Abstract

http://ssrn.com/abstract=958075
 
 

Citations (2)



 


 



The Irrelevance of State Corporate Law in the Governance of Public Companies


J. Robert Brown Jr.


University of Denver Sturm College of Law


University of Richmond Law Review, Vol. 38, p. 317, 2003-2004

Abstract:     
Weak state regulation of corporate governance process and the race to the bottom resulted in federal intervention in the 1930s and the adoption of the securities laws. The laws largely ousted the states from the corporate disclosure and proxy process. The duties of directors, however, remained subject to state regulation.

The race to the bottom, therefore, continued. One example was the adoption of waiver of liability provisions. It took less than two decades after Delaware adopted the first such provision in the aftermath of Van Gorkom for all 50 states to have something similar in place. Likewise, fiduciary obligations gradually weakened, with Delaware all but eliminating the duty of loyalty, replacing substantive fairness with ineffective procedural requirements. The predicable scandals and excesses followed.

Congress responded with the adoption of Sarbanes-Oxley and federalizing some portions of the duties of officers and directors. SOX, however, did not do so in a systematic way. As a result, neither the states nor the federal government adequately regulate the behavior of corporate managers. Said another way, the dynamics that resulted in the scandals of the millennium largely remain in place.

Number of Pages in PDF File: 64

Accepted Paper Series


Download This Paper

Date posted: January 18, 2007  

Suggested Citation

Brown, J. Robert, The Irrelevance of State Corporate Law in the Governance of Public Companies. University of Richmond Law Review, Vol. 38, p. 317, 2003-2004. Available at SSRN: http://ssrn.com/abstract=958075

Contact Information

J. Robert Brown Jr. (Contact Author)
University of Denver Sturm College of Law ( email )
2255 E. Evans Avenue
Denver, CO 80208
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,006
Downloads: 441
Download Rank: 34,208
Citations:  2
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 1.266 seconds