Despite the large infusion of capital into the financial sector and low interest rates, the flow of financing to operating firms has failed to return to normal levels. One explanation suggested is that banks still lack confidence because they need time to adjust to the new environment. Another...

This paper develops a model of a self-fulfilling credit market freeze and uses it to study alternative governmental responses to such a crisis. We study an economy in which operating firms are interdependent, with their success depending on the ability of other operating firms to obtain...

The correlation between governance indices and abnormal returns documented for 1990–1999 subsequently disappeared. The correlation and its disappearance are both due to market participants' gradually learning to appreciate the difference between good-governance and poor-governance firms....

Researchers and shareholder advisers have devoted much attention to developing metrics for assessing the governance of public companies around the world. These important and influential efforts, we argue, suffer from a basic shortcoming. The impact of many key governance arrangements depends...

This paper analyzes the history of federal intervention in corporate law and draws from it lessons for the future. We show that federal intervention has generally not alternated between tightening state law restrictions on corporate insiders and relaxing them. Rather, federal law has...

The Business Roundtable has played a key role in the opposition to the SEC shareholder access proposal. While the strong resistance to the proposal has been thus far successful in discouraging the SEC from adopting it, this paper considers the merits of the Business Roundtable's substantive...

We investigate which provisions, among a set of twenty-four governance provisions followed by the Investor Responsibility Research Center (IRRC), are correlated with firm value and stockholder returns. Based on this analysis, we put forward an entrenchment index based on six provisions - four...

This paper examines the specific features of the shareholder access rule recently proposed by the Securities and Exchange Commission. I suggest that, even accepting the Commission's generally cautious approach and its desire to limit shareholder access to cases where the need for it is evident,...

This paper contains the edited transcripts of the Symposium on Corporate Elections held at Harvard Law School in October 2003. The symposium brought together SEC officials, CEOs, directors, institutional investors, money managers, shareholder activists, lawyers, judges, academics, and others to...

The SEC is now considering a proposal to require some public companies to include in their proxy materials candidates for the board nominated by shareholders. I document that incumbents do not currently face any meaningful risk of being replaced via the ballot box, and I argue that providing...