...LIMITS ON EXCESSIVE DELEGATED LEGISLATION MYTH OR REALITY INTRODUCTION Delegated Legislation, as the name itself suggests, means the delegation of the power of law making by the legislature to the other organs of the government. In India, there is separation of powers between the organs of the government but this separation is not in water tight compartments. Delegated Legislation in India is seen when the legislature, delegates some of the law making powers to the executive. The aim of the doctrine of separation of powers is to guard against tyrannical and arbitrary powers of the State. The rationale behind the doctrine is that, if all power is concentrated in one and the same organ, it would give rise to the danger that it may enact tyrannical laws, and also execute them in a despotic manner. In the face of the complex socio-economic problems demanding solution in a modern welfare state, it has been agreed by many legal scholars that the strict application of the separation theory is no longer possible to apply the nevertheless, it has not become completely redundant and its chief value lies in emphasizing the fact that it is absolutely essential to develop adequate checks and balances to prevent administrative arbitrariness. Thus, it has been stated about the doctrine, “Its objective is the preservation of political safeguards against capricious exercise of power; and incidentally, it lays down lines of an effective division of functions. Its logic is the logic of popularity...
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...Question: Discuss the main charges leveled by Bebchuk and Fried against executive compensation practices in US corporations. Answer: Bebchuk and Fried (the authors) take the following dual approach to the analysis of executive compensation contracts: 1. That, as designed by the board and shareholders, contracts help alleviate agency problems between managers and shareholders (the “optimal contracting” approach). 2. That they are a part of the agency problem itself (the “managerial power” approach). While the traditional compensation literature takes the optimal contracting view, it is difficult to see, at least with hindsight, why a competing approach did not exist for some time. After all, no contracts are complete or without side effects. It is somewhat more confounding, when one is provided an overview of the limitations of the optimal contracting approach. Specifically, the authors provide the following challenges to the approach: A. Faulty logic: If managers need contracts to optimize their behavior as agents, why wouldn’t directors? The optimal contracting approach is based on the simplistic assumption that directors are implicitly good representatives of shareholders. B. Director incentives: Directors who wish to be elected or re-elected are not likely to be adequately confrontational with the CEO because the CEO ultimately has influence over the director selection process. The hope that directors’ share ownership would lead them to overcome this hurdle is not borne...
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...Presidential power has been an important topic of consideration and debate since the founding of the nation. Many presidents have tested the limits of the Constitutional provisions regarding the authorities of the executive branch, and in response, both the judicial and legislative branches have imposed the proper checks and balances via court rulings and newly legislated limitations. In modern American politics, many question the Constitutional legitimacy of various executive actions taken by the most recent presidents. However, the expansion of presidential power is certainly not unique to Presidents Bush or Obama. Throughout the 20th and 21st centuries, presidents have gradually increased their powers in response to wars, terrorism, and congressional gridlock, among other things. Furthermore, the broad definition of the executive branch’s duties found in the second article of the Constitution has led to contradicting interpretations about the proper applications of the executive powers. As...
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...Constitution was a separation of powers and a system of checks and balances because man was perceived as a fallen creature and would always yearn for more power.” Checks and balances is a system that prevents any of the branches in our government from exerting an excessive amount of power. Each of the branches of the government can influence the decisions of the other branches. The branches all have to cooperate in the decision making process so that the system runs smoothly. The structure of the government is created in Article I, Article II, and Article III of the Constitution. The three branches of the government are the legislative branch, the executive branch, and...
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...apart from that of its members as well as distinct and inherent powers and liabilities (Webster Dictionary).” Although made up of people, being separate or apart from its members also equals unaccountability. The question of “who pays when a company goes under” is at the forefront of discussions today. Corporations are developed to serve society, meet a need or provide a service. Over the years, however, the good intentioned corporation has evolved into a greed machine that has lost site of the community that it serves and the people employed who ultimately perform the work. The steady parade of top executives confessing to engage in price gouging, tax dodges, accounting shams, employee rip-offs, and other shady unacceptable acts are coming to light daily. Unethical and illegal practices are documented from the RJR Nabisco scandals in 1988 to today’s Enron, WorldCom, Merrill Lynch, Arthur Anderson, Xerox, and endless other corporations. The world realizes now that corporate greed is not about one-bad company, but large companies in general that have adopted unacceptable guidelines for corporate behavior and an overall attitude that greed is acceptable. The bottom line, insatiable need for growth, amoral corporate behavior, expendable and exploitation of employees, and the corporate culture of classes have all led to the current issues of corporate greed that is running rampant throughout companies today (Corporate Power, retrieved April 26, 2003). The first rule of corporate behavior...
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...apart from that of its members as well as distinct and inherent powers and liabilities (Webster Dictionary).” Although made up of people, being separate or apart from its members also equals unaccountability. The question of “who pays when a company goes under” is at the forefront of discussions today. Corporations are developed to serve society, meet a need or provide a service. Over the years, however, the good intentioned corporation has evolved into a greed machine that has lost site of the community that it serves and the people employed who ultimately perform the work. The steady parade of top executives confessing to engage in price gouging, tax dodges, accounting shams, employee rip-offs, and other shady unacceptable acts are coming to light daily. Unethical and illegal practices are documented from the RJR Nabisco scandals in 1988 to today’s Enron, WorldCom, Merrill Lynch, Arthur Anderson, Xerox, and endless other corporations. The world realizes now that corporate greed is not about one-bad company, but large companies in general that have adopted unacceptable guidelines for corporate behavior and an overall attitude that greed is acceptable. The bottom line, insatiable need for growth, amoral corporate behavior, expendable and exploitation of employees, and the corporate culture of classes have all led to the current issues of corporate greed that is running rampant throughout companies today (Corporate Power, retrieved April 26, 2003). The first rule of corporate behavior...
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...by article III of the Constitution. The Judicial branch is given great power over the common law, but still very limited due to a complex system or checks and balances. The Federalist Papers 78-83 describes in great detail the newly proposed system of judicial government. The author of these papers was Alexander Hamilton. John Jay, and James Madison contributed to the other parts of the Federalist. The most interesting aspect of the judicial branch is the way it fits into the system that also is comprised of the Executive branch, and the legislative branch. Alexander Hamilton writes, “The judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the constitution; because it will be least in a capacity to annoy or injure them”. The executive branch can be viewed as the, “sword of the community”, and the legislative has the power to create the laws the all citizens of the United States must follow (Hamilton 78). The brilliant thing is even though it seems the judicial branch of government does not carry as much power, it never states that in Hamilton’s letters due to the fact that the judicial branch is considered an “indispensable ingredient” (Hamilton 78). The power of the judicial branch may be considered not as direct as the other branches, but is still powerful nonetheless. The legislative branch and executive branch together have the power and ability to pass laws that the people must follow, but who keeps those...
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...he said to his accountant; ‘This business is mine and I’ll run it as I like. My board of directors will do as I tell them, and I’ll not put up with interference from shareholders’. Discuss the legal and governance issues which may suggest that Mr. Morris is incorrect in what he said to his accountant. 3. Critically evaluate the recommendations of the Cadbury Committee. ANSWERS. 1. In any question on corporate governance (CG), start by explaining what the term means. According to the OECD definition (p372 your textbook), CG is the system by which companies are directed and controlled. It means the distribution of powers and duties within a company between its principal stakeholders. It is the mechanism by which a company’s strategy and objectives are set. CG also means the distribution of powers between the main stakeholders. These are shareholders, employees, customers, directors, creditors, the tax authorities. Remember, one of the goals of CG is to align the interests of the providers of capital- the investors and shareholders- with those of the managers of that capital- the directors of the company. This is the basis of ‘agency theory’. The risk is always that the managers will run the company for their own personal gain, at the expense of the owners (the shareholders). So, if we give directors share options (the right to buy shares at a certain lower price if they can get the price on the stock exchange to rise to a certain level)...
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...The Constitution, created by the Founding Fathers, limited the power the national government had. With this new addition for the United States, the national government wouldn’t become too powerful and take over like the king of England. The people didn’t want a government that would become too powerful and turn into a monarchy. This new addition was made after the Articles of Confederation failed to rule America. The Constitution included a government with three branches, the Legislative branch, Judicial, and Executive branch. These three branches would have power over different things and neither three would have more power over the others. This way, people would feel safe and wouldn’t be afraid their national government would become too strong. And we still have this type of government today....
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...As you have seen already, companies have always been subject to quite strict regulation. Thus there are detailed requirements in relation to company formation, corporate administration and corporate finance. Despite all this regulation a number of issues have continued to cause considerable unrest and political controversy. The main concerns have centred on the apparent lack of effective control of directors of public listed companies which have manifested themselves in perceived excessive remuneration packages and mismanagement leading to a number of high-profile corporate collapses. Public listed companies employ thousands of employees and are the recipients of billions of pounds in investment by individuals and institutional investors such as pension funds. It follows that all governments, in the UK, in Europe and throughout the world, consider it crucial that public confidence in such companies is maintained. The attempts to effectively control the remuneration of directors and the activities of directors in their management of public companies so as to avoid high profile scandals are known as corporate governance. It should be noted that corporate governance is not static, but rather develops to meet the urgent issues of the day. Thus, for example, the effect of corporate activities upon the environment now falls to be included within the ambit of corporate governance. What is Corporate Governance? The term “corporate governance” is not defined by legislation...
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...influenced by the works of political theorists such as Montesquieu and Locke. The Founding Fathers favoured a government that prevented any individual or particular group becoming tyrannical. Furthermore, they strongly opposed the notion of excessive government power, seen as the potential threat to individual freedom, wanting to protect minorities as well as the population as a whole, from arbitrary or unjust rule. Consequently, the Founding Fathers outlined main provisions within the US constitution in order to avoid tyranny: the separation of powers, a federal structure of government and also providing citizens inalienable and entrenched rights through the implementation of the Bill of Rights. Arguably, these provisions as a result mostly ensure, as the Founding Fathers had hope to achieve, limited government, in so much as the size and scope of the federal government is limited to an extent in which it is necessary only for the common good of people. The separation of powers prevalent in the USA, whereby political power is distributed between the executive, the legislature and the judiciary branches of government, were adopted from the Founding Fathers by the principles of Montesquieu, who argued for a separation of powers into legislative, executive and judiciary branches in order to avoid tyranny. This framework of government implies not only the independence of government, therefore a separation of personnel (for example, both Hilary Clinton and Barack Obama had to give up their...
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...Company Law Cons Even though the Hong Kong Bribery Law acts effectively in anti-corruption compared to the mainland bribery law, there are still some loopholes, especially when compared to the UK Bribery Act and the US Foreign Corrupt Practices Act. Similar to the effectives of the Bribery Law, the defects of the HK bribery law also covers equality, enforceability, recourse efficiency and law as a reflection of community standards and expectation four aspects, and each will be discussed with relevant cases. 1. Equality 2.1 Foreign bribes With the prevalence of overseas corruption, most of the countries have set specific regulation against foreign bribes. For example, both the UK Bribery Act and the US Foreign Corrupt Practices Act (FCPA) make it an offence to bribe foreign officials. Under the Bribery Act a “foreign public official “ is defined more narrowly than under the FCPA but sill includes (1) anyone who holds a foreign legislative or judicial position; (2) individuals who exercise a public function for a foreign country, territory, public agency or public enterprise o; or (3) any official or agent of a public organization. On the other hand, the Hong Kong Bribery Law does not specifically cover the foreign bribes, which results in the controversial judgment on the case HKSAR v. Krieger . In this case, the defendants, the officers of a Hong Kong subsidiary of the Swire Group of Companies were accused of conspiring with a Macau businessman to offer...
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...Shareholders Watchdog, Inc. 777 Wall Street New York, NY 10005 December 7, 2011 RE: Is CEO Compensation Fair? Dear employee, Accompanying this letter is our completed report that discusses the issue of the fairness of current CEO compensation. Although there are two sides of this argument, recent legislation and regulations for reform tend to support those who believe it is unfair. We have evaluated the current standards of CEO compensation and examined why both sides think they should prevail. There are some advantages that strongly support CEO’s huge salaries, including the following: * Provides incentives and motivates the CEO to obtain or surpass corporate objectives * Retains key-value leaders for the long-term, resulting in consistent corporate success * Creates a strong CEO confidence for him/her to reinvest in the corporation (bonds) Our overall research indicates that CEO compensation does not reflect actual performance in most cases. Many CEO’s are grossly over compensated (including stock options, bonuses, hedge funds, and other benefits). The “Golden Parachute” guarantee adds insult to injury. Based on our research, conducted from the UNLV Library periodicals database and online sources, we recommend the following: * Require corporations to adhere to sections 951, 953, 955 and 956 of the Dodd-Frank Bill * Maintain a collective (“Esprit de corps”) work force environment for all employees * Consult third party professional...
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...1st Internal Assignment Administrative Law The Doctrine of Separation of Power Clive D’souza 13010124119 Division B III Year Introduction: The Government of any country will be the agency or machinery through which the will of the people is realised, expressed and formulated. But for the will of the people to be so expressed, realised and formulated, there needs to be a well organized system which works together, jointly as well as separately for ultimate achievement of the goal, which in a democracy would be to help people realise their will, express that will and help the people to formulate the ideas as to what is right for society and be part of what would then become ideally, a true and well functioning democracy. The concept as stated above can be compared with the functioning of any team, be it a multi-national corporation or of a football team, where the former needs people to work on ideas for new products, need an accounts department to check on the cash flows and revenues, a marketing team to market the product well enough to the people through advertisements or for the latter where the defenders ensure that goals do not go in against their team, the midfield ensures possession of the ball and creativity to pass the ball to the strikers of the team and the strikers of the team ensure that the passes delivered to them is by the midfield, to score the ultimate goal that the team seeks. What we see through this example is that, all of the functions, although...
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...The Role of Corporate Law in Preventing a Financial Crisis: Reflections on In re Citigroup Inc. Shareholder Derivative Litigation Franklin A. Gevurtz* TABLE OF CONTENTS I. INTRODUCTION .................................................................................................. II. CITIGROUP AS A CASE STUDY IN EXCESSIVE RISK-TAKING .............................. III. TOOLS FOR CURBING EXCESSIVE RISK-TAKING AND THE ROLE OF CORPORATE LAW ............................................................................................... A. The Tools for Curbing Excessive Risk-taking ............................................. 1. Regulation of Business Activities .......................................................... 2. Capital Requirements ........................................................................... 3. Compensation Rules ............................................................................. 4. Liability for Unreasonable Risks .......................................................... 5. Selection of Management (Rules of Corporate Governance) ............... B. Dividing the Tools Between Banking and Corporate Law .......................... IV. WHY IT MATTERS: CITIGROUP AS AN ILLUSTRATION OF THE LIMITATIONS OF STATE CORPORATE LAW ........................................................ A. Citigroup As a Case Study In Weak Corporate Law................................... 1. Overview ..................................................
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