Law
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- 06 Jun 2023
- Cold Call Podcast
The Opioid Crisis, CEO Pay, and Shareholder Activism
In 2020, AmerisourceBergen Corporation, a Fortune 50 company in the drug distribution industry, agreed to settle thousands of lawsuits filed nationwide against the company for its opioid distribution practices, which critics alleged had contributed to the opioid crisis in the US. The $6.6 billion global settlement caused a net loss larger than the cumulative net income earned during the tenure of the company’s CEO, which began in 2011. In addition, AmerisourceBergen’s legal and financial troubles were accompanied by shareholder demands aimed at driving corporate governance changes in companies in the opioid supply chain. Determined to hold the company’s leadership accountable, the shareholders launched a campaign in early 2021 to reject the pay packages of executives. Should the board reduce the executives’ pay, as of means of improving accountability? Or does punishing the AmerisourceBergen executives for paying the settlement ignore the larger issue of a business’s responsibility to society? Harvard Business School professor Suraj Srinivasan discusses executive compensation and shareholder activism in the context of the US opioid crisis in his case, “The Opioid Settlement and Controversy Over CEO Pay at AmerisourceBergen.”

- 17 Jan 2023
- Book
Good Companies Commit Crimes, But Great Leaders Can Prevent Them
It's time for leaders to go beyond "check the box" compliance programs. Through corporate cases involving Walmart, Wells Fargo, and others, Eugene Soltes explores the thorny legal issues executives today must navigate in his book Corporate Criminal Investigations and Prosecutions.

- 29 Nov 2022
- Cold Call Podcast
How Will Gamers and Investors Respond to Microsoft’s Acquisition of Activision Blizzard?
In January 2022, Microsoft announced its acquisition of the video game company Activision Blizzard for $68.7 billion. The deal would make Microsoft the world’s third largest video game company, but it also exposes the company to several risks. First, the all-cash deal would require Microsoft to use a large portion of its cash reserves. Second, the acquisition was announced as Activision Blizzard faced gender pay disparity and sexual harassment allegations. That opened Microsoft up to potential reputational damage, employee turnover, and lost sales. Do the potential benefits of the acquisition outweigh the risks for Microsoft and its shareholders? Harvard Business School associate professor Joseph Pacelli discusses the ongoing controversies around the merger and how gamers and investors have responded in the case, “Call of Fiduciary Duty: Microsoft Acquires Activision Blizzard.”

- 28 Apr 2022
- Research & Ideas
Can You Buy Creativity in the Gig Economy?
It's possible, but creators need more of a stake. A study by Feng Zhu of 10,000 novels in the Chinese e-book market reveals how tying pay to performance can lead to new ideas.

- 04 Jan 2022
- What Do You Think?
Firing McDonald’s Easterbrook: What Could the Board Have Done Differently?
Letting a senior leader go is one of the biggest—and most fraught—decisions for a corporate board. Consider the recent CEO scandal and legal wrangling at McDonald's, says James Heskett. Open for comment; 0 Comments.

- 20 Sep 2021
- Research & Ideas
How Much Is Freedom Worth? For Gig Workers, a Lot.
In the booming gig economy, does the ability to set your schedule outweigh having sick leave and overtime? Felix Oberholzer-Gee and Laura Katsnelson turn to DoorDash drivers to find out. Open for comment; 0 Comments.

- 17 Sep 2021
- Research & Ideas
The Trial of Elizabeth Holmes: Visionary, Criminal, or Both?
Eugene Soltes explains why the fraud case against the Theranos cofounder isn't as simple as it seems, and why a conviction probably wouldn't deter unethical behavior from others. Open for comment; 0 Comments.

- 23 Aug 2021
- Research & Ideas
Why White-Collar Crime Spiked in America After 9/11
The FBI shifted agents and other budget resources toward fighting terrorism in certain parts of the country, and financial fraud and insider trading ran rampant, according to research by Trung Nguyen. Open for comment; 0 Comments.

- 23 Feb 2021
- Cold Call Podcast
Examining Race and Mass Incarceration in the United States
The late 20th century saw dramatic growth in incarceration rates in the United States. Of the more than 2.3 million people in US prisons, jails, and detention centers in 2020, 60 percent were Black or Latinx. Harvard Business School assistant professor Reshmaan Hussam probes the assumptions underlying the current prison system, with its huge racial disparities, and considers what could be done to address the crisis of the American criminal justice system in her case, “Race and Mass Incarceration in the United States.” Open for comment; 0 Comments.

- 19 Oct 2020
- Working Paper Summaries
Bankruptcy and the COVID-19 Crisis
Analyzing the impact of the COVID-19 crisis on bankruptcy filing rates in the United States, this study finds that large businesses, small businesses, and consumers experience very different effects of the crisis.

- 12 Aug 2020
- Research & Ideas
Why Investors Often Lose When They Sue Their Financial Adviser
Forty percent of American investors rely on financial advisers, but the COVID-19 market rollercoaster may have highlighted a weakness when disputes arise. The system favors the financial industry, says Mark Egan. Open for comment; 0 Comments.

- 26 Jun 2020
- Working Paper Summaries
Weak Credit Covenants
Prior to the 2020 pandemic, the leveraged loan market experienced an unprecedented boom, which came hand in hand with significant changes in contracting terms. This study presents large-sample evidence of what constitutes contractual weakness from the creditors’ perspective.

- 23 Mar 2020
- Research & Ideas
Product Disasters Can Be Fertile Ground for Innovation
Rather than chilling innovation, product accidents may provide companies an unexpected opportunity to develop new technologies desired by consumers, according to Hong Luo and Alberto Galasso. Open for comment; 0 Comments.
- 01 Nov 2019
- What Do You Think?
Should Non-Compete Clauses Be Abolished?
SUMMING UP: Non-compete clauses need to be rewritten, especially when they are applied to lower-income workers, respond James Heskett's readers. Open for comment; 0 Comments.

- 28 May 2019
- Research & Ideas
Investor Lawsuits Against Auditors Are Falling, and That's Bad News for Capital Markets
It's becoming more difficult for investors to sue corporate auditors. The result? A weakening of trust in US capital markets, says Suraj Srinivasan. Open for comment; 0 Comments.

- 13 May 2019
- Working Paper Summaries
The Changing Landscape of Auditor Litigation and Its Implications for Audit Quality
Data from 1996 to 2016 shows that shareholder litigation against auditors has declined in recent years. Empirical evidence shows that Rule 10b-5, the Securities Act statute used for class action lawsuits, has lost its bite for use against auditors. This decline is driven, at least in part, by the US Supreme Court’s narrowing of liability standards. These findings suggest weakened shareholder protection with profound implications for investors.

- 13 May 2019
- Research & Ideas
The Unexpected Way Whistleblowers Reduce Government Fraud
Even unfounded allegations by whistleblowers can force government contractors to renegotiate their terms, say Jonas Heese and Gerardo Perez Cavazos. Open for comment; 0 Comments.

- 06 May 2019
- Research & Ideas
Consumers Blame Business for Global Health Problems. Can Business Become the Solution?
Millions of people have been harmed by cigarettes, defective merchandise, pollution, addiction and other business by-products. now, pioneering companies are exploring healthier ways to operate, say Amy C. Edmondson and Dr. Howard K. Koh. Open for comment; 0 Comments.

- 15 Jan 2019
- Working Paper Summaries
The Creation and Evolution of Entrepreneurial Public Markets
Since 1990, new stock exchanges geared toward fast-growing, entrepreneurial companies have proliferated around the world. This analysis shows that exchanges in countries with better shareholder protection allowed younger and less profitable companies to raise more capital. These markets alone cannot boost entrepreneurial activity but need enabling institutions.
The PGA Tour and LIV Golf Merger: Competition vs. Cooperation
On June 9, 2022, the first LIV Golf event teed off outside of London. The new tour offered players larger prizes, more flexibility, and ambitions to attract new fans to the sport. Immediately following the official start of that tournament, the PGA Tour announced that all 17 PGA Tour players participating in the LIV Golf event were suspended and ineligible to compete in PGA Tour events. Tensions between the two golf entities continued to rise, as more players “defected” to LIV. Eventually LIV Golf filed an antitrust lawsuit accusing the PGA Tour of anticompetitive practices, and the Department of Justice launched an investigation. Then, in a dramatic turn of events, LIV Golf and the PGA Tour announced that they were merging. Harvard Business School assistant professor Alexander MacKay discusses the competitive, antitrust, and regulatory issues at stake and whether or not the PGA Tour took the right actions in response to LIV Golf’s entry in his case, “LIV Golf.”