There are numerous players who have ideas about what are good or best corporate governance practices, but different players have different themes. My article, Harmony or Dissonance? The Good Governance Ideas of Academics and Worldly Players, originally delivered as a special lecture and recently published in The Business Lawyer, asks questions concerning ideas about what constitutes good corporate governance that are espoused by different players.

The article dwells briefly on seven categories of players: (1) academics, such as financial economists and law professors who resort heavily to empirical studies; and more worldly players such as (2) legislators, (3) governance rating firms, (4) large institutional investors, (5) corporate directors, (6) law firms that represent corporate clients on the defensive, and (7) courts. Are there discernible trends and patterns in the views espoused by these different categories of actors, despite all the differences among individual actors within each category? I believe there are such patterns, and offer some initial thoughts about the characteristic themes and different patterns of ideas about good corporate governance that we observe among the different categories of players. I then hypothesize about the reasons for these differences. My approach focuses on the motives and incentives driving the different players and how they take shape in the occupational situations inhabited by the players.

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The HLS business law faculty listed by the poll’s conductors are Lucian Bebchuk, Robert C. Clark, John Coates, Einer Elhauge, Allen Ferrell, Jesse Fried, Louis Kaplow, Reinier Kraakmann, J. Mark Ramseyer, Mark J. Roe, Holger Spamann, Kathryn Spier, and Guhan Subramanian.

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Mr. Cohen talked about the current state of the financial system and the importance of confidence to the effective functioning of any financial system, before moving on to discuss a number of recent transactions. He focused on the significant differences in financial transactions, due to the regulatory overlay, and provided numerous insightful examples of recent transactions where these issues were of critical importance. He also provided specific examples of the government’s role, which facilitated transactions that involved asset sales without the assumption of all the corresponding liabilities, either explicitly, through stop-loss relief or capital adequacy exemptions. Mr. Cohen also provided interesting insights into what he expects in terms of forthcoming regulatory changes.

A video of the discussion can be accessed on the here.

The panelists included Raymond McGuire, the co-head of Global Investment Banking at Citigroup, Toby Myerson, the co-head of Paul Weiss‘ Mergers and Acquisitions Group and Scott V. Simpson, the head of the European Mergers and Acquisitions Group at Skadden, Arps, Slate, Meagher & Flom.

Ray started the discussion with an overview of global trends in M&A and cross border transactions. He emphasized how the market today is far more globally connected, and that the increase in LBO activity during the 2002 to 2007 period was coincident with increased use of debt, and in particular covenant light debt. He also highlighted issues with the subprime market, and the government bailout of certain institutions.

Toby and Scott focused on the European regime, and offered fascinating perspectives on the social and political considerations that underlie the differences between the European and US approaches. In particular, Scott noted the differences in the corporate governance regime. For example, certain European countries such as Germany require directors to consider broader corporate interests, such as employee interests, in responding to takeover offers, as opposed to the US model where shareholder interests are paramount. Toby and Scott also took the class through case studies of two recent cross-border deals that illustrate the application of these principles, as well as the quickly changing landscape facing M&A practioners. The first case, Mittal Steel’s acquisition of Arcelor, illustrated how lawyers could exploit international reconciliation requirements to delay an acquisition, thus giving the target the ability to shop for a higher price. Scott noted how this successful technique is no longer effective due to recent international harmonization. He then discussed Access Industries’ Basell Holdings acquisition of Lyondell Chemicals Company, where the parties needed to use another technique involving the separation of voting and economic interests using derivatives. In both cases, the panelists highlighted the social and political matters that inevitably arise when a foreign acquirer pursues a large target.

A video of the discussion can be accessed online here.

The panelists, including William Ackman and Roy Katzovicz of Pershing Square Capital, Sy Lorne of Millennium Partners, and Robert Knapp of Ironsides Partners, emphasized the regulatory risks hedge fund activists face–especially the antitrust and securities issues raised when a fund enters a proxy fight. The talk also addressed the effects of public perception of hedge funds and increased use of derivatives on fund activism. In addition, the panelists shared their insights on the complex voting issues that inevitably arise in a closely contested election–including which shareholders should have been entitled to vote, and which party should have prevailed.

A video of the discussion can be accessed online here.

The panelists included Richard Hall of Cravath, Swaine & Moore along with Scott V. Simpson of Skadden, Arps, Slate, Meagher & Flom, each of whom have served as counsel on some of the largest cross-border deals ever to close. The panelists took students through case studies of two recent cross-border deals that illustrate the sensitive issues that corporate counselors face in a major international merger: Mittal Steel’s acquisition of Arcelor, and Basell’s acquisition of Huntsman. The panelists offered an insider’s view of the negotiations in both transactions–and the social and political matters that inevitably arise when a foreign acquirer pursues a large target.

A video of the discussion can be accessed online here. (video no longer available)

The talk began with an intimate history of the developments that led to the conception of modern merger defenses. The students were treated to the definitive account of the development of the shareholder rights plan–more widely known as the “poison pill”–as well as the strategy that led to the successful defense of those measures before the Delaware courts. Questions from the audience led to an insightful discussion of changes in modern corporate governance–including shareholder activism, the increased presence of independent directors, and the prominence of private equity–and their effects on merger practice. The talk closed with an insider’s view on recent developments likely to shape merger practice in 2008 and beyond.

A video of the discussion can be accessed on the Program on Corporate Governance website here. The materials used in the presentation can be downloaded here. (video no longer available)

The panelists included Louis D’Ambrosio, Chief Executive Officer of Avaya, which was recently taken private by the Texas Pacific Group; Robert L. Friedman, Chief Legal Officer of Blackstone; and Eileen Nugent of Skadden, a leading corporate practitioner with extensive experience in leveraged buyout transactions.  In response to questions from Professor Clark, Vice Chancellor Strine, and the audience, the panel shared its insights on matters including the current deal environment for private equity, a board’s fiduciary duties when evaluating a private equity firm’s buyout offer, and the emergence and relevance of “go-shop” provisions in private equity transactions.

A video of the panel discussion is available for download here.

Part IV of the profile, however–entitled Go Dick! Smile—is the showstopper.  That Part describes the panel on Spinoffs and Breakups: The Case of Time Warner, where opponents in the Carl Icahn/Time Warner proxy saga came before a packed room at Harvard Law to debrief the battle and its implications for the future of corporate governance.  Several of the major players in the proxy fight came to offer their perspective: Richard Parsons, CEO of Time Warner; Bruce Wasserstein, CEO of Lazard; Gene Sykes of Goldman Sachs; and Paul Cappuccio, Time Warner’s General Counsel.

All four offered candid and insightful reflections on Icahn’s attempt to influence corporate decisionmaking at Time Warner.  After acquiring about 3.5% of Time Warner’s stock, Icahn–who thought the shares badly undervalued–asked Parsons to spin off Time Warner’s massive cable division and undertake a $20 billion share buyback program to boost the stock price.  When Parsons–and other major shareholders–resisted, Icahn retained Lazard, who promptly prepared a 343-page report recommending that the Time Warner board split the company in four and proceed with Icahn’s proposed buyback.  Although Time Warner eventually agreed to buy back nearly $20 billion in shares, the company successfully resisted Icahn’s proposed asset sales.  (Whether that result was good for shareholders, of course, remains to be seen.)

All of the panelists, along with Professor Clark and Vice Chancellor Strine, seemed to agree that Icahn’s tactics revealed that Parsons did not as close a bead on the pulse of the investor community as he might have.  But the speakers also seemed to conclude that the Time Warner/Icahn story points to some of the limits of the influence even a well-heeled shareholder activist can exert on a major public company: as Gene Sykes, who advised Time Warner, indicated, Icahn was only able to push Parsons as far as fellow investors would allow.

Readers should absolutely check out the Lawdragon piece, available here, to see what lessons can be drawn from this rare and candid look inside a major proxy fight.  And if you’d like a firsthand look at the panelists and their debate, the Program on Corporate Governance has posted the video of the discussion here. (video no longer available)

Topics ranged from poison pills to shareholder activism, and rarely does a one-semester syllabus dare to cover so much ground.  But what truly made the course unique was the panel discussions, hosted by the Program on Corporate Governance, in which expert practitioners were invited to explain and defend their views before overflow crowds of students and faculty.

Part III of Lawdragon‘s profile, A Friendly Tale of Hot Dogs and Trainwrecks, offers a fascinating description of the first panel presentation, which emphasized the notion that a merger functions, in many ways, as an extraordinary experience in contract negotiation.  (The role of contract law as an analytical tool for assessing mergers has been a frequent subject of courts and commentators alike.) The panelists included Richard Climan of Cooley Godward and Eileen Nugent and Lou Kling of Skadden Arps, each of whom brought decades of negotiating merger agreements–occasionally, apparently, with each other–to bear on the discussion.

The Hot Dogs and Trainwrecks profile, available here, is a must-read, giving readers insights on the negotiation of the famed material-adverse-change clause and its implications for buyer’s remorse in the merger market. In addition, the Program on Corporate Governance has posted a video of the entire panel discussion here. (video no longer available)

Later this month, I will add details on the exciting events held on campus last year as part of the course, which featured expert panelists in nearly every field related to corporate governance.  We’ll also post videos of the panels and discuss Lawdragon‘s coverage of the events.  In the meantime, our readers can find the full article here.