The latest issue of the UCLA Lawyer magazine has a series of Q&As with yours truly about my book Corporate Governance after the Financial Crisis
In his new book, Corporate Governance after the Financial Crisis (Oxford University Press, 2012), William D. Warren Distinguished Professor of Law Stephen Bainbridge proves expert at turning conventional wisdom on its head. His argument—that federalizing corporate governance impinges on state sovereignty, hobbles corporate efficiency and shortchanges both investors and the American taxpayer—advances a critical dialogue about the limits of crisis- driven public policy. Professor Bainbridge offers an incisive analysis of the landscape-altering Sarbanes-Oxley and Dodd-Frank acts, responses to the near-cataclysmic economic downturns of the last decade. By crystallizing the connection between federal intervention and bad public policy, he makes a strong case for the need for smart corporate governance reform.
Professor Bainbridge, who joined the UCLA Law faculty in 1997 and has been named one of the 100 most influential people in the field of corporate governance, is a renowned teacher and scholar whose expertise includes the law and economics of public corporations.
Q: How do you define “quack” corporate governance laws or regulations?
A: Unwise federal laws or SEC rules that meet these criteria: (1) The law was supported by a powerful interest group coalition, which used a financial crisis such as the post-Lehman Bros. credit crunch in 2007-2008 to achieve longstanding policy goals essentially unrelated to the causes or consequences of the financial crisis. (2) The new law or rule lacks strong empirical or theoretical justification. To the contrary, there are theoretical and empirical reasons to believe that each is bad public policy. (3) The new law or rule erodes the system of competitive federalism that is the unique genius of American corporate law by displacing state regulation with federal law.
