Showing 9 of 16 Publications in ESG

Lessons to Learn From University Presidents

Popular Media What will come of the presidents of three of America’s most prestigious universities being called on the congressional carpet to explain their responses to Hamas’ . . .

What will come of the presidents of three of America’s most prestigious universities being called on the congressional carpet to explain their responses to Hamas’ brutal assault on innocent Israelis?

Will the resignations of University of Pennsylvania President Liz Magill and Harvard President Claudine Gay mark a turning point for American higher education? Will the leaders of other colleges and universities be encouraged to reflect on how far their institutions have strayed from their historic missions — namely, the pursuit of truth and dissemination of knowledge?

Not if the lesson learned is implementing the policies implicit in the legislators’ questions.

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Innovation & the New Economy

A Consumer-Welfare-Centric Reform Agenda for the Federal Trade Commission

TOTM As we approach a presidential election year, it is time to begin developing a  comprehensive reform agenda for the Federal Trade Commission (FTC). In that . . .

As we approach a presidential election year, it is time to begin developing a  comprehensive reform agenda for the Federal Trade Commission (FTC). In that spirit, this post proposes 12 reforms that could be implemented by new leadership, either through unilateral action by a new chair or (in some cases) majority votes of the commission.

Read the full piece here.

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Antitrust & Consumer Protection

Mandated Emissions Disclosures: the Bad Exceeds the Good

Popular Media Investors, customers, and employees are increasingly interested in evaluating firms’ environmental impact. This is good news. We are all better off when companies are accountable . . .

Investors, customers, and employees are increasingly interested in evaluating firms’ environmental impact. This is good news. We are all better off when companies are accountable for their actions. Seizing on this trend, the SEC has a pending proposal to mandate disclosure of companies’ carbon emissions and Governor Newsom has committed to signing a bill that does the same in California. This is bad news. Mandatory disclosures will do more harm than good.

Read the full piece here.

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Financial Regulation & Corporate Governance

Restoring the Rule of Law in Finance

Scholarship The unraveling of the rule of law in finance is inherent in the system’s discretionary process of regulation. Each financial crisis begets new regulations and . . .

The unraveling of the rule of law in finance is inherent in the system’s discretionary process of regulation. Each financial crisis begets new regulations and new regulatory agencies with more expansive and discretionary powers. The general entanglement of finance, leftist interest groups, and the federal regulatory apparatus has created a threat to freedom that is almost unique in history. Leftist activists, “woke” corporations, and regulators and politicians have recognized and acted on the opportunity to use the financial regulatory system both to enact preferred policies through anti-democratic means and to silence their ideological opponents. As governmental power grows, the threat of its misuse grows concomitantly.

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Financial Regulation & Corporate Governance

Stakeholder Capitalism: Theft, Path to Central Planning, or Both?

Scholarship Abstract Stakeholder capitalism is being pushed both by ideological partisans who have little respect for ownership rights and, perhaps worse, by those who would benefit . . .

Abstract

Stakeholder capitalism is being pushed both by ideological partisans who have little respect for ownership rights and, perhaps worse, by those who would benefit financially from more exclusionary capital markets. Moreover, the managerial incentives created by environmental, social, and governance (ESG) initiatives are likely to hurt all constituencies to the benefit of managers who are charged with overseeing their implementation. Still further, the ESG movement is poised to create a toxic mix of government and business, the end result of which will be the broad destruction of social value and a decline in human flourishing.
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Financial Regulation & Corporate Governance

Why Do Companies Go Woke?

Scholarship Abstract “Woke” companies are those that are committed to socially progressive causes, with a particular focus on diversity, equity, and inclusion as these terms are . . .

Abstract

“Woke” companies are those that are committed to socially progressive causes, with a particular focus on diversity, equity, and inclusion as these terms are understood through the lens of critical theory. There is little evidence of systematic support for woke ideas among executives and the population at large, and going woke does not appear to improve company performance. Why, then are so many firms embracing woke policies and attitudes? We suggest that going woke is an emergent strategy that is largely shaped by middle managers rather than owners, top managers, or employees. We build on theories from agency theory, institutional theory, and intra-organizational ecology to argue that wokeness arises from middle managers and support personnel using their delegated responsibility and specialist status to engage in woke internal advocacy, which may increase their influence and job security. Broader social and cultural trends tend to reinforce this process. We discuss implications for organizational behavior and performance including perceived corporate hypocrisy (“woke-washing”), the potential loss of creativity from restricting viewpoint diversity, and the need for companies to keep up with a constantly changing cultural landscape.

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Financial Regulation & Corporate Governance

The Economy Doesn’t Need a Reset, and Neither Does Management Theory

Scholarship Abstract Policymakers, commentators, and academics have called for a Great Reset, a deepseated overhaul of the organization of the global economy. Some suggest that management . . .

Abstract

Policymakers, commentators, and academics have called for a Great Reset, a deepseated overhaul of the organization of the global economy. Some suggest that management theory needs a reset of its own. We argue that Great Reset proponents fail to appreciate the power of markets to bring about desirable social outcomes and are overly sanguine about what governments can do to alleviate alleged market failures. These views also drive the increasing enthusiasm for stakeholder governance, an increased government role in innovation, and the call for new metrics for assessing outcomes, all part of the Great Reset narrative. And yet, concentrating more decision power in the hands of governments, implementing diffuse metrics, and diluting effective ownership can hamper the functioning of markets, encourage crony capitalism, and reduce the resources that are available for dealing with grand challenges. Existing management theory provides powerful tools for understanding the benefits and costs of alternative institutional arrangements; abandoning these tools will push management theory to the sideline in policy debates.

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Financial Regulation & Corporate Governance

Lovers of Internal Combustion Engines Should Perhaps Be Nervous

Popular Media Teaching the economics of innovation to college students isn’t a tough job. They understand intuitively that pro-competitive policy maximizes their ability to choose the best . . .

Teaching the economics of innovation to college students isn’t a tough job. They understand intuitively that pro-competitive policy maximizes their ability to choose the best product for them. More options for consumers leads to opportunities to optimize their choices. If the cost of one option is too high, for whatever reason, consumers can choose something else.

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Innovation & the New Economy

The Internet Association’s vision for the future looks a lot like the past

TOTM Last week, the Internet Association (“IA”) — a trade group representing some of America’s most dynamic and fastest growing tech companies, including the likes of . . .

Last week, the Internet Association (“IA”) — a trade group representing some of America’s most dynamic and fastest growing tech companies, including the likes of Google, Facebook, Amazon, and eBay — presented the incoming Trump Administration with a ten page policy paper entitled “Policy Roadmap for New Administration, Congress.”

The document’s content is not surprising, given its source: It is, in essence, a summary of the trade association’s members’ preferred policy positions, none of which is new or newly relevant. Which is fine, in principle; lobbying on behalf of members is what trade associations do — although we should be somewhat skeptical of a policy document that purports to represent the broader social welfare while it advocates for members’ preferred policies.

Read the full piece here.

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Intellectual Property & Licensing