The New Role of Government
in
Corporate Governance

European Corporate Governance Institute
Thursday, 17th September 2009
Securities and Exchange Commission
Washington DC

A free all-day conference organised by the European Corporate Governance Institute, the Brookings Institution and Columbia Law School.
The organisers
are grateful for support from the Securities and Exchange Commission and the European Commission,
and for the sponsorship of the 2009 Conference by the Columbia Law School through the F.F. Randolph Jr. Speakers Fund and the Stephen Friedman Fund in Business Law.
Programme
Some sessions (see below) qualified for Continuing Legal Education credits. Click here or menu item above for further details

By the middle of this decade, there seemed to be a consensus concerning the right role of government in business. First, government was neither to be the owner of businesses nor their financier. The European Union (EU) promoted the liberalisation of state-owned enterprise and adopted an extensive system to control government support of local companies. With the exception of its involvement in the financing of home ownership, the US had no history of deep state involvement in the ownership of industry. Second, the government would regulate lightly, relying on markets to work. Now at the close of the decade, the financial crisis has called both of these principles into question, certainly in application and perhaps in principle as well. For the first time in its history, the US holds major ownership stakes in large companies and is playing an increasingly active role in their governance. The same phenomenon is present in EU member states. In both the US and the EU, there is growing momentum in favour of a much expanded regulatory outlook that extends well beyond the banking sector and into areas of corporate governance, especially executive pay. What should be the government's role in corporate governance, both in the companies now government-owned, and through regulation in the economy generally?

9.00-9.30am Registration and continental breakfast
  Conference Chair
  Professor Ronald Gilson
Marc & Eva Stern Professor of Law and Business,  Columbia Law School
Charles J. Meyers Professor of Law and Business, Stanford Law School
ECGI Fellow
Professor Ronald Gilson, Marc & Eva Stern Professor of Law and Business, Columbia Law School, Charles J. Meyers Professor of Law and Business, Stanford Law School
9.30-9.45am Welcome
  Antonio Borges
Chairman
European Corporate Governance Institute
Antonio Borges, Chairman, European Corporate Governance Institute

Karen Dynan
Vice President and Co-Director of the Economic Studies Program
The Brookings Institution

Professor Ronald Gilson
Marc & Eva Stern Professor of Law and Business,  Columbia Law School
Charles J. Meyers Professor of Law and Business, Stanford Law School
ECGI Fellow
Professor Ronald Gilson, Marc & Eva Stern Professor of Law and Business, Columbia Law School, Charles J. Meyers Professor of Law and Business, Stanford Law School

Session 1 - Keynote speech
*CLE: 1.0 credit, Areas of Professional Practice
9.45-10.35am

Keynote speaker
Mary Schapiro

Chairman, Securities and Exchange Commission
Introduced by Professor Ronald Gilson
Q&A moderated by Antonio Borges

Mary Schapiro, Chairman, Securities and Exchange Commission
10.35-10.50am Coffee

Session 2 – Government as investor
*CLE: 2.0 credits, Areas of Professional Practice
The financial crisis has caused the US and EU member states to become the owners, or substantial equity holders, of a number of large financial and industrial companies. Government has also become a dominant creditor through bad bank schemes, state guarantees or asset repurchasing programs. Should governments be an activist investor, selecting board members and influencing strategic and operating decisions? Should governments also seek to improve corporate governance arrangements? How can they do so? Or should governments stay largely passive in order to insulate these decisions from the political process? Is there a middle way?

10.50am-12.30pm

Moderator
Professor Jaap Winter
Partner, De Brauw Blackstone Westbroek
ECGI Board Member
Professor Jaap Winter, Partner, De Brauw Blackstone Westbroek
  Briefings
The Government as investor/owner in Europe
Professor Gérard Hertig
Professor of Law and Economics
Swiss Federal Institute of Technology
ECGI Research Associate
Professor Gérard Hertig, Professor of Law and Economics, Swiss Federal Institute of Technology
The Government as investor/owner in the United States
Professor Jeffrey Gordon
Alfred W. Bressler Professor of Law
Columbia Law School
ECGI Fellow
Professor Jeffrey Gordon, Alfred W. Bressler Professor of Law, Columbia Law School
  Panel
  Professor Charles Calomiris
Henry Kaufman Professor of Financial Institutions
Graduate School of Business, Columbia University
Professor Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Graduate School of Business, Columbia University
  Professor Xavier Vives
Professor of Economics and Financial Management
IESE Business School, University of Navarra
ECGI and CEPR
Professor Xavier Vives, Professor of Economics and Financial Management, IESE Business School, University of Navarra
12.30pm Lunch (Lunch will not be provided)

Session 3 - Keynote speech
*CLE: 1.0 credit, Areas of Professional Practice
2.00-2.50pm

Keynote speaker
Professor Mario Monti
President, Università Bocconi
Former European Commissioner for the Single Market, Financial Services
and Taxation, and for Competition Policy
Introduced by Antonio Borges
Q&A moderated by
Professor Ronald Gilson

President, Università Bocconi, Former European Commissioner for the Single Market, Financial Services and Taxation, and Competition Policy

Session 4 - Reforming compensation
*CLE: 1.5 credits, Areas of Professional Practice
Executive compensation is at the core of corporate governance, a central feature of the incentives given senior management. Driven by the example of private equity, the executive compensation structure became increasingly more contingent on stock price, with the expectation that the amounts of compensation and the measures of performance would be monitored by the board of directors. Serious commentators now argue that the directors did not prove themselves up to the task. The financial incentives for non-executive directors and Chairmen themselves have been questioned. As well, concern has been widely expressed that the compensation structure led executives to ignore systematic risk. If directors cannot monitor incentive structures, should other corporate constituencies have a say, like shareholders, creditors or employees? How should compensation be reformed? Is there a role for government to be the monitor?

2.50-4.20pm

Moderator
Gregory Ip
U.S. Economics Editor
The Economist

Gregory Ip, U.S. Economics Editor, The Economist
Briefings (Overview of regulatory reforms ongoing on both sides of the Atlantic)
The Latest Facts from Europe
Maria-Cristina Ungureanu
Researcher
University of Genoa
Maria-Cristina Ungureanu, Researcher, University of Genoa

The Latest Facts from the United States
Joseph E. Bachelder
Founder and Senior Partner
Bachelder Law Firm

Joseph E. Bachelder, Founder and Senior Partner, Bachelder Law Firm
Panel

Professor Lucian Bebchuk
Professor of Law, Economics, and Finance
Harvard Law School
ECGI Fellow

Professor Lucian Bebchuk, Professor of Law, Economics, and Finance, Harvard Law School
Professor Steve Kaplan
Neubauer Family Professor of Entrepreneurship and Finance
University of Chicago Graduate School of Business
ECGI Fellow
Professor Steve Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, University of Chicago Graduate School of Business
4.20-4.35pm Coffee

Session 5 –The Future of the Government Involvement
*CLE: 1.5 credits, Areas of Professional Practice
What should the US and the EU do now? Does government need to take firmer control when it is forced to take ownership or provide credit? Should government ownership persist, declining only slowly in light of the uncertainty concerning the trajectory of recovery and, recognising the political difficulty of exiting from companies in industries that have not fully recovered? Alternatively, should privatisation take place at the earliest possible moment, for the very same reasons? How should this round of privatisation take place? What regulatory structure should remain in place? How can governments ensure sound corporate governance post-privatisation? Are new laws needed to allow governments to intervene more rapidly in the restructuring of systemically important enterprises?  If so, how should "systematically important" be defined and what safeguards are required for shareholders when governments do intervene? How do we ensure co-ordination, not just within the EU, but also across the Atlantic?

4.35-5.50pm Moderator
Chrystia Freeland
United States Managing Editor
Financial Times
Chrystia Freeland, United States Managing Editor, Financial Times
  Panel
  Professor Jordi Canals
Dean
IESE Business School, University of Navarra
Professor Jordi Canals, Dean, IESE Business School, University of Navarra
  Jim Millstein
Chief Restructuring Officer, Office of Financial Stability
US Treasury
Jim Millstein, Chief Restructuring Officer, Office of Financial Stability, US Treasury
  Damon Silvers
Associate General Counsel
AFL-CIO
Damon Silvers, Associate General Counsel, AFL-CIO

Session 6 – Summing up

5.50-6.00pm Professor Marco Becht
Professor of Finance and Economics, Université Libre de Bruxelles
ECGI Executive Director
Professor Marco Becht, Professor of Finance and Economics, Université Libre de Bruxelles, ECGI Executive Director
Ethiopis Tafara
Director of the Office of International Affairs
United States Securities and Exchange Commission
Ethiopis Tafara, Director of the Office of International Affairs, United States Securities and Exchange Commission