Posts Tagged ‘David Kershaw’

Shareholder Empowerment and Bank Bailouts

Posted by June Rhee, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Wednesday January 2, 2013 at 8:53 am
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Editor’s Note: The following post comes to us from Daniel Ferreira, Professor of Finance at London School of Economics, David Kershaw, Professor of Law at London School of Economics, Tom Kirchmaier, Lecturer in Business Economics and Strategy at University of Manchester, and Edmund-Philipp Schuster, Lecturer in Law at London School of Economics.

One, of several, regulatory responses to the financial crisis has been to consider the extent to which bank failure can be explained by flaws in banks’ corporate governance arrangements.

In many jurisdictions this diagnosis has generated calls upon shareholders to act as effective owners and hold boards of banks to account, as well as calls to empower shareholders to enable them to do so. But what do we know about the relationship between shareholder power and bank failure? To date scholarly attention has been paid to the relationship between board independence and bank failure, but limited attention has been given to the relationship between bank failure and the core corporate governance rules that determine the ease with which shareholders can remove and replace management. In our paper, Shareholder Empowerment and Bank Bailouts, we examine the relationship between shareholder power — and, thus, managerial accountability — and the probability of bank bailouts.

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Is the Board Neutrality Rule Trivial?

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday May 27, 2011 at 9:35 am
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Editor’s Note: The following post comes to us from Carsten Gerner-Beuerle, David Kershaw, and Matteo Solinas all of the Department of Law at the London School of Economics.

In our paper, Is the Board Neutrality Rule Trivial? Amnesia About Corporate Law in European Takeover Regulation, which was recently made publicly available on SSRN, we suggest that there are two axes upon which we can assess the significance or triviality of the adoption of a board neutrality rule in European Union Member States. The first axis is the extent to which a Member States’ adoption of an unqualified board neutrality rule makes a consequential difference to the ability of boards to fashion and deploy defenses without requesting shareholder approval to do so: without a board neutrality rule does corporate law provide the tools to boards to construct defenses, and does it allow them to be used without restraint? If one emerges with a positive response from the analysis of these questions, the second axis comes into play, namely, the potency of such available defenses. There are two elements that structure defense potency: the first depends upon the nature of the defense itself – an asset sale, for example, is significantly less potent than a poison pill; the second element is the background corporate governance rules such as rules on director removal and the calling of shareholder meetings that enable or restrain the defenses’ deployment for non-corporate/non-shareholder value purposes.

…continue reading: Is the Board Neutrality Rule Trivial?

 
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