A Behavioral Approach to Analyzing Corporate Failures

Dickerson, A. Mechele

doi:10.2139/ssrn.380821

Cited by 4 publications

(2 citation statements)

References 14 publications

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“…If there is only a remote chance that an inattentive or reckless outside director will end up paying damages personally, the legal system could be nurturing carelessness in the boardroom. Since outside directors are an important check on managerial conduct, various commentators have called for sanctions to be toughened (see, for example, DENT [1981], DICKERSON [2003]). On the other hand, the historical and cross-border persistence of low risk of out-of-pocket liability suggests that the current arrangements are sensible from a policy perspective.…”

Section: Policy Justifications For Current Arrangementsmentioning

confidence: 99%

Outside Director Liability: A Policy Analysis

Black¹,

Cheffins²,

Klausner³

2006

JITE

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Section: Policy Justifications For Current Arrangementsmentioning

confidence: 99%

Outside Director Liability: A Policy Analysis

Black¹,

Cheffins²,

Klausner³

2006

JITE

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“…Unlike managers of a large‐scale business, who are often trained in business administration or well experienced in running a business, the entrepreneur may have no prior experience or training relevant to managing her business . Entrepreneurs are also known to be overly optimistic in comparison to managers of large‐scale businesses and/or prone to other cognitive biases, but business failure is known to improve their capacity as entrepreneurs . Another well‐known problem plaguing many entrepreneurs is that of overexpansion; having seen her first store succeed, the entrepreneur may rush to open more stores, without having the means to manage these stores properly.…”

Section: “Phoenix Syndrome” Behavior—a Possible Justificationmentioning

confidence: 99%

Small Business Financial Distress and the “Phoenix Syndrome”—A Re‐evaluation

Rotem

2012

Intl Insolvency Rev

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Escaping Entity-Centrism in Financial Services Regulation

Krug

2013

SSRN Journal

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In the ongoing discussions about financial services regulation, one critically important topic has not been recognized, let alone addressed. That topic is what this Article calls the "entity-centrism" of financial services regulation. Laws and rules are entity-centric when they assume that a financial services firm is a stand-alone entity, operating separately from and independently of any other entity. They are entitycentric, therefore, when the specific requirements and obligations they comprise are addressed only to an abstract and solitary "firm," with little or no contemplation of affiliates, parent companies, subsidiaries, or multi-entity enterprises. Regulatory entity-centrism is not an isolated phenomenon, as it permeates the laws and rules governing many facets of a firm's operations. Moreover, it can be discerned in laws and rules covering many types of financial services activities. In other words, entity-centrism in financial services regulation is pervasive. It is also deeply problematic.This Article calls attention to entity-centrism as manifested in financial services regulation, shows why entity-centrism counters regulatory objectives, and assesses possible explanations for the phenomenon. It does so primarily by evaluating two recent regulatory failures that reveal how entity-focused laws and rules privilege entity boundaries over the various ways in which multiple entities (or entities and individuals) work together as a common enterprise. Accordingly, the Article contends that financial services regulation should look past entity boundaries and that lawmakers and regulators should think more broadly, critically,

show abstract

A Behavioral Approach to Analyzing Corporate Failures

Cited by 4 publications

References 14 publications

Outside Director Liability: A Policy Analysis

Outside Director Liability: A Policy Analysis

Small Business Financial Distress and the “Phoenix Syndrome”—A Re‐evaluation

Escaping Entity-Centrism in Financial Services Regulation

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