Robert Teitelman at The Huffington Post:
In his new book, Corporate Governance after the Financial Crisis, UCLA law professor and popular blogger Stephen Bainbridge provides a longer historical perspective on one aspect of this choking proliferation of rulemaking. (The book doesn't mention his blog,ProfessorBainbridge.com, in his bio, which is interesting.) The title of the book is mildly misleading. While Bainbridge is describing how we got to what he calls "quack corporate governance" after the financial crisis, he is really dealing with the post-2000 period, when Congress reflexively reacted to the Enron and WorldCom scandals with Sarbanes-Oxley, a significant increase in micro-managing boards and managers, and, after 2008, with Dodd-Frank. Bainbridge is pursuing several important themes here. He is skeptical of the so-called monitoring model of governance's ability to function effectively and argues that the model's inherent limitations have created a frenzy of federal rulemaking that attempts to "fix" it. He identifies "quack" corporate governance by several tendencies: lobbying by special interest, usually activist investors, or "policy entrepreneurs pursuing an agenda unrelated to the financial crisis"; very little empirical support as to effectiveness; and a strong impulse toward federalization through specific rulemaking, which has tended over time to expand the power of the federal government in corporate law over state courts, meaning mostly Delaware.
Bainbridge writes clearly, but this is not a book for non-lawyers or for those who (happily, perhaps) haven't spent much time mired in the governance wars. Although this "quack" label does add a polemical edge, he also provides a considerable amount of fairly straight discussion of the details of Sarbanes-Oxley and Dodd-Frank, on say-on-pay, proxy access and compensation, not to say the rise of the shareholder-monitoring mod
Actually, I think it is accessible enough for non-lawyers, but that's just me. As for not mentioning the blog, that was an oversight. And I didn;t pick the title, the marketing folks did.
Anyway, it's a very fair and thoughtful review.
