Tenure-Based Voting: A Potential Governance Solution for Corporate Sustainability

Author: Sam Miller | UC Berkeley School of Law | J.D. Candidate | Posted: September 9, 2019 | Download PDF.

When WeWork’s draft S-1 became publicly available on August 14, the company’s multi-class stock structure reignited debate around what constitutes effective corporate governance when it comes to stockholder voting rights. “One-share, one-vote is a bedrock tenet of good corporate governance as far as most long-term shareholders are concerned,” asserted a spokesperson for the Council of Institutional Investors, a shareholder rights nonprofit.[1] Technology companies, in particular, have taken a different approach in recent years, however, with businesses like Alphabet, Facebook, Dropbox, Snap, Lyft, and now WeWork going public with dual- or multi-class stock structures to allow founders to lock in control—Snap’s 2017 IPO, for example, gave public investors zero voting power.[2] These companies argue that giving founders and other insiders disproportionate voting power enables management to focus on long-term strategy and sustainability rather than short-term financial performance,[3] but institutional investors have condemned the practice as exacerbating “classical principal-agent risks.”[4]


Strategies for Public Benefit Corporations in Pharmaceutical R&D

Author: Callie Davidson | UC Berkeley School of Law | J.D. Candidate | Posted: August 14, 2019

Social enterprise models have the potential to address unmet needs in pharmaceutical development.[1] This is an ideal space for public benefit corporations because patients have often gotten short shrift due to big pharma’s duty to maximize stakeholder profit. The lack of attention to diseases of poverty, scandal-worthy price gouging (i.e. Daraprim and EpiPen), and scarcity of orphan drug development are all notable manifestations of this troubling phenomenon.[2] Narrowly-focused pharmaceutical development PBCs could fill these gaps in research and development by being less concerned with their bottom line and being more strategic than pharmaceutical industry giants that can afford to take a shotgun approach in developing blockbuster drugs.[3] Strategies that pharmaceutical development PBCs should consider include piggybacking, product development partnerships, and taking advantage of approval flexibilities in the orphan drug space.

Trek Therapeutics, founded the former chief medical officer of “biotech juggernaut” Celgene, has taken a deep dive approach by focusing on Hep-C.[4] Core to their mission is to “provide therapies for the treatment of infectious diseases that are accessible and affordable.”[5] Trek Therapeutics has employed the piggybacking strategy by focusing on developed drugs that got “stuck halfway through the pipeline.”[6] Working off pre-existing information is much more cost-effective than starting from scratch in developing small molecule drugs and conducting clinical trials.[7]  Similar strategies have been employed by the non-profit organization, Drugs for Neglected Diseases initiative (DNDi), which has looked for promising drugs in “compound libraries generated by biotechnology and pharmaceutical companies.”[8]


Corporate Culture helps to advance ESG Goals: How to value it?

Author: Carolina Trejos | UC Berkeley School of Law | LLM Candidate, Colombia | Posted: August 13, 2019

Earlier this year, EY, State Street Global Advisors, and Black Rock reminded us of the importance of corporate culture for companies’ advance on their long-term value[1] within an environment that claims ESG goals.

But, what is corporate culture? How can we measure it?
Based on what these three have actors said, all we know is that corporate culture is an intangible asset that is driving corporate value and that it is difficult to measure accurately. However, this does not mean that companies, stakeholders and acquirers should ignore it.

State Street Global Advisors brings a definition of corporate culture as follows: “Corporate culture encompasses a broad range of shared attitudes shaping the behaviors of individuals as a group across an organization. It allows employees to identify with their organization and differentiates companies from competitors. It is closely associated with human capital management.[2]


The “RAD” Carpet: Who Wore What and Where Did They Donate?

Author: Madeleine Smith | UC Berkeley School of Law | J.D. Candidate | Posted: August 12, 2019

While the Hollywood awards season is meant to celebrate the year’s achievements in film, television, and music, much of the media coverage focuses on another art—fashion. After every awards show, outlets from tabloids[1] to The Wall Street Journal[2] dissect who wore what designed by whom. This year, The New York Times asked another question in its piece “Who Are You Wearing and Where Did They Donate?”.

Vanessa Friedman, the Times’ fashion director, and chief fashion critic used her column to profile RAD (Red Carpet Advocacy).[3] Founded by Arianne Phillips, an Oscar-nominated costume designer, and Carineh Martin, a luxury brand consultant, RAD is seeking to “change the conversation on the red carpet” by inextricably linking the fashion coverage to philanthropic causes.[4]

RAD works with stylist and celebrities to select the pieces they will wear on the red carpet, and then goes to the designer or fashion house to request a donation to the celebrity’s charity of choice. The designer chooses the amount and donates the funds directly to the cause.[5] Then, in social and traditional media coverage, the charity is tagged or identified alongside the designer.[6] (more…)

Why Aren’t More Breweries Social Enterprises? A Business Judgment Case

Author: Ben Adler | UC Berkeley School of Law | J.D./MBA Candidate 2021 | Posted: July 26, 2019


Like many Americans, I am a beer enthusiast. But I recognize that brewing beer is an inherently unsustainable business and the industry does not rank highly on environmental sustainability metrics, specifically for energy and water conservation. Breweries require large amounts of energy to control temperature in the brewing process and to package and distribute their product. [1]. Beer, which is ~90% water, requires large quantities of water to produce – between 4-10x the volume of beer produced. [2]. Because water is the main ingredient in beer, and one of the most important, many brewers take pride in and advertise the quality of their water. [3].


Some brewers believe that brewing can be sustainable, (more…)