Catalog: Digital Commons at Pace - New Repository Articles
Recently, U.S. activists, scholars, and policy makers have turned their attention to one notable effort to address the gender gap in management: gender quotas for corporate boards of directors. Twelve European countries have pioneered quotas in this context. France, Italy, the Netherlands, Norway, and Belgium now have mandatory quotas ranging from 30%-40%. Spain, Germany, Denmark, Finland, Greece, Austria, and Slovenia have voluntary quotas, and Germany and the EU are considering legislation to mandate quotas. Gender quotas for corporate boards represent an intriguing option, even if the case for quotas is not airtight. The argument for gender quotas rests on a number of empirical propositions, all of which remain contested. Scholars cannot yet show definitively whether gender quotas shatter the glass ceiling or improve board decisionmaking or business performance. Indeed, critics worry that quotas could produce a backlash, if female appointees are tokens or if female directors are untrained or inexperienced, but these claims, too, await further empirical investigation.
The excellent conference organized by Darren Rosenblum comparing global approaches to board diversity inspired me to think about how progress in this context has unfolded in the United States. Even though the issue of diversity on corporate boards has become a global issue, few U.S. boards have moved beyond mere tokenism when it comes to female directors. One reason for the lack of diversity among corporate directors is that board selection has been based on membership in a particular network. This essay, however, focuses on the persisting problem of discrimination—a more invidious explanation for the fact that very few corporate boards reflect the gender and racial diversity of their workers, consumers, and the communities in which they do business.
This symposium essay summarizes our ongoing ethnographic research on corporate board diversity. This research is based on fifty-seven interviews with corporate directors and a limited number of other persons of interest (including institutional investors, executive search professionals, and proxy advisors) regarding their views on race and gender diversity in the boardroom.
Using a method rooted in anthropology and discourse analysis, we have worked from a general topic outline and conducted open-ended interviews in which respondents are encouraged to raise and develop issues of interest to them. The interviews range from forty-five minutes to two hours in length and each interview is taped and transcribed. As a group, we then listen to each taped interview at least once with transcript in hand, analyzing each interview qualitatively with a focus on the themes that the respondents identify, the emphases given to these themes, the stories (or narratives) that they tell, and the details of the language that they use. We also thematically code the transcripts and use sorting software to get another, complementary view of the frequency and distribution of the various themes.
As we discuss at length in other published work, there are numerous tensions in directors’ accounts of race and gender in the boardroom. In this essay, we discuss what we view as the central tension in our respondents’ views on corporate board diversity—their overwhelmingly enthusiastic support of board diversity coupled with an inability to articulate coherent accounts of board diversity benefits that might rationalize that enthusiasm.
My work in this field has focused on regulation by quota and regulation by disclosure. With regard to quotas, strikingly, the Norwegian law is not located in regulation that explicitly deals with human rights or equality issues; rather, it is found in the heart of the legal regime that gives life and personality to corporations – in Norwegian corporate law. I have conducted qualitative, interview-based research with Norwegian corporate directors, both men and women. It is only through understanding how the goals of the law have translated into the day-to-day existence of these individuals that we can begin to consider the “big picture” questions that accompany the quota-based approach. With regard to disclosure, I have chosen to focus on the U.S. as a second case study for four principal reasons. First, similar to the Norwegian law, the site that houses the U.S. rule is noteworthy. Once again, it is not found in regulation that focuses on anti-discrimination etc…; rather, it is located in the heart of the legal regime that governs the public issuance of shares – in U.S. securities law. Second, and related to the first, the U.S. rule (like the Norwegian law) has been controversial, painted by some as an unjustified intervention into market terrain and as being in tension with the underlying purpose of securities regulation. Third, quite simply, U.S. markets represent the biggest share of overall global market capitalization. Fourth, I am mindful of the argument of scholars such as Schuck that there is something special – something unique –about the U.S.’s historical engagement with the idea of diversity.
My inquiry into the U.S. approach, using the diversity disclosure rule promulgated by the SEC, begins with an overview of its conceptual underpinnings. I then explore reactions to the rule and consider whether, in promulgating it, the SEC acted reasonably, or if it strayed significantly from its mandate. From there, I use a mixed-method, qualitative–quantitative content analysis to investigate the micro-dynamics of this approach. I take an initial temperature reading of corporate articulations of diversity under the first years of the rule. These articulations are particularly fascinating given that the SEC does not provide firms with a definition of the term “diversity”.
The specific results of my study are forthcoming. Overall, it establishes that the concept of diversity carries multiple connotations for U.S. corporations. However, perhaps its most salient finding is that, when left to their own devices (i.e. in the absence of regulatory guidance), firms most frequently think in experiential terms and focus on a director’s prior experience, or knowledge and skills — rather than in socio-demographic terms with an eye to gender or racial diversity. As I have reported elsewhere, only approximately half of firms in my sample fell into the latter camp.
In February 2013, on the day of the worst snowstorm in many years, Pace International Law Review conducted a symposium on “Comparative Sex Regimes and Corporate Governance.” Despite a total shutdown of all transport networks and the consequent absence of a few stranded scholars, we met to discuss the fraught questions posed by corporate board quotas and formulate answers.
Led by Norway in 2003, several nations have begun to mandate certain levels of women’s inclusion on corporate boards. In the face of widespread exclusion of women from corporate power that suggests structural biases, these quotas appear radical and compelling. The wake of the financial crisis has accentuated this phenomenon, as stereotypes of women as more risk-averse prompt legislatures to attempt to ensure more economic stability.
This article focuses on the action localities have taken toward mitigating some of the adverse impacts of hydraulic fracturing, or hydrofracking. The Article will explore impacts at the local level and will show the governance gap that has resulted from federal and state regulations that leave many local impacts unmitigated. Zoning laws and other practices that local governments are adopting are also discussed, explaining why state preemption over the traditional role of local governments in regulating this particular heavy industrial activity is not the ideal situation.
New York’s Decanting Statute: Helping an Old Vintage Come to Life or Spoiling the Settlor’s Fine Wine?
The Comment examines trust decanting in four parts. Part I reviews the historical evolution of decanting statutes, first from common law roots, and later focusing on the legislative history of New York’s decanting statute. Part II briefly explains the functionality of section 10-6.6 of the NY EPTL; the “how does it work” explanation of the statute that authorizes decanting. Part III will discuss the many practical uses of the decanting statute. Finally, Part IV will transition into a discussion on how the trustee’s use of this statute not only leaves him in limbo regarding the tax treatment of his actions, but places him in a head on clash with New York’s longstanding commitment to honoring settlor intent.
Moving Beyond Marriage: A Proposed Unit of Presumed Economic Interdependence for Joint Filing Purposes in Bankruptcy and in Tax
In order to promote both equality and efficiency, this Comment proposes that individuals should have the opportunity to file jointly for tax and bankruptcy purposes when they have a relationship predicated upon economic interdependence, as opposed to basing the opportunity to file jointly upon marital status. Part I of this Comment will briefly discuss the history of marriage in the United States. In particular, Part I will discuss the role that the government has had in promoting and regulating marriage and how the treatment of married persons operates to the exclusion of the unmarried. Parts II and III of this Comment will provide a history of the joint income tax and joint bankruptcy petition. In Parts IV(A) and IV(B), this Comment will evaluate and critique both the benefits and drawbacks of allowing individuals to file jointly for tax and bankruptcy purposes, and discuss the implications of joint filing. In Part V(A), this Comment will analyze and critique the relevance of the current system, and will conclude that both the Bankruptcy Code and the Internal Revenue Code must be modernized in order to reflect the changing demographics of the American household. In Parts V(B) and V(C), this Comment will present the reader with two alternative options for modernization: a strictly individual or modified individual system or allowance of a unit based on presumed economic interdependence. Ultimately, this Comment will conclude that a unit based on presumed economic interdependence would achieve the most equitable result.
Too Complex to Perceive? Drafting Cash Distribution Waterfalls Directly as Code to Reduce Complexity and Legal Risk in Structured Finance, Master Limited Partnership, and Private Equity Transactions
This Article proposes that complex structured finance transactions involving sophisticated investors should adopt an analogous solution to the home construction agreements’ strategy of contracting by reference to blueprints. First, dealmakers should, preferably by choice, place as much of their waterfall distribution specification and related inputs as possible into automated, programmatic representations that will be used to make the actual distribution. In many cases, these agreements already have programmatic representations, so this change should pose relatively few practical challenges logistically. Second, they should, like their counterparts in construction contracts, define the terms of those waterfalls by reference to their functional representations. The contract should be depicted by the same code that will decide the actual distribution, and that coded depiction should be the legally binding contract. By unifying the functional and legal realities of the structured finance products, dealmakers will avoid wasting resources on creating unnecessary and inaccurate legal depictions, and will also reduce the legal and financial risk created by the imprecision and inaccuracy of perception those poor depictions create.
This Article will proceed as follows: In Part II, this Article sets out to restate and expand Professor Henry Hu’s explanation of the intermediary depiction problem with what this Article terms the challenge of perception. Professor Hu observes that the difficulty with the current regulatory disclosure regime is one of imperfect depictions and could be fixed with pure information disclosure. By contrast, this Article contends that so long as there are multiple potentially legally determinative depictions, there will be financial, legal, and systemic risk. Because of that, no regime of additional disclosures can, by itself, reduce those risks; if anything, adding to the number of potentially legally binding disclosures increases risk. Therefore, in Part III, this Article proposes that in complex structured finance agreements’ waterfalls and other similar agreements between sophisticated parties, the functional code that creates the functional reality should, as described above, become the contract by reference in the legal deal document and thus should become the legally determinative reality. This would reduce the confusion that impedes perception of the future reality of the financial product’s cash flow distributions.
This Article, which is the first to examine the relationship between the ACA’s insurance market reforms and state regulation of insurance, argues that states’ decisions to forego creating their own exchanges may mark the beginning of an important shift of regulatory authority from the states to the federal government. It begins by sketching the historical antecedents of the current allocation of state and federal authority over insurance regulation. The aim of this discussion is to highlight the unique role states play in the regulation of insurance as opposed to other financial products. Part III explains the pre-ACA structure of health insurance regulation. It discusses both the objectives of health insurance regulation and the substantive and institutional frameworks states have evolved to meet those objectives. Part III also explains the reasons why states are well suited to regulate health insurance. Before turning to the regulatory structure introduced by President Obama’s health reforms, Part IV explains the federal government’s involvement in health plan regulation before the ACA. Part V details the relevant ACA provisions, explaining the new rules that will apply to health plans and carriers. It pays special attention to the application of these rules—some apply to all health plans, regardless of how they are sold, while others apply only to plans sold through the exchanges. These latter rules are particularly important to this Article’s analysis, as they represent the regulatory functions that the federal government will assume—via its exchange—in states that elect not to create exchanges. Part VI explores the effect the ACA’s exchange rules will have on the balance of state and federal regulatory authority, and highlights how the opt-in character of the exchanges will alter this balance. Lastly, it offers observations about the impact increased federal regulation of health insurance may have on the regulation of other lines of insurance.
A Failure to Supervise: How the Bureaucracy and the Courts Abandoned Their Intended Roles under ERISA
This Article addresses how courts failed to adequately supervise employers administering pension plans before ERISA. Relying on a number of different legal theories—from an initial theory that pensions were gratuities offered by employers to the recognition that pension promises could create contractual rights—the courts repeatedly found ways to allow employers to promise much and provide little to workers expecting retirement security. In Section III, this Article addresses how Congress failed to create an effective structure for strong bureaucratic enforcement and the bureaucratic agencies with enforcement responsibilities failed to fulfill those functions. Finally, in Section IV, this Article discusses how the courts abdicated their duty to supervise ERISA fiduciaries once bureaucratic failings made ERISA’s private litigation remedy and the supervisory function of the courts increasingly important.
In an article in 1989 in the Virginia Law Review, Professor Robert Cooter argued for changes in the law that would facilitate the development of a market in unmatured tort claims. An unmatured tort claim is a potential claim that a potential victim has before any injury has occurred. Cooter proposed that potential victims have the right to sell their unmatured tort claims. That is, Cooter proposed that potential victims be allowed to sell their right to sue even before an accident or injury ever occurs. Even twenty-five years later, the proposal remains both bold and imaginative, and yet it remains unadopted in any jurisdiction. There is a reason for this. In this Article, I reexamine the proposal as to its likely intended and unintended effects. The unintended effects were overlooked in the original article because of its static analysis. A dynamic analysis reveals these unintended effects. These effects do not invalidate the proposal. I conclude that Cooter’s proposal continues to have merit, but several modifications are necessary if the proposal is to succeed. Without these modifications, the proposal will fail to accomplish its goals and will have serious adverse unintended effects. In short, this Article argues for the adoption of measures to permit the development of a limited market in unmatured tort claims. The primary limitation is the exclusion of potential injurers in the market for their own unmatured tort claims. Other modifications include utilizing a different measure of damages and a prohibition on liability limiting agreements.
Upholding a 40-Year-Old Promise: Why the Texas Sonogram Act is Unlawful According to Planned Parenthood v. Casey
This Article begins with a brief review in Part II of the three crucial Supreme Court cases on abortion rights: Roe v. Wade, Planned Parenthood of Southeastern Pennsylvania v. Casey, and Gonzalez v. Carhart. Based on these cases, Part III formulates a constitutional test that courts should be using to determine whether an abortion regulation is constitutional that includes all of the factors identified by the Supreme Court as part of the “undue burden” analysis, factors that have been overlooked by many courts. Finally, Part IV applies this constitutional test to the Texas Sonogram Act, concluding that the act is unconstitutional because it: (1) requires the delivery of misleading, untruthful and irrelevant information; (2) unconstitutionally hinders women’s decision-making liberty; and (3) poses a substantial obstacle for a large fraction of the relevant group of women affected by the regulation.
False Persuasion, Superficial Heuristics, and the Power of Logical Form to Test the Integrity of Legal Argument
This Article will generally describe philosophical logic, logical form, and logical fallacy. Further, it will explain one specific logical fallacy—the Fallacy of Negative Premises—as well as how courts have used the Fallacy of Negative Premises to evaluate legal arguments. Last, it will explain how lawyers, judges, and law students can use the Fallacy of Negative Premises to make and evaluate legal argument.
Social Insecurity: A Modest Proposal for Remedying Federal District Court Inconsistency in Social Security Case
This Article addresses a relatively narrow but consequential problem in the system: the inadequacy of federal judicial resolution of appeals from the denial of Social Security disability benefits. It addresses the problem with an equally narrow, and hopefully equally consequential, solution: granting a published district court decision in such a case the power of binding precedent with respect to the judicial district in which the opinion is issued. In so doing, greater uniformity, consistency, fairness, and efficiency would be brought to a process that is badly in need of all.
The Article proceeds in five parts. Part I provides some brief background on binding precedent in the court system generally. With that background in mind, Part II surveys the Social Security disability process, summarizing its basic structure. Part III then transitions into a discussion of the federal courts’ role in the process, focusing on the problems afflicting their decisions: inconsistency, lack of appellate guidance, unfairness, unpredictability, and inefficiency. To solve those problems, Part IV proposes imbuing all published federal district court opinions in Social Security appeals with the force of binding law with respect to all other judges in the district. Finally, Part V applies the proposal, demonstrating how this reform would help deal with each of the flaws in the process.
This Article begins by identifying and drawing the outline of this previously unrecognized source of law: technology-made law. It then focuses on one paradigmatic case: changes in the meaning of “zero” and the closely related concept of a mathematical limit (for example a speed limit). It defines “zero” and demonstrates its explicit and implicit uses in law. It then posits that there are two ways to interpret a law involving a technological limit: a technology-static approach, in which comparisons are made using the technology available at the time the law was enacted, and a technology-dynamic approach, in which comparisons are made using the technology available at the time compliance is determined. It then sets the stage for a comparison of these approaches by surveying the sources of authority for making law. The approaches are then compared using examples of the type of law which should be interpreted under the technology-static rubric (vehicle speed limits) and the type of law which should be interpreted under the technology-dynamic rubric (environmental law). The analyses are then compared so as to extract a set of principles that should aid in resolution of the question (static or dynamic interpretation) in other cases. Finally, it offers a generalized theory of how problems of technology-made law can be minimized and how they should be addressed in circumstances where they have not been avoided.