Conventional wisdom holds that corporations should maximize shareholder value. In her new book “The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public” (Berrett-Koehler, 2012), Lynn Stout argues that this is a harmful myth. According to Stout, shareholder value thinking leads managers to focus exclusively on short-term earnings to the detriment of investors, corporations, and the public. 

According to Jon Macey, however, while shareholder value maximization may be a myth, it helpfully constrains corporate managers. Leaving corporate managers with unconstrained choices — the real result of Stout's argument — would be far more dangerous.    

Join Macey and Stout as they debate shareholder value thinking and its implications for the corporate community, public policy arena, and public.

Panelists:

• Lynn Stout, Cornell Law School
• Jon Macey, Yale Law School
• Moderator: Alex Pollock, AEI
• Introduction: Hon. Lee Liberman Otis, Senior Vice President & Faculty Division Director, The Federalist Society

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An increase in Federal executive branch regulatory activity – whether through executive order, formal or informal administrative agency action – has been noted by many across the country. In launching the Executive Branch Review Project, the Practice Groups of the Federalist Society seek to prompt a national debate about whether there has been an uptick in such regulatory activity, and, if so, with what consequence. The project will provide objective resources that identify major government activity, and will provide a forum for debate and discussion about whether such regulation constitutes a form of legal and regulatory overreach. The first component of this project is a new blog dedicated to highlighting action or inaction by the executive branch, http://www.executivebranchproject.com/.

To kickoff this new endeavor, U.S. Senator Michael S. Lee (Utah) and Federalist Society founder and Vice Chairman David M. McIntosh discussed the project and provided their perspectives on the use of executive power.

Featuring:

• Hon. Michael S. Lee, United States Senate, Utah
• Hon. David M. McIntosh, Partner, Mayer Brown LLP and Vice Chairman, The Federalist Society
• Moderator: Mr. Dean A. Reuter, Vice President & Director of Practice Groups, The Federalist Society

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Why did the financial scandals really happen? Why are they continuing to happen? In The Death of Corporate Reputation, Yale's Jonathan Macey reveals the real, non-intuitive reason, and offers a new path forward. For over a century law firms, investment banks, accounting firms, credit rating agencies and companies seeking regular access to U.S. capital markets made large investments in their reputations. They treated customers well and sometimes endured losses in transactions or business deals in order to sustain and nurture their reputations as faithful brokers and “gate-keepers.” This has changed completely. The existing business model among leading participants in today’s capital markets no longer treats customers as valued clients whose trust must be earned and nurtured, but as one-off “counter-parties” to whom no duties are owed and no loyalty is required. The rough and tumble norms of the market-place have replaced the long-standing reputational model in U.S. finance. This podcast is a recording of a previously held conference call and has not been edited for sound quality.

Featuring:

• Prof. Jonathan R. Macey, Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School
• Moderator: Mr. Christian Corrigan, Director of Publications, The Federalist Society

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