Lucian Bebchuk and the Study of Corporate Governance

I recently placed on SSRN a new paper, titled Lucian Bebchuk and the Study of Corporate Governance. The paper was solicited for, and will appear in, an upcoming issue on the most-cited legal scholars that the University of Chicago Law Review will publish later this year.

The Essay discusses Lucian Bebchuk’s fundamental contributions to the field of corporate governance, as well as his major impact on scholarship, practice, and policy. Bebchuk is the author of more than one hundred articles, and is ranked by SSRN as the most-cited law professor in the corporate field (as well as one of the most-cited law professors in all fields). However, this ranking only tells part of the story; the Essay seeks to provide a fuller picture.

The first part of the Essay focuses on Bebchuk’s research contributions. I begin by surveying the broad range of corporate governance areas to which Bebchuk has made major contributions. By now Bebchuk’s contributions cover nearly every important area in this field, including: (i) management accountability and shareholder rights; (ii) the costs of management insulation; (iii) executive compensation; (iv) short-termism; (v) investor oversight, stewardship, and activism; (vi) controlling shareholders; (vii) dual-class structures and corporate pyramids; (viii) corporate acquisitions; (ix) corporate insolvencies; (x) jurisdictional competition; (xi) contractual freedom and private ordering; (xii) corporate political spending; and (xiii) stakeholder capitalism.

The first part of the Essay also identifies the aspects of Bebchuk’s research that have made it so consequential. In particular, I discuss Bebchuk’s methodological tools and modes of analysis and some of the overarching themes and approaches that are shared by his work in disparate areas.

The second part of the Essay focuses on Bebchuk’s impact. I first explain how Bebchuk’s work has shaped subsequent research; in particular, I discuss the many significant works by prominent scholars (such as Stephen Bainbridge, Frank Easterbrook and Dan Fischel, Jonathan Macey, Colin Mayer, and Lynn Stout) and prominent practitioners (such as Martin Lipton, Barbara Novick and Leo Strine) that have been written to engage with Bebchuk’s research in various areas. I also discuss how Bebchuk’s work has influenced research in economics and finance, as well as judicial decisions and practitioner discourse.

I then discuss how Bebchuk has had an unparalleled impact through his mentoring of many significant scholars. A key model that Bebchuk has widely used is to provide many of his mentees the opportunity to coauthor articles with him in the early stage of their academic careers. In addition to myself, fourteen other professors who have benefited from this unique experience include Oren Bar-Gill, Michal Barzuza, Howard Chang, Allen Ferrell, Jesse Fried, Andrew Guzman, Assaf Hamdani, Scott Hirst, Robert Jackson, Christine Jolls, Marcel Kahan, Holger Spamann, Charles Wang, and David Walker.

Finally, the Essay also discusses how Bebchuk’s scholarship and ideas have contributed to the development and adoption of practices and policies in the corporate governance area. For example, Bebchuk’s scholarly work on shareholder rights and the costs of management insulation has contributed to the widespread opposition among institutional investors to—and the resulting removal by many companies of—staggered boards, antitakeover provisions, and other entrenching arrangements. In addition, his influential research on executive compensation has contributed to the expansion of disclosure requirements for executive compensation, as well as to the increasing support for tightening the link between executive pay and long-term results.

Similarly, his research on the perils of dual-class share structures contributed to the initiatives of the Council of Institutional Investors and index providers to limit the use of such structures. And, Bebchuk’s research on hedge fund activism has contributed to the growing recognition of the benefits of such activism by institutional investors and policymakers.

The Essay is available for download here.