I'm supposed to be in Minneapolis Friday today to present my paper Dodd-Frank: Quack Federal Corporate Governance Round II at the Minnesota Law Review's symposium on Government Ethics and Bailouts: The Past, Present, and Future. Unfortunately, my back problems have made flying extremely unpleasant, so they kindly are allowing me to stay home and participate via video-conferencing. The symposium is being webcast from the law review's web page at this link if you want to watch. I'm scheduled to be on the panel that starts at 1:50 PM Central time if you care to check out my performance.
Here's the abstract for my paper:
In 2005, Roberta Romano famously described the Sarbanes-Oxley Act as “quack corporate governance.” In this article, Professor Stephen Bainbridge argues that the corporate governance provisions of the Dodd-Frank Act of 2010 also qualify for that sobriquet.
The article identifies 8 attributes of quack corporate governance regulation: (1) The new law is a bubble act, enacted in response to a major negative economic event. (2) It is enacted in a crisis environment. (3) It is a response to a populist backlash against corporations and/or markets. (4) It is adopted at the federal rather than state level. (5) It transfers power from the states to the federal government. (6) Interest groups that are strong at the federal level but weak at the Delaware level support it. (7) Typically, it is not a novel proposal, but rather a longstanding agenda item of some powerful interest group. (8) The empirical evidence cited in support of the proposal is, at best, mixed and often shows the proposal to be unwise.
All of Dodd-Frank meets the first four criteria. It was enacted in the wake of a massive populist backlash motivated by one of the worst economic crises in modern history. As the article explains in detail, the corporate governance provisions each satisfy all or substantially all of the remaining criteria.
Here's the complete program for the symposium:
Friday, October 15, 2010
8:00 – 8:15 Registration
8:15 – 8:25 Welcome by Dean David Wippman
8:25 – 10:10 Panel: The Past: Did Capitalism Fail?
Robert Hoyt: Ethics in a Time of Crisis
William Black: Capitalism is Criminogenic
Jeffrey Lipshaw: Capitalism Didn’t Fail, But the Metaphors Got a C
Moderator: Prentiss Cox
10:10 – 10:25 Break
10:25 – 12:25 Panel: The Present: The Ethics of Government Bailouts of Private Industry in a Free Market System
Paul Atkins: I Can See Clearly Now the Rain is Gone: Transparency as a Fundamental Regulatory Principle
Jack Katz: Who Were the Real Beneficiaries of the Bailout?
Kathleen Clark: Conflicts of Interest in Bailout Contracting: Unlearned Lessons from the S&L Bailout
Richard Painter: Why Worry About Tomorrow?: How Conflicts of Interest Erode Personal Responsibility in Government and Banking
Moderator: Claire Hill
12:25 – 1:50 Lunch
Keynote Address by Commissioner Troy Paredes
1:50 – 3:35 Panel: The Future: Long-Term Ramifications of Government Bailouts
Lisa Fairfax: Government Governance?: Reconciling Government Bailouts, Corporate Governance, and Directors’ Fiduciary Duties
Steven Davidoff: Uncomfortable Embrace: Federal Corporate Ownership in the Midst of the Financial Crisis
Stephen Bainbridge: Dodd-Frank: Quack Federal Corporate Governance Round II
Moderator: Brett McDonnell
3:35 – 3:55 Closing Remarks by Brett McDonnell
3:55 Adjourn
