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business roundtable statement on the purpose of a corporation August 19, 2019

Posted by Bradley in : markets, Uncategorized , add a comment

The Statement on the Purpose of a Corporation emphasizes stakeholders – all stakeholders and not just shareholders. The announcement states:

Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility.

The announcement of this change makes sense in the current (uncertain) political environment, but what it may mean in practice is unclear. Before the announcement corporations put a lot of effort into seeming to care about corporate social responsibility and esg measures (it is hard to monitor how real any of this is) . After the announcement many shareholders will continue to demand their profits.  

undocumented minors in america August 15, 2019

Posted by Bradley in : ethics, Uncategorized , add a comment

The 9th Circuit interpreted the settlement in  the Flores litigation to the effect that minors entitled under the settlement agreement to be held in safe and sanitary conditions have the right to “adequate sleep, essential hygiene items, and adequate, clean food and water” and that the district court’s decision that held this did not modify the safe and sanitary conditions provision of the settlement agreement. The safe and sanitary language was not too vague to be enforced. The court wrote:

Assuring that children eat enough edible food, drink clean water, are housed in hygienic facilities with sanitary bathrooms, have soap and toothpaste, and are not sleep-deprived are without doubt essential to the children’s safety. The district court properly construed the Agreement as requiring such conditions rather than allowing the government to decide whether to provide them.

It is shocking to think that the government argued that it was not necessary to provide incarcerated minors (children) with soap and water and ensure that they were not sleep deprived.

emmeline February 7, 2018

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Suffragette or character in Hot Chocolate song?

the uk, and how not to manage a country June 12, 2017

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Last week’s election followed months of the UK not managing Brexit at all well, in contrast to the efficient, bureaucratic way the EU seems to have managed its end of the process (to be fair the EU institutions have much more recent experience of thinking about trade and EU-treaty related issues than anyone in the UK Government seems to have had). The election result might have been seen as an opportunity to take on board some of the mountains of evidence of the downsides of Brexit – especially a hard Brexit – in particular parliamentary committees have generated a number of very worrying reports. This doesn’t seem to be happening yet. More importantly the powers that be don’t seem to be responding with any more competence to the current situation than they did to the initial post-referendum period, or to running an election. This doesn’t bode very well for the future of the country.

sec announces over $100 million in whistleblower awards August 30, 2016

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whistleblower awards

And today the SEC announced its second largest award of $22 million.

uk deregulation act allows for possibility of severe limits on regulators’ powers March 27, 2015

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Section 108 of the UK’s Deregulation Act 2015 provides that regulators may be required to “have regard to the desirability of promoting economic growth.” What this means is that they must

in particular, consider the importance for the promotion of economic growth of exercising the regulatory function in a way which ensures that-
(a) regulatory action is taken only when it is needed, and (b) any action taken is proportionate.

On the face of it this looks potentially reasonable – it is about encouraging regulators to make sure that regulation is necessary and proportionate (of course regulation should be proportionate and why would you ever want unnecessary regulation). But it isn’t clear how these terms are going to be interpreted, or whether the number of potential targets for this approach is small or large (for some concerns, see here). The provision has the potential to cause significant harm to all of the interests regulation is supposed to protect – and this is even before the TTIP regulatory cooperation measures are used to limit regulation. The UK can do it all on its own.

the justiciability of torture claims: uk version October 30, 2014

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In Belhaj v Straw the English Court of Appeals (the Master of the Rolls, Lord Dyson, Lord Justice LLoyd Jones (who was the principal drafter of the judgment of the court) and Lady Justice Sharp) have allowed a range of claims that Jack Straw, Mark Allen, the FCO and the Home Office were involved in unlawful renditions to Libya (involving allegations of torture) to proceed. The Court rejected arguments (which had succeeded in the court below, although the Judge, Simon J. expressed some concern) that the acts complained of implicated the act of state doctrine which makes acts of a foreign state on its own territory non-justiciable in English courts. The Court of Appeal found that the act of state doctrine did not prevent the litigation because it involved claims of violations of international law and fundamental human rights and because the alleged acts perpetrated by the US took place outside the US. The Court of Appeal noted that English law did not require deference to the views of the executive as to the likely impact of exercising jurisdiction on foreign relations (in contrast to the situation in the US). The question was whether the court should go beyond precedent and hear a case which would require an investigation into the validity of the conduct of a foreign state (all of the claims would involve an assessment of acts of foreign states).

The Court said:

a fundamental change has occurred within public international law. The traditional view of public international law as a system of law merely regulating the conduct of states among themselves on the international plane has long been discarded. In its place has emerged a system which includes the regulation of human rights by international law, a system of which individuals are rightly considered to be subjects. A corresponding shift in international public policy has also taken place… These changes have been reflected in a growing willingness on the part of courts in this jurisdiction to address and investigate the conduct of foreign states and issues of public international law when appropriate….The abhorrent nature of torture and its condemnation by the community of nations is apparent from the participation of states in the UN Convention against Torture (to which all of the States concerned with the exception of Malaysia are parties) and the International Covenant on Civil and Political Rights (to which Libya, Thailand, the United States and the United Kingdom are parties) and from the recognition in customary international law of its prohibition as a rule of jus cogens, a peremptory norm from which no derogation is permitted. While it is impermissible to draw consequences as to the jurisdictional competence of national courts from the jus cogens status of the prohibition on torture… it is appropriate to take account of the strength of this condemnation when considering the application of a rule of public policy….there is a compelling public interest in the investigation by the English courts of these very grave allegations. The only ground on which it could be contended that there is any exemption from the exercise of jurisdiction in the present case is because of the alleged involvement of other states and their officials in the conduct alleged. Notwithstanding our view that the present proceedings would entail an investigation of the legality of the conduct of those foreign officials, the fortuitous benefit the act of state doctrine might confer on the respondents is a further factor supporting the application of this public policy limitation.

I’d like to know whether this is the sort of issue on which Cameron would think that a British Human Rights Act should take the same, or a different, approach.

facebook ipo – what liability for nasdaq? August 23, 2012

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Evelyn Rusli at the NYTimes Dealbook links to Citigroup’s comment letter on Nasdaq’s proposed approach to remediate harms caused to market participants during the facebook ipo (comments were due yesterday). Citigroup argues that Nasdaq’s claim to benefit from immunity is incorrect because Nasdaq was acting in its business capacity rather than as an SRO. It also argues that Nasdaq was grossly negligent. And there are policy arguments also:

Nasdaq effectively takes the position that it should not have liability for its failings because the for-profit exchanges are too critically important to have to potentially stand up for their errors, while brokers who fail as a result of poor planning must pay for their failure. This is an unlevel playing field premised on an outdated construct of exchanges as bastions of market integrity, rather than the for-profit corporations that they are today.

SIFMA has made similar comments:

SIFMA is of the strong belief that Nasdaq did not act in an SRO capacity in carrying out the Facebook IPO. Rather, we believe Nasdaq was operating solely in its role as a for-profit market participant. In this regard, we note that Nasdaq received the Facebook listing, and its attendant listing fees, after a hard-fought competition with the New York Stock Exchange to gain Facebook’s listings business.

eesc opinion on how to involve civil society in financial regulation February 27, 2012

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The EESC announces that it is going to get more involved in discussions about financial regulation:

One of the difficulties in adopting rules in this field has been, and still is, how to ensure that differing and contradictory positions are given a balanced hearing within a pluralistic and democratic opinion-forming process. There is currently no effective counterweight from civil society organisations to the legitimate representation of the financial sector’s interests, and this asymmetry should be rectified in the new financial legislation.

And it urges the EU institutions and the Member States to act “to achieve wider involvement of civil society in the regulation of financial markets”.

some questions about self-regulation and compliance May 26, 2011

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Why, on recent flights between Miami and Newark, was it necessary for the pilot to threaten passengers that the flight would not be able to land or take off if they did not comply with instructions to turn off electronic devices (I know there’s controversy about whether this requirement is necessary but it is a requirement and non-compliance imposes costs on the passengers who do comply)?

Why is the SEC backdating documents (OIG Report stating the SEC’s Office of Administrative Services backdated a justification an approval of the SEC’s lease of premises)?

Is there a connection between citizens’ carelessness about paying attention to the rules and a regulatory agency’s carelessness about compliance with formalities? I suspect so.