December 6th, 2017 (Wednesday) at 12:10 PM
John Armour, Stephen and Barbara Friedman Visiting Professor of Law (Fall 2017), Hogan Lovells Professor of Law and Finance at Oxford University, Fellow of the European Corporate Governance Institute
Location: Likely JG 807
November 27, 2017 (Monday) at 12:10 PM
Edward Morrison, Charles Evans Gerber Professor of Law, Columbia Law School
Location: JG 807 (pending room confirmation)
October 30, 2017 (Monday) at 12:10 PM
Joshua Mitts, Associate Professor of Law, Columbia Law School
Location: Likely WJWH 600
Topic: The Law and Macroeconomics of Corporate Governance
Abstract: Corporate governance has long focused on the microeconomic benefits of change while giving less attention to the macroeconomic consequences of instability. The classical justification for ignoring volatility is diversification. Portfolio theory shows that diversified investors should be indifferent to idiosyncratic risk, and firm-specific governance changes should add little to the total variance of a diversified investor’s portfolio.
But the effects of governance changes are not necessarily confined to individual firms. For example, layoffs can enhance efficiency but also impose adjustment costs as employees search for new jobs and forego consumption (Gordon, 2017). While disagreement and difference of opinion often lead to better decisions, they can also increase aggregate volatility in product, labor and capital markets. Investors cannot diversify away macroeconomic volatility, and these costs are generally not internalized by activists and other shareholders agitating for change.
In this project, I consider the implications of macroeconomic instability for corporate governance. I distinguish the impact of aggregate volatility from classical distributional considerations. Even if tax policy were to facilitate perfect income redistribution, macro-volatility would still impose costs on fully diversified shareholders whose wealth is invested in the capital markets. Instability is a first-order consideration when evaluating the welfare implications of corporate governance institutions.
October 25, 2017 (Wednesday) at 12:10 PM
Dan Awrey, Visiting Professor of Law, Columbia Law School (Fall 2017), Associate Professor of Law and Finance and Fellow of Linacre College, Faculty of Law, Oxford University, UK
Location: Likely WJWH 600
Topic: Derivatives Deconstructed
Abstract: Derivatives are sophisticated financial instruments that bundle elements of state-contingent contracting, the formal allocation of property and decision-making rights, and informal mechanisms such as reputation and the expectation of future dealings. This hybridity splits every derivative contract into two separate contracts: one that governs under normal market conditions, and another that governs under conditions of fundamental uncertainty. In good times, derivative contracts contemplate the near automatic determination and performance of each counterparty's obligations. In bad times, these contracts include various mechanisms designed to provide counterparties with the flexibility to incorporate new information, fill contractual gaps, and facilitate efficient renegotiation.
Deconstructing derivative contracts in order to highlight their inherent hybridity yields a number of important policy insights. These insights relate to (i) whether derivatives should be regulated as 'securities', (ii) the desirability of allowing clearinghouses to unilaterally restructure the derivative portfolios of failed counterparties, (iii) the promise and perils of using distributed ledger technology and smart contracts to create a new infrastructure for the execution, clearing, and settlement of derivative contracts, and (iv) the important role played by central banks as 'dealers of last resort' during periods of fundamental uncertainty and financial instability.
October 16, 2017 (Monday) at 12:10 PM
Nicholas Lemann, Joseph Pulitzer II and Edith Pulitzer Moore Professor of Journalism, Columbia Journalism School, Dean Emeritus, Columbia Journalism School
Location: Jerome Greene Hall, room 646
Topic: Adolphe Berle (precise topic TBD)
October 11, 2017 (Wednesday) at 12:10 PM
Zohar Goshen, Alfred W. Bressler Professor of Law, Columbia Law School, Director, Center for Israeli Studies, Columbia Law School
Location: Jerome Greene Hall, room 602
Topic: Irrelevance Theorem of Governance Structure
(co-authored with Doron Yizhak Levit, Wharton)