University of Wisconsin–Madison

Recent UW Law Faculty Scholarship: The Analytical Failures of the U.S. Beef Supply Chain; Corporate Board Gatekeepers; Appendix on Countermajoritarian Legislatures; What We Can Learn from the Literature on Sanctions and Ukraine

Here is the latest faculty scholarship appearing in the University of Wisconsin Law School Legal Studies Research Papers series found on SSRN. In June of 2021, a group of agricultural economists delivered a set of papers concerning the market for beef cattle. This project undertaken at the request of the House Agriculture Committee and paid for by the U.S. Department of Agriculture was intended to address the major marketing issues facing cattle feeders. The resulting publication, The U.S. Beef Supply Chain: Issues and Challenges, is basically a defense of the current system of marketing cattle despite the manifest problems and adverse impacts on many feeders. This review points out the circularity of the claims that the current methods are the best possible. It also shows that the authors failed to consider the incentives of the large meat packers to distort the buying process, nor did they evaluate options that might preserve the purported advantages of some of the buying strategies to achieve greater differentiation of quality while constraining market power of the packers. The result is a classic example of Panglossian reasoning: “This is the best of all possible worlds.” For the last decade, investors, scholars and regulators have turned to independent directors in key leadership positions as a means to safeguard corporate boards’ ability to serve as a robust check on management’s power. As a result, a vast majority of public companies’ boards are now led by an Independent Chair, or alternatively, include a Lead Independent Director. These ostensible outsiders”which this article calls “board gatekeepers””are meant to be even more empowered and detached from management compared to the rest of the board. This allows them to serve an independent gatekeeping function”a necessary guardrail against management’s ability to exert undue control over the boardroom. But a closer look at board gatekeepers paints a concerning reality. Through a hand-collected dataset and interviews with directors and general counsels, this Article reveals, for the first time, that installing board gatekeepers is not the cure-all it seems. Instead, board gatekeepers are often deprived of the powers necessary to rebalance the boardroom dynamic and, in many cases, their own independence is questionable at best”and recognizing them as such has numerous theoretical and practical implications. This Article makes two key contributions to the literature. First, using a first of its kind, hand-collected and coded, dataset of 900 public companies, it exposes the unfettered discretion companies have in designating gatekeepers’ independence and powers”revealing that many board gatekeepers are in fact gatekeepers in title only, lacking both the independence and powers that are critical to their role. Second, the Article uses the context of board gatekeepers to illuminate the inherent difficulty with relying on an abstract concept of independence, underscoring the importance of what it terms as “functional independence.” Recognizing that companies with faux gatekeepers may pose specific governance concerns, the Article then offers several policy recommendations to ensure gatekeepers’ functional independence. This Appendix first describes the methodology used to tally manufactured majorities that occurred in state legislatures between 1968 and 2016. It then provides the tallies from state senates and state assemblies, as well as histograms showing how manufactured majorities depart from the majority threshold. Although subject to limitations discussed below in and in the main Article, the analysis here shows that manufactured majorities have been a recurring outcome of state legislative elections. Russia’s invasion of Ukraine represents the biggest security challenge facing Europe since World War II. In response, countries around the world have imposed an unprecedented array of sanctions. Never before has the global community worked so quickly and efficiently to cut off a country economically from the rest of the world, and never has such a powerful country been hit so hard by economic weapons. The sanctions regime is still evolving, not all are working as was intended, and it is too soon to predict the outcome of this unprecedented effort. But there is a rich literature on sanctions that can help us identify the questions to be asked about their possible impact on the situation in the Ukraine. In this short note, we present a series of findings about sanctions culled from the literature, and discuss how each may play out in the Ukraine. For the full text of these works and additional scholarship from UW Law faculty and staff, visit the University of Wisconsin Law School Legal Studies Research Paper Series on SSRN. A free email subscription is available at the top right of the page.