actors in the economy, there seems to be no coherent answer." He dismissed lawyers' own answer that "they 'protect' their clients, that they get their clients the 'best' deal." He also rejected the academic literature which offered a laundry list of roles the business lawyer plays: "a counselor, planner, drafter, negotiator, investigator, lobbyist, scapegoat, champion, and, most strikingly, even as a friend." Dissecting the corporate acquisition as his specimen, Gilson concluded that lawyers add value as "transaction cost engineers." In particular, lawyers bridge the parties' divergent expectations about returns on the asset to be transferred by drafting an earnout which makes the price contingent on its returns between the signing of the deal and the closing; and overcome lack of information (principally of the buyer) by arranging efficient production and verification of information. From these findings Gilson also recommended that legal education for business practice downgrade traditional subjects (like analysis of appellate cases and knowledge of relevant regulatory law) in favor of corporate finance and transaction cost economics.

In the succeeding 24 years Gilson and others refined his thesis, but no one fundamentally challenged it. This literature about what corporate lawyers do (the "received model") is too narrow. This article takes a wider and deeper perspective. Part I describes the received model. Part II exposes several problems with that model. Part III offers a fuller vision showing that business lawyers perform a greater range of activities using a larger set of skills than in the received model. Although these activities and skills are extremely varied, it is less accurate to say that business lawyers are transaction cost engineers than that they are enterprise architects. Part IV discusses the implications of this revised model for legal education. It argues that, although a knowledge of corporate finance and transaction cost economics is useful for some business lawyers, it is more important that they understand the obstacles to optimizing the performance of business entities and the contractual mechanisms available to overcome these obstacles. They also need specific behavioral skills, including how to negotiate when all parties are trying to build mutual trust and confidence.

Value Creation by Business Lawyers, Legal Skills and Asset Pricing by Ronald Gilson, Transaction cost engineers, Enterprise architects, Business lawyers, Profession, Job skills, Job knowledge, Business law practice

Abstract:
Dissatisfaction with the governance of public companies is as old as the public company itself, but public concern about corporate governance is spasmodic. Prior reforms did not cure the ills of corporate governance, and there is little reason to think that the recent spate of reforms will be any more effective. The fundamental problem of corporate governance remains what it has always been: the separation of ownership and control. No reform can succeed unless it overcomes this contradiction. Corporate executives determined to preserve their privileges and a number of scholars deny this claim; in effect, these Panglosses consider the status quo the best of all possible worlds. Others recognize that corporate governance is broken and that initiatives recently instituted or proposed are inadequate. Several have proposed changes, some of which would be beneficial, but none promises to eliminate the separation of ownership and control. After a survey of the current debate over corporate governance, this article explains why the separation of ownership and control is the central problem of corporate governance and why past reforms have failed. The article then discusses the reforms instituted and proposed after the recent scandals and why they too will fail. The article concludes by urging a means of finally solving the problem of corporate governance by having the corporation's nominees for the board chosen by a committee of the largest shareholders.

Corporate Governance, Public Companies, Ownership, Control, Reform

Abstract:
Calls for a stakeholder voice in corporate governance never end, as evidenced by the Symposium Corporations and Their Communities to which this paper is a contribution. The demise of labor unions and explosion of executive compensation while the income of most Americans has stagnated over the last several years has precipitated cries for remedial action, some of which include stakeholder governance. Although complaints about deepening inequality are just, other remedies should be pursued. The traditional objections to stakeholder governance remain valid: the interests of stakeholder groups clash not only with those of the shareholders but also with each other, and acceptable means for choosing representatives of stakeholders other than employees have not been discovered. Stakeholder governance would impair economic efficiency: maximization of shareholder wealth remains the best proxy for maximizing the benefits of private enterprise to society. Beyond the traditional problems with stakeholder governance, economic developments make it an even worse idea. Capital has become more mobile, and the U.S. is no longer so dominant a venue for investment; many countries (notably China and India) have now entered the competition for capital, and corporate governance in many countries now treats investors better than the U.S. does. Instituting a serious stakeholder role in corporate governance now would send capital fleeing abroad, with great resulting damage to the American economy.

Corporate Governance, Stakeholder, Capitalism, Kent Greenfield, Timothy Glynn, Shareholder Primacy

Abstract:
The separation of ownership and control publicized by Berle and Means in 1932 persists today. Domination of public companies by self-serving and ineffective executives costs America billions of dollars every year and contributed to the current economic meltdown. Repeated efforts to solve this problem--including the Sarbanes-Oxley Act, expanded disclosure duties, and more stringent requirements for director independence--have had little benefit and have sometimes made matters worse. The flaws in our corporate governance system are a growing problem for America’s economy as disillusioned investors increasingly place their capital in other countries.

Nonetheless, proposals for greater shareholder power have encountered criticisms: various shareholders have conflicting goals; shareholders favor a short-term perspective at the expense of the long-term health of companies; and shareholders lack the knowledge needed to play a positive leading role in corporate governance.

director primacy model of corporate governance, CEO domination, shareholder primacy, board of independent directors, shareholder control, investor voice, (inter)shareholder conflicts, investor behavior, investor protection

Abstract:
The American economy suffers from the domination of corporations by chief executive officers who exercise control for their own benefit, at considerable cost to shareholders and to efficiency. The costs of this defect are rising as capital flees the United States for a growing number of countries that treat investors better. America’s corporate governance problem began and persists because corporations are franchised by the states, and it is in the economic interest of the states (especially Delaware) to cater to CEOS because they control the choice of state of incorporation. To break this destructive arrangement I propose optional federal incorporation with the choice of jurisdiction to be made by shareholders alone. Shareholders are the only constituency whose goal is to maximize share value, and this goal coincides with society’s interest in economic efficiency. Shareholders also have the sophistication to decide major corporate questions wisely. The institution of optional federal incorporation and shareholder choice of jurisdiction of incorporation would trigger a true “race to the top,” a competition to offer the most efficient corporation law.

Corporations, Chief Executive Officer, Corporate Governance, Board of Directors, Delaware Corporate Law, Shareholders’ rights, Efficiency, Choice of jurisdiction, Federal Incorporation, Share Value

Abstract:
Beginning with the Enlightenment in the 18th century religion was widely denounced by intellectuals. They sought to exclude religion from public life and predicted the demise of religion as freedom and education spread. This secularism triumphed in the Supreme Court in the 1960s and transformed the Court's construction of the religion clauses of the First Amendment.

Defying the intellectuals' prediction, though, religion has remained vibrant. Instead, secularism has waned, and many intellectuals now appreciate the social significance of religion. In the Supreme Court, however, secularism remains strong. Scholars have long noted the Court's antipathy to religion but have neither examined it in the context of the rise of secularism nor discussed the persistence of secularism in the Court despite its demise elsewhere. This article reviews the intellectual rise and fall of secularism and its ascent and puzzling duration in the Court. I conclude with a discussion of how a decent respect for religion would influence constitutional jurisprudence and how this influence would benefit society.