The federalization of corporate governance / Marc I. Steinberg.
2018
KF1422 .S74 2018 (Map It)
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Author
Title
The federalization of corporate governance / Marc I. Steinberg.
Published
New York, NY : Oxford University Press, [2018]
Call Number
KF1422 .S74 2018
ISBN
9780199934546 hardcover ; alkaline paper
0199934541 hardcover ; alkaline paper
0199934541 hardcover ; alkaline paper
Description
xvii, 309 pages ; 25 cm
System Control No.
(OCoLC)1001564063
Summary
"This book focuses on the federalization of corporate governance in the United States from both historical and contemporary perspectives. Although the states traditionally have regulated the sphere of corporate governance - encompassing the relations among and between the subject corporation, its directors, its officers, its stockholders, and other stakeholders - federal law today impacts the governance of publicly-traded companies to a greater degree than ever before in U.S. history. This book discusses the evolution and development of corporate governance from a federal law perspective from the commencement of the twentieth century to the present. It examines the tension between state company law and federal law, analyzes the federal historical developments, explains the ramifications of the federal legislation enacted during the past two decades, and recommends corrective measures that should be implemented. The book accordingly provides an original, historical, and contemporary analysis of the federalization of corporate governance - a subject that impacts this country's economic well-being in a very fundamental way." -- Publisher's website.
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Gift
Purchased from the income of the Edith L. Fisch Fund
Gift
The Arthur W. Diamond Law Library
Purchased from the income of the Edith L. Fisch Fund
Table of Contents
About the Author
xv
Acknowledgments
xvii
1.
Evolutionary Process---The Federalization of Corporate Governance
1
I.
Introduction
1
II.
State Corporate Law Impacting Corporate Governance
6
A.
Governance of the Corporate Enterprise
7
B.
Fiduciary Duties of Corporate Directors and Officers
11
C.
Use of Defensive Tactics in Takeover Bids
16
D.
Anti-Takeover, Stakeholder, and Related Statutes
17
E.
Summation
19
III.
Federal Law Impacting Corporate Governance
20
IV.
Focus of This Book
24
2.
Twentieth Century Legislative Proposals---Federal Incorporation and Related Efforts
25
I.
Introduction
25
II.
Height of Interest in Federal Incorporation (1903--1914)
28
A.
1903 Bill---House of Representatives---H.R. 66
29
B.
1904 Bill---House of Representatives---H.R. 8883
31
C.
1905 Bill---Senate---S. 6238
32
D.
1906 Bill---House of Representatives---H.R. 10704
33
E.
1905 Bill---House of Representatives---H.R. 473
36
F.
1906 Bill---Senate---S. 6287
37
G.
1907 Bill---Senate---S. 383
41
H.
1908 Bill---Senate---S. 4874
43
I.
1908 Bill---House of Representatives---H.R. 19745
46
J.
Taft-Wickersham Bill of 1910---House of Representatives and Senate---H.R. 20142 and S. 6186
48
K.
1911 Bill---Senate---S. 1377
51
L.
1911 Bill---House of Representatives---H.R. 12809
52
M.
1912 Bill---House of Representatives---H.R. 17932
54
N.
1912 Bill---House of Representatives---H.R. 18662
56
O.
1912 Bill---House of Representatives---H.R. 26414
58
P.
1912 Bill---House of Representatives---H.R. 26415
60
Q.
1913 Bill---House of Representatives---H.R. 2488
63
R.
1913 Bill---House of Representatives---H.R. 1890
64
S.
1913 Bill---Senate---S. 1617
65
T.
1913 Bills---House of Representatives---H.R. 11167 and H.R. 11168
66
U.
1914 Bill---Senate---S. 4647
68
III.
Establishment of the Federal Trade Commission and Subsequent Legislative Proposals (1914--1930)
71
A.
1917 Bill---House of Representatives---H.R. 315
71
B.
1917 Bill---House of Representatives---H.R. 4425
72
C.
1919 Bill---House of Representatives---H.R. 1186
72
D.
1919 Bill---Senate---S. 2754
73
E.
1921 Bill---Senate---S. 1612
75
F.
1930 Bill---Senate---S. 2847
76
G.
1930 Bill---House of Representatives---H.R. 12810
76
IV.
Re-Emergence of Corporate Governance Legislative Proposals
77
V.
Modern Day Relevance
79
A.
Subsequent Legislation
79
B.
Judicial Action
83
VI.
Conclusion
84
Appendix I
85
A.
First Attempt---H.R. 66 (1903)
85
B.
S. 1612---Amendment to the Clayton Act (1921)
88
C.
Voluntary Pre-Approval of Contracts---H.R. 19745 (1905)
90
D.
State Registration---H.R. 8883 (1904) and S. 1377 (1911)
92
E.
Voluntary Federal Incorporation---Taft-Wickersham Bills---H.R. 20142 and S. 6186 (1910)
92
Appendix II
98
A.
Quotes of the Commissioner of Corporations, James R. Garfield
98
B.
Quotes of Attorney General George Wickersham
99
C.
Quotes of President William Howard Taft
99
Appendix III
100
A.
Quotes from Senator Howard M. Metzenbaum's Opening Statement, The Hearing Before the Subcommittee on Securities of the Committee on Banking, Housing, and Urban Affairs
100
B.
Quotes of the Advisory Committee on Corporate Governance
108
3.
SEC's Impact on the Federalization of Corporate Governance---A Traditional Perspective
113
I.
Introduction
113
II.
Insider Trading---Regulating Securities Trading by Corporate Fiduciaries and Their Tippees
115
A.
Section 16 of the Securities Exchange Act
116
B.
Emergence of a Broad Federal Insider Trading Prohibition---Section 10(b) and Rule iob-5
120
C.
SEC's Activism in the Insider Trading Corporate Governance Context
125
1.
Tender Offer Insider Trading---A Return to Yesteryear
125
2.
Regulation FD---Solving the "Loose-Lip" Executive Dilemma
128
3.
Sanctity of Family Relationships
131
III.
Qualitative Materiality---Seeking to Impact Normative Fiduciary Conduct Through the Guise of Disclosure
133
IV.
Rebounding from a Failed Attempt to Create Federal Minimum Standards
136
A.
SEC's Response---Disclosure of "Fairness"
138
B.
Recognition of a Federal Claim Based on State Law
138
V.
Federal Tender Offer Regimen---Composing the Rule Book
140
VI.
SEC's Impact on Corporate Governance by Means of "Undertakings"
142
VII.
SEC Enforcement Actions Against Officers and Directors
146
VIII.
Focusing on "Gatekeepers"---Accountants and Attorneys
148
IX.
Conclusion
156
4.
SEC's Shareholder Proposal Rule and Related Developments
157
I.
Introduction
157
II.
Rule 14a-8---General Framework
160
III.
Issues Voted Upon in Shareholder Proposals
163
A.
Utilizing Rule 14a-8 for Social Issues
163
B.
Utilizing Rule 14a-8 for Board Declassification Proposals
178
C.
Utilizing Rule 14a-8 for Say-on-Pay
179
D.
Utilizing Rule 14-a-8 for Golden Parachutes
183
E.
Rule 14a-11---Proxy Access
184
IV.
Conclusion
190
5.
SOX and Dodd-Frank Acts---Modern Federal Corporate Governance Initiatives
191
I.
Sarbanes-Oxley and Dodd-Frank Acts---Entrenchment of Federal Corporate Governance
191
II.
Key Provisions of the SOX and Dodd-Frank Acts
193
A.
CEO and CFO Certifications
193
B.
Audit Committees
195
C.
Executive Clawback Provisions
200
1.
Sarbanes-Oxley [§] 304
201
2.
Dodd-Frank [§] 954
201
D.
Equitable Relief
203
E.
Officer and Director Bars
204
F.
Insider Trading During Blackout Periods
204
G.
Director Independence
205
H.
Leadership Structure
207
I.
Independent Compensation Committees
208
J.
Nominating Committees
210
K.
"Federalizing" Corporate Codes of Ethics
213
L.
Bifurcation Disclosure: CEO and Board of Directors' Chair Roles
216
M.
Say-on-Pay and Golden Parachutes---Advisory Votes
217
1.
"Say on Pay"
217
2.
"Golden Parachutes"
218
N.
Internal Pay Equity Disclosure
219
O.
Pay versus Performance Disclosure
220
P.
Loans to Insiders
221
Q.
Equitable Relief and Money Penalties
222
III.
Conclusion
224
6.
Impact of Stock Exchange Rules on the Federalization of Corporate Governance
225
I.
Introduction
225
II.
Overview of Stock Exchange Regulation Impacting Corporate Governance
225
III.
Focus on Independent Directors
231
IV.
Recognition of Audit Committees Comprised of Independent Directors
239
V.
Establishment of Compensation Committees Composed of Independent Directors
247
VI.
Emergence of Nominating/Corporate Governance Committees Comprised of Independent Directors
253
VII.
Emergence and Codification of Corporate Codes of Ethics
258
VIII.
Conclusion
262
7.
Unresolved Business: Federal Corporate Governance Enhancements
263
I.
Introduction
263
II.
Undue Deference by Federal Courts to State Law
264
III.
Tender Offer Tactics---Federal Law Should Apply
265
IV.
Need for a Federal Statute on Insider Trading
270
V.
Sentinel's Lax Surveillance---The SEC and Missed Opportunities
274
A.
"Current" Disclosure Regime
275
B.
Failure to Invoke Standards of Professional Conduct for Attorneys
278
C.
SEC's Neglect When Invoking Its Statutory Resources
282
VI.
Conclusion
284
8.
Future Federalization of Corporate Governance
285
I.
Introduction
285
II.
Evolution of the Federalization of Corporate Governance
285
III.
Foretelling the Future of the Federalization of Corporate Governance
289
IV.
Conclusion
293
Index
295