Corporations and Capital Markets Evolution
The fifth Deals Roundtable, entitled “Corporations and Capital Markets Evolution,” was held on April 13, 2007. The Roundtable brought together leading judges, regulators, attorneys, investors, and academics to discuss recent changes in the capital markets and their impact on traditional concepts of corporate governance and structure.
Topics of discussion included how courts should address changes in the capital markets and their impact on corporations, the risk-bearing role of public equity and the traditional model of the large corporation, how the greater informativeness of stock market prices has reinforced the role of independent directors in assessing management, and how U.S. policymakers should respond to growing concerns about the perceived competitive disadvantages of the U.S. capital markets.
Justice Jack B. Jacobs of the Delaware Supreme Court provided the luncheon address entitled “How Should Courts Regard Capital-Markets-Driven New Facts In Fashioning Common Law Corporate Governance Rules?”
Ronald Gilson (Columbia and Stanford Law Schools) and Charles Whitehead ‘86 (Boston University School of Law) presented their article, “Deconstructing Equity: Public Ownership, Agency Costs, and Complete Financial Markets.” Comments were provided by Alphonse Fletcher, Jr. (Fletcher Asset Management, Inc.).
Jeffrey Gordon (Columbia Law School) presented his article “Are Historically Based Default and Recovery Models in the High-Yield and Distressed Debt Markets Still Relevant in Today’s Credit Environment?” Comments were provided by Daniel Neff ‘77 (Wachtell, Lipton, Rosen & Katz).
The day concluded with a panel discussion moderated by Harvey Goldschmid ‘65 (Columbia Law School) and featuring Raanan Agus ’93 (Goldman Sachs), Alan Beller (Cleary Gottlieb Steen & Hamilton), Lady Lynn Forester de Rothschild ‘80 (E L Rothschild LLC), and Commissioner Annette Nazareth ‘81 (Securities and Exchange Commission). The panelists discussed issues surrounding recent reports regarding the competitive challenges facing the U.S. capital markets, including the impact of Section 404 of the Sarbanes-Oxley Act of 2002, the increased vitality of foreign markets, the decoupling of the locus of investors and the markets in which they invest, and the challenge of regulating increasingly complex derivative instruments. The panel addressed perceptions of the impact of foreign markets on the U.S. capital markets and potential solutions to ensure that the United States remains competitive in an increasingly global landscape.