ANIL ARYA, Ohio State University (OSU) - Fisher College of Business
Email: arya@cob.osu.edu
BRIAN MITTENDORF, Ohio State University (OSU) - Fisher College of Business
Email: brian.mittendorf@yale.edu
RAM RAMANAN, SUNY at Binghamton - School of Management
Email: ramanan@binghamton.edu

Corporate insiders face substantial restrictions on stock sales, but many have viewed receiving tax deductions from charitable donations of stock holdings as an attractive alternative. In fact, empirical evidence consistently indicates that executives even make use of their private information in determining the size and timing of their charitable giving. This paper develops a parsimonious model of informed stock trading that accounts for the practical consideration that disposal of stock by insiders often takes the form of tax-favored charitable donations rather than direct trading. We demonstrate that equilibrium charitable gifts by insiders reflect nonpublic information about firm value and do so in a manner that facilitates price discovery even more efficiently than routine informed trading does. Given the heightened sensitivity of stock donations to firm value, the results provide implications of such donations for market properties, market participants, and charity proceeds, as well as identify how these effects vary with prevailing tax policy.

COLIN MYERS, Independent
Email: cmyers@law.pace.edu
JASON J. CZARNEZKI, Pace University - School of Law
Email: czarnezki@gmail.com

Lawyers, law schools, and corporate entities have shown an increased interest in sustainable business strategies. This is reflected by the increase in sustainability practice groups, law school courses, and textbooks focusing on the relationship between sustainability and business law; lawyers moving into executive-level sustainability positions in the private sector; and the proliferation of corporate sustainability policies, as well as increased interest in mitigating climate risk and engaging in sustainable finance. But what exactly is sustainable business law, and what role do lawyers play in advancing sustainability in the corporate world? This Article argues that “sustainable business law” has emerged as a distinct area of law and serves as an introductory explanation to define and understand the growing subject matter at the intersection of sustainability, business, and the law, as well as explores the key role that corporate governance and finance play in achieving sustainability.

CHRISTOPHER HODGES OBE, University of Oxford - Centre for Socio-Legal Studies, Faculty of Law
Email: christopher.hodges@csls.ox.ac.uk

OBCR is a model for achievement of common purposes and outcomes in a cooperative mode based on engaged relationships built on evidence produced by parties that they can be trusted. The OBC approach can be applied in diverse situations, such as communities and organisations; this model applies to regulation.

OMAR AL FAROOQUE, University of New England (Australia)
Email: ofarooqu@une.edu.au
KHALED M. DAHAWY, The American University in Cairo
Email: dahawy@aucegypt.edu
NERMEEN F. SHEHATA, The American University in Cairo
Email: n.shehata@aucegypt.edu
MARK T. SOLIMAN, University of Southern California - Marshall School of Business
Email: msoliman@usc.edu

Egypt witnessed radical and unexpected changes in political, social and cultural environment that came as a result of the Arab Spring. Since the revolution caused a paradigm shift in so many socio-economic aspects; it is plausible that it also caused dramatic changes in different ways in the relationships of board, ownership and ESG practices. Accordingly, understanding the corporate governance of the largest Arab state in the MENA region following the Arab Spring is a huge benefit. Using the 2011 Egyptian revolution as the exogenous shock, this study empirically examines the effects of board diversity and ownership structure on the ESG disclosure index in the Egyptian Stock Exchange (EGX) listed firms for the pre-revolution (2007-2011) and post-revolution (2012-2014) periods. Using 160 observations for the pre-revolution and 99 observations for the post-revolution periods, we document a significant positive effect of board national diversity on the ESG index in the pre-revolution period. This effect disappears in the post-revolution period. In contrast, we find that board gender diversity shows no significant effect in determining ESG index in both pre- and post-revolution periods. We additionally find that ownership variables appear to have a significant positive impact on ESG disclosure in the pre-revolution period; however, this impact is not carried forward to the post-revolution period. Further analysis on moderating effects suggests that the presence of a female board members and state ownership can diminish the effective role of foreign board members towards ESG disclosure. These findings can provide policymakers, regulators, investors and other stakeholders with a broader perspective of corporate board diversity and ownership when aiming to ensure an optimal level of ESG disclosure from listed companies in Egypt or in other emerging markets.

REGIS BISMUTH, Sciences Po Law School (Ecole de Droit de Sciences Po)
Email: regis.bismuth@sciencespo.fr

The theoretical underpinnings of financial regulation have led to an obsessive quest for transparency. This has not only generated a gradual increase in disclosure requirements, but has also generated some other unintended consequences, such as structural conflicts of interests, which affect the modes of information (and opinion) production of influential actors. Credit rating agencies, for example, have also in their own right raised new regulatory concerns. Within this wider context, this article explores whether regulatory initiatives to stringently discipline credit rating agencies’ activities (particularly with a view to issuing sovereign ratings), or other initiatives which reflect an increasing willingness to control speech in financial markets (for instance those targeting activist shareholder strategies), are in line with relevant principles guaranteeing the freedom of expression which have seemingly remained a blind spot of financial regulators.

CHRIS BRUMMER, Georgetown University Law Center, Institute of International Economic Law (IIEL)
Email: chris.brummer@law.georgetown.edu

Disclosure in decentralized finance is an area where founders’ and regulators’ interests can overlap in important ways. Market participants need to differentiate their dapps to compete and grow—just as regulators have long demanded transparency in order for people to know what they’re buying. But adapting disclosure frameworks popularized in the 1930s to today’s digital marketplace requires bridging decades of technological evolution and fundamentally alien assumptions about market infrastructure.

This white paper contributes to that work. It observes that DeFi presents novel policy questions for disclosure because much of the material information required to participate in an informed way is already available to technologically sophisticated actors on blockchains. This feature is relevant when contemplating how and for whom a disclosure system for DeFi should be modeled. Securities law, with its focus on institutional actors, calls for voluminous and often technical disclosures designed to be filed with authorities; by contrast, consumer protection frameworks rely on targeted, retail-friendly disclosures meant to be digested by everyday shoppers and end users.

Against this backdrop, this white paper offers a framework transposable to securities law, but given the information already accessible to technologically savvy actors emphasizes the need for shorter, crisper disclosures typically associated with consumer protection law. It makes two key contributions. First, it highlights ambiguities inhabiting legacy disclosure obligations, and offers a conceptual roadmap for assisting developers and regulators seeking to identify relevant disclosure issue areas and principles. Second, it introduces a series of crypto-native tools to modernize disclosure delivery in DeFi systems, among them “Disclosure NFTs,” “Disclosure DAOs,” and “Disclosure DIDs.” If properly developed, the white paper shows how these tools could potentially provide more functionality and security than the SEC’s Edgar database and afford a new generation of developers and engineers a unique opportunity to reorient disclosure towards its original New Deal purpose: to be read.