Whenever I talk to economists, since I cannot awe you with a fancy equation, I have to start with a bad joke.  It is a knock-knock joke, which is especially hard to pull off when trying to physically distance.  “Knock, knock.”  “Who’s there?”  “Economist.”  “Economist who?” “I kin’ o’ missed you too!”  It is a really bad joke, but I really do miss having you all here at the SEC in person and hope that…

Corporate boards are charged with the critical tasks of assessing top management performance and making compensation and dismissal decisions.  Moreover, boards serve as a valuable source of advice and counsel to top management.  While board members tend to be highly talented individuals, they make decisions collectively as a group.  The quality of board decisions is, therefore, likely to be materially influenced by group dynamics.  While the topic of group dynamics has been extensively studied by…

From a practical standpoint, the most significant part of the 1970 Milton Friedman essay in the New York Times was the headline: “The Social Responsibility Of Business Is to Increase its Profits.”  For a half-century, that phrase has been used to summarize the essay, and alongside Friedman’s similar views in a 1962 treatise, also used in support of “shareholder primacy” as the bedrock of American capitalism.  “Shareholder primacy” and “Friedman doctrine” became interchangeable.  The Friedman…

On August 31, 2020, three divisions of the US Commodity Futures Trading Commission (CFTC) issued revised no-action letters providing additional relief to swap dealers (SDs), end users, and other market participants from registration requirements; business conduct standards; uncleared swap margin requirements; mandatory clearing; and trade execution requirements as a result of the looming discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) and the transition to risk-free rates (RFRs). The…