Abstract
The faults in governance and ensuing corporate performance in two different eras, the 1980’s conglomeration and the 1990 stock price localations provide the basis for proposals that we believe will enable boards to monitor management more effectively in market downturns as well as upturns. We propose steps that will change lack of access to knowledge to ‘knew and acted’ on that knowledge.
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Footnotes
Corporate Governance Rule Proposals Reflecting Recommendations from the NYSE Corporate Accountability and Listing Standards Committee (16 August 2002, and subsequently revised 12 March 2003) available at http://www.nyse.com/pdfs/corp_gov_pro_b.pdf and at http://www.nyse.com/pdfs/2003–06fil.pdf, respectively. NASDAQ ‘Affected Marketplace Rules: 4200(a)(14), 4200(a)(15), 4350(c), 4350(d), and IM-4350–4’, 9 October 2002, and subsequently revised 17 March 2003 available at http://www.nasdaq.com/about/2002_141.pdf and http://www.nasdaq.com/about/SR-NASD-2002–141-FED-REG.pdf.
See William B. Chandler, III, and Leo E. Strine, Jr, ‘The New Federalism Of The American Corporate Governance System: Preliminary Reflections of Two Residents of one Small State’ (6 Jan. 2002), prepared for Penn Law and Economics Institute Conference on Control Transactions, 8–9 Feb. 2003 (draft), available at http://papers.ssrn.com/abstract=367720, at 37–44.
See, e.g., E. Norman Veasey, ‘Delaware Corporation Law Ethics and Federalism’, The Metropolitan Corporate Counsel, November 2002, 1; Ira M. Millstein and Paul W. MacAvoy, ‘The Active Board of Directors and Performance of the Large Publicly Traded Corporation’, Columbia Law Review, 98 (1998), 1,283; Chandler and Strine, ‘The New Federalism’, 4–5.
See E. Norman Veasey, ‘State—Federal Tension in Corporate Governance and the Professional Responsibilities of Advisors’, 20 Feb. 2003, 5–7; E. Norman Veasey, ‘Musings on the Dynamics of Corporate Governance Issues, Director Liability Concerns, Corporate Control Transactions, Ethics and Federalism’ (8 Feb. 2003), 20–3; E. Norman Veasey, ‘Reflections on Key Issues of the Professional Responsibilities of Corporate Lawyers in the Twenty-First Century’ (28 October 2002), 3.
See Chandler and Strine, ‘The New Federalism’, 40 and n. 74 (citing Sarbanes—Oxley Act at § 3(b)(1) and Patricia A. Vlahakis et al., Corporate Governance Reform (September/October 2002), 16. But see Sarbanes—Oxley § 306B (permitting private right of action to recover profits improperly obtained by insiders during pension fund black out periods) and, e.g., Sarbanes—Oxley § 302 (requiring that a company’s periodic reports include certain certifications by the CEO and CFO, which could provide the basis of a private action).
Leo E. Strine, Jr., ‘Derivative Impact? Some Early Reflections on the Corporation Law Implications of the Enron Debacle’, Business Lawyer, 57 (2002), 1,371, 1,385.
Adrian Cadbury, Corporate Governance and Chairmanship’ (Oxford University Press, 2002), 177–8.
Derek Higgs, Review of the Role and Effectiveness of Non-Executive Directors, 20 January 2003, 23.
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© 2003 Paul W. MacAvoy and Ira M. Millstein
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Millstein, I.M., MacAvoy, P.W. (2003). Proposals for Reform of Corporate Governance. In: The Recurrent Crisis in Corporate Governance. Palgrave Macmillan, London. https://doi.org/10.1057/9781403946881_7
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DOI: https://doi.org/10.1057/9781403946881_7
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