Eclipse of the Public Corporation Revisited: Concentrated Equity Ownership Theory

This research piece was written at the invitation of the Business Law group at the University of Oxford. The original contribution can be found here.

The era of the U.S. public corporation is in decline. Tectonic shifts in seemingly disparate regions of the corporate landscape are underway. Through the lens of a new theory of the firm, these phenomena are eerily consistent with Harvard Professor Michael Jensen’s bold prediction in Eclipse of the Public Corporation (1989). Yet, much debate in securities law and corporate governance continues to be premised upon the 1932 Berle-Means corporation, marked by a separation between share ownership and managerial control. Eighty-five years later, that ownership structure is being displaced by a more robust organizational form that is particularly suitable to exponential innovation and growth in highly competitive markets – conceptualized as the founder centric firm... [read more]

June 29, 2015

British Columbia Securities Commission
Alberta Securities Commission
Financial and Consumer Affairs Authority of Saskatchewan
The Manitoba Securities Commission
Ontario Securities Commission
Autorité des marchés financiers
Superintendent of Securities, Prince Edward Island
Nova Scotia Securities Commission
Financial and Consumer Services Commission (New Brunswick)
Securities Commission of Newfoundland and Labrador
Superintendent of Securities, Yukon Territory
Superintendent of Securities, Northwest Territory
Superintendent of Securities, Nunavut

Dear Sirs/Mesdames:

Re: Canadian Securities Administrators (CSA) Proposed Amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and changes to National Policy 62-203 Take-Over Bids and Issuer Bids

Thank you for the opportunity to comment on the proposed amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids (MI 62-104) and changes to National Policy 62-203 Take-Over Bids and Issuer Bids (NP 62-203), (collectively, the Proposed Amendments), both of which were published for comment on March 31, 2015. We appreciate the opportunity to be a part of the CSA’s regulatory reform process and to contribute to these important developments.

Overall, we are supportive of the intent of the Proposed Amendments to allow issuers subject to an unsolicited bid time to adequately evaluate and consider competing proposals. In extending the period, however, a careful balance must be maintained to minimize the cost burdens and risk exposure for offerors. The 120 day period may act as a deterrent to offerors, providing disincentive for potential transactions that would otherwise enhance value.