WAS THE DEAL WORTH IT: THE DILEMMA OF STATES WITH INEFFECTIVE ECONOMIC INCENTIVES PROGRAMS
Randle B. Pollard, 11 Hastings Bus. L. J. 1 (2015)
Federal subsidies to state and local governments have been substantially reduced due to public opinion prioritizing the reduction of the federal deficit, the recent "fiscal cliff" legislation, and the federal budget "sequester cuts." In addition, in many states, revenue collection from individual and corporate income tax is below prerecession levels. To address the reduction in federal funding and reduced revenue collections, state and local governments will increasingly rely on economic incentive programs to grow their economies through increased job creation and private capital investment within their jurisdictions. These economic incentive programs are no longer comprised of simple tax reductions for companies seeking expansion or relocation, but include financial incentives and direct investment programs. The cost of these incentives, both in expenditures and forgone tax revenue, represents a growing portion of state and local governments' budgets and may subject them to steep budget deficits if the incentives do not produce net economic growth.
Because of the budgetary risk and the increased reliance on these economic incentives, there is a need for state and local governments to account for the cost of these incentives and to measure their effectiveness. Effective state economic development requires growth in state economic activity that results in a net increase of revenue in relation to the cost of the incentives. To measure effectiveness, state and local governments must maintain reliable information on the cost of incentives, -institute mechanisms to limit or cap the costs of incentives, and hold businesses accountable for performing pursuant to incentive agreements.
GOODWILL AND THE EXCESSES OF CORPORATE POLITICAL SPENDING
David Rosenberg, 11 Hastings Bus. L. J. 29 (2015)
This article argues that legislation that provide "special rules" is not necessary because the business judgment rule should not be interpreted to protect corporate directors' decisions to donate to political campaigns in the same way that it protects ordinary corporate charitable contributions or decisions based on CSR. The rule protects donations in the public interest even if they are profit- sacrificing because courts are not in a position to judge whether or not a particular act of giving is designed to maximize profits or is simply an acceptable act of charity with no obvious financial benefit to the corporation itself. We ought to tolerate the latter both because we do not want courts evaluating a corporation's strategy to create goodwill in the community and because we have no reason to discourage true acts of altruism by American businesses. An act of political giving, however, seems to be based on only two possible motivations, one of which we should not tolerate. First, it might have a pure business purpose by helping to elect politicians whose policies will be favorable to the corporation. Second, it might reflect the self- interest of the corporate directors and officers. This self-interest might take the form of supporting certain politicians because they reflect the decision-makers' own views or because the decision- makers stand to gain from the politicians' policies. Alternatively, the self-interest might arise from the director or manager's hope of receiving a personal benefit in a quid pro quo for their support. Political donations do not seem to fit into a third category of pure philanthropy so often used to justify judicial resistance to reviewing charitable giving by corporations.
THE 2013 SYMPOSIUM ON CORPORATE GOVERNANCE IN JAPAN
David Makman, 11 Hastings Bus. L. J. 57 (2015)
The 2013 Symposium on Corporate Governance in Japan was organized by the University of California, Hastings College of the Law, the Japan Society of Northern California, and the Pacific Pension Institute. The goal was to provide a forum where academics and practitioners could meet to exchange information and ideas relating to corporate governance. The Japan Society of Northern California and Pacific Pension Institute have been covering corporate governance issues together since 2001, and have held several conferences on the issue. The Symposium was the first joint program with the University of California, Hastings College of the Law in this area. In this article, the author discusses the background and structure of the symposium and provides an introduction to the papers that are presented in this issue of the journal.
CORPORATE GOVERNANCE IN JAPANESE LAW: RECENT TRENDS AND ISSUES
Hideki Kanda, 11 Hastings Bus. L. J. 69 (2015)
This article discusses recent trends and issues concerning corporate governance in Japanese law. The purpose of this article is to offer brief overviews on selected topics, including empirical studies, recent scandals, board structure, rule making by the stock exchange, disclosure rules under Japanese securities regulation, and the forthcoming reform of Japanese corporate law.
JAPANESE CORPORATE GOVERNANCE REFORM: A COMPARATIVE PERSPECTIVE
Bruce E. Aronson, 11 Hastings Bus. L. J. 85 (2015)
Japan has been widely criticized as being slow to reform a corporate governance system that seemingly remains fixed on the interests of employees over shareholdersand unresponsive to recent global trends such as the spreadof fidependent directors.This article seeks to present a more nuancedand balanced view of the ongoing evolution of Japanese corporate governance.
This article discusses how analysis of Japanese corporate governance is hamperedby the lackofboth anagreed-uponstandard for evaluating change in Japan and data concerning important governancepractices,such as the actualrole of company auditors (kansayaku). The main focus, however, is on describing and evaluating experimentation at leading individual Japanese companies that seeks to address monitoring and other fundamental issues of corporategovernance in Japan by de veloping a "hybrid"system of governance. This system attempts to combine the best elements of the board management and monitoring models, i.e., the information access of insiders and the independence of outsiders,in a way that results in real board discussion and management oversight.
The article goes on to identify and briefly discuss three key issues that may be critical in influencing the future direction of Japan's corporate governance system and practices: the role of domestic institutional investors, the development of a standardized hybrid model, and the adjustment of Japanesecorporategovernance to the demands ofglobalization.
A SOFTWARE PATENT WAR: THE EFFECTS OF PATENT TROLLS ON STARTUP COMPANIES, INNOVATION, AND ENTREPRENEURSHIP
Sonia Karakashian, 11 Hastings Bus. L. J. 119 (2015)
This note analyzes the effects of patent trolls on startup companies and the issues that software patentability under 35 U.S.C. § 101 impose on this highly controversial area of intellectual property. This note elaborates on the current patent reforms as well as the common law struggles addressed in Supreme Court decisions. Further, it discusses the software patent war and the controversial issues raised in § 101 of the patent system followed by the issues of patentability and its effects on startup companies. Lastly, this note discusses short-term and long-term progress in the patent system, as well as address the current state of the law today. This note comes to the conclusion that although issues of patentability and protecting companies from patent trolls may be raised in the Supreme Court, the solution ultimately lies in the hands of the legislature.
THE LONG TAIL AND DEMAND CREATION IN THE LEGAL MARKETPLACE
Kristen E. Killian, 11 Hastings Bus. L. J. 157 (2015)
This note examines new legal technology companies that are innovating transactional legal products, but not legal services. Legal Tech Innovation Companies (LTICs) represent an innovative leap in how companies that are not law firms provide legal products directly to a consumer. Although these companies are not yet disrupting the core of the legal marketplace, they are meaningfully lowering cost and increasing efficiency through both simplification and speed.
This note describes the type of legal consumers for whom LTICs are creating demand for their legal products and discusses several LTICs in greater detail. It further addresses policy considerations for the transactional legal product and creation of demand. Lastly, this note concludes with some projections for the legal profession in this burgeoning environment of legal technology innovation.
PRIVACY: AN ISSUE OF PRIORITY
Stephanie Segovia, 11 Hastings Bus. L. J. 193 (2015)
This note highlights the competing stakes in the online privacy debate. It provides an overview of the U.S. business model of companies that participate in data gathering and analysis, and why they do so (namely because of the emergence of Big Data technologies), and discusses examples of how online privacy has eroded in recent years, in turn highlighting the need for federal action. This note also discusses the current status quo of online privacy in America, and why current legislation is inadequate to address online privacy issues. It further includes a discussion of why the U.S. should let the new EU Directive be a guide for establishing its own comprehensive privacy protection framework, and concludes with an analysis of the most important principles that can be taken from the EU Directive. Additionally, strategies are discussed on how to incentivize companies to engage in beneficial research for the entire industry that could make the transition of complying with the new online privacy regulations more manageable.