JONATHAN BROGAARD, University of Utah - David Eccles School of Business
Email: brogaard@eccles.utah.edu
YESHA YADAV, Vanderbilt University - Law School
Email: yesha.yadav@vanderbilt.edu

Valued at $11.2 trillion – equivalent in size to half the U.S. economy – the corporate bond market is opaque, illiquid and inefficient. This Article argues that the bond market – premised on contract – rests on a fundamentally flawed regulatory design that delivers neither investor protection nor market quality. It makes three contributions. First, it shows that bondholders face a conflict between securing creditor control using a tailorable contact – and the tradability of their bond claim. By tailoring a contract to match the riskiness of an issuer, bondholders end up holding a less standard claim that becomes harder and costlier to trade. Secondly, the Article develops the implications of this conflict for investor protection. Bondholders assume transaction costs that do not exist in equity markets. Activism is more difficult as investors cannot use the threat of exit cheaply to pressure managers. Monitoring costs are high as prices lack a credible surveillance function. Seen through the lens of this conflict, this Article refines the traditional notion of bondholders as being passive actors. Rather, the impossibility of achieving both control and tradability limits bondholders in their ability to push back against managerial and shareholder agency costs. In concluding, this Article sets out a three-part solution designed to create choice, control and liquidity. It proposes: (i) standardization through the creation of tiers of form contracts that can enhance liquidity while offering tailorability in the choice of model contract; (ii) a stronger role for trading platforms in monitoring and enforcing contract terms; and (iii) retaining features of the status quo as part of the new market to accommodate those that need full tailorabilty even at the cost to tradability. This solution seeks to repair the broken bond market and assure that bondholders enjoy both investor protection and market quality as a part of their claim.

BEN CHESTER CHEONG, Singapore University of Social Sciences
Email: benchestercheong@suss.edu.sg

This article discusses some of the issues surrounding artificial intelligence systems and whether artificial intelligence systems should be granted legal personhood. The first part of the article discusses whether current artificial intelligence systems should be granted rights and obligations, akin to a legal person. The second part of the article deals with imposing liability on artificial intelligence beings by analogizing with incorporation and veil piercing principles in company law. It examines this by considering that a future board may be replaced entirely by an artificial intelligence director managing the company. It also explores the possibility of disregarding the corporate veil to ascribe liability on such an artificial intelligence beings and the ramifications of such an approach in the areas of fraud and crime.

TIAGO CARDÃO-PITO, ISEG, Universidade de Lisboa [University of Lisbon]
Email: tcp@iseg.ulisboa.pt

Economic standards, norms and regulations can possess weak spots that might be exploitable for the embezzlement of an organization’s assets with resultant material consequences in money laundering, tax evasion, fraud, corruption, and other potential financial crimes

Our methodological approach is to introduce and discuss a new logical-deductive test that we name as ‘embezzler test’. Our test investigates regulatory architectures from the perspective of someone attempting to divert assets from or to an organization. It appraises whether a potential embezzler could divert resources without being detected and sanctioned.

The embezzler test can be applied to a broad range of standards, norms and regulations.

This new can be improved and further calibrated in future research.

Researchers, regulators, and law makers can use the new test to identify, and eventually fix weak spots for embezzlement in norms, standards and regulations.

To our knowledge, such a test has never been formulated or applied before to identify weak spots for potential embezzlement in regulatory architectures.

THOMAS BIERMEYER, Maastricht University - Faculty of Law
Email: thomas.biermeyer@maastrichtuniversity.nl
MARCUS MEYER-ERDMANN, European Trade Union Institute (ETUI)
Email: mmeyer@etui.org

This report on cross-border mobility in the European Union focuses, in its sixth edition, on cross-border mergers, cross-border conversions, cross-border divisions as well as on SEs within the period 2001 to 2020.

The factor with arguably the most impact on Corporate Mobility, compared to the previous report, is Covid-19. As can be seen in the Report, cross-border corporate mobility transactions overall have decreased in 2020 by 42,1% compared to 2019 and it will be interesting to see in future Reports when pre-pandemic levels of CbCM Transactions will be reached again.

Similar to the fifth report, we are very happy to state, and as reflected in this Report, that we have nearly finalized the collection of cross-border conversions (CBCs) since 2001. That is the case because we could deepen the collection in respect to the national journals/registries of certain Member States such as France, Italy and Luxembourg. That means, by now we have been able to collect 2929 CBCs that took place between 2001 and 2020. Considering that during the same timeframe 6214 cross-border mergers took place, the number of CBCs remains lower. However, taking into account that for CBMs a harmonized legal framework exists since 2008 and that for CBCs such harmonized framework was introduced on 27 November 2019 with an obligation for transposition only in 2023, such numbers are arguably very impressive. At the same time, national legislation regulating CBCs and the case law of the European Court of Justice (CJEU) laid the basis for CBC-transactions.

ARIE FREIBERG, Monash University - Faculty of Law
Email: Arie.Freiberg@monash.edu
MONICA PFEFFER, affiliation not provided to SSRN
JEROEN VAN DER HEIJDEN, Victoria University of Wellington, School of Government, Australian National University, School of Regulation & Global Governance (RegNet)
Email: jeroen.vanderheijden@vuw.ac.nz

Since the 1970s, Australian governments have sought to reduce regulatory burdens, particularly on business, subject regulation to rigorous cost-benefit analysis, and constrain both the stock and flow of new regulation. Yet however measured, regulation continues to grow, frequently in response to community demand. In this article we interrogate both the more extreme claims of the anti-regulation advocates and the alleged successes of anti-red tape initiatives, identifying a critical clash of values over the role of the state and the appropriate relationship between government, business and the community. We conclude by arguing that to deliver desirable societal, economic and democratic outcomes, we need to acknowledge regulation as an asset, professionalise its workforce and more actively assert its public value.

GARRY JENKINS, University of Minnesota - Twin Cities - School of Law
Email: gjenkins@umn.edu
JON J. (MCCLANAHAN) LEE, University of Minnesota Law School, University of Oklahoma College of Law
Email: jon.paul.mcclanahan@gmail.com

The traditional thinking about the path to the top corporate executive leadership posts, reaching the so-called C-suite, is that it begins with earning an MBA degree. By contrast, the JD degree is thought of as one that prepares graduates for the practice of law, for government service, or for public interest advocacy. Since lawyers have historically been trained to protect clients from risk, law is not associated with senior business leadership. Yet, an evolving and accelerating trend is emerging: more lawyers are reaching or crossing over to become part of top corporate management teams. We present findings from our empirical study on corporate leadership profiles that documents a rise in the status of and opportunities for corporate lawyer-leaders and tracks major shifts in lawyers holding senior executive posts over time, thereby challenging the conventional wisdom on corporate talent management.

This Article takes the new law and leadership discourse into quantitative empirical research, and it challenges the traditional conception of the MBA degree as holding the key to a corner office. By examining the changing composition in the C-suites of Fortune 50 companies over the last thirty years, this Article documents the dramatic shift in the percentage of lawyers holding those most powerful corporate leadership posts. It then addresses the implications of these findings for those who aspire to corporate America’s highest heights, for the corporations seeking to develop new leadership talent, and for law schools inspiring and training a new generation of lawyer-leaders.