As part of a continuing series on Fall 2018 semester courses that relate to innovation and business, this post spotlights Corporate Governance & Control.
“In recent years, we’ve seen the increasing appearance of corporations in the public space, which speaks to the broadening role of corporations in society,” said Professor Gregory Shill. “In the 18 months since the presidential election, there’s been even greater interest in how businesses operate with respect to social values. More and more, investors are putting pressure on companies to diversify their boards and workforces, improve sustainability, take claims of sexual misconduct seriously, and otherwise reflect expectations that relate to economic value but go beyond economics alone.”
In Corporate Governance & Control, Professor Shill aims to help students develop “a deeper sense of how economic and social debates play out in realm of public companies, which have never been more powerful and continue to dominate the headlines.”
One prominent example of corporate responses that has manifested over the last few months is the “March For Our Lives” movement.
“Just the other day, investment management company BlackRock announced it was creating two new funds that will exclude gun manufacturers and retailers from the portfolios of people who do not want to invest in those kinds of companies,” said Professor Shill. “This is a response to investor demand, and will likely reverberate beyond the entities involved. It is just one example of what we might consider corporate governance, broadly speaking, in action.”
Corporate Governance & Control will speak to students interested in the intersection of investing and corporations, as well as social and political issues that markets now concern themselves with. This will include an exploration of “the duties that managers and boards of directors owe shareholders, as well as the rights shareholders have to ensure fidelity to those duties,” said Professor Shill.
The course will also appeal to students who are generally interested in corporate law and learning about the processes that determine how corporations are governed. For those intending to do corporate work or litigation, it will help to gain a “deeper theoretical and practical grounding in the rules and norms that structure relationships between corporations and their shareholders.”
The other main thrust of the course will be an exploration of battles for the opportunity to set the agenda of the corporation. These take varied forms. Those who have taken Business Associations will be somewhat familiar with proxy fights and shareholder activism by socially-conscious investors (remember the foie gras case?), but Professor Shill’s Corporate Governance & Control course will take a close look at activism by hedge funds as well.
“In the last 10 to 15 years, there’s been growing interest in the category of financially motivated activism,” explained Professor Shill. “For example, a hedge fund may buy up 3–5% of a company’s shares and then use that as leverage to influence the company. It may take the form of launching a campaign to pressure the board to make a corporate policy change, fire the CEO, or elect a couple new directors to the board. It is a strategy that has become a huge force in capital markets.”
Business Associations is the only prerequisite for the course. Students would also find Securities Regulation and Corporate Finance useful complements to the material they will cover in Corporate Governance & Control, and vice versa.
The course material will include a mix of academic articles, articles from the financial press, and guidance from law firms and other market participants active in this space.
Assignments will include preparing response papers and discussion questions, as well as active class participation. Students taking Corporate Governance & Control will have the option of writing a 20-page seminar paper, in addition to the regular response papers, to earn a total of four credit hours, including one writing credit. Those choosing not to write the paper will earn three credit hours.
Tuesday, 4:30 – 6:30 pm