Kaleb Byars (University of South Carolina – Joseph F. Rice School of Law) has posted The Shareholder “Say on Crime” Vote (Arizona State Law Journal, forthcoming) on SSRN. Here is the abstract:
Today’s corporate plea agreements and other criminal resolutions look more like corporate charter amendments than criminal settlement devices. These resolutions require compliance reform that impacts the corporate treasury. They require business reform that alters core corporate operations and purpose. They even require structural reform that alters the fabric of corporate management, replacing directors, officers, and owners. Even when managers are not replaced, resolutions cabin their discretion. Along the way, resolutions devastate shareholders’ financial and governance rights and stakeholders’ interests. Invasive corporate governance terms and the harm that resolutions cause have prompted Congressional attention and scholarly literature, but proposed solutions fail to account fully for shareholders’ and stakeholders’ rights.
This article makes three contributions. First, this article provides a novel dataset and a corresponding statistical analysis demonstrating that shareholders do not currently provide input on corporate criminal resolutions. Second, this article offers normative support for the position that shareholders should have the right to provide input on resolutions to protect their governance rights, advocate for stakeholders’ interests, promote fiduciary accountability, and enhance systemic legitimacy. Finally, this article provides a practical framework that Congress may adopt to enact a statutory “Say on Crime” vote, permitting shareholders to cast precatory (i.e., non-binding) votes on resolutions.
Recommended!
To receive new posts from Legal Theory Blog by email, get a free subscription to Legal Theory Stack.
Lawrence Solum