Faculty & Research
The faculty of Duke Law School is made up of innovative and influential scholars who are also passionate, creative, and caring teachers.
Duke Law professors are leaders in a broad range of fields and highly regarded for their research, writing, and public service. A community of scholars, they are collegial, collaborative, and interdisciplinary, and many hold joint appointments or collaborate with colleagues in other Duke schools and departments.
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The deep and ongoing engagement of our faculty with the subjects that they study and teach and the students they mentor creates an intellectual excitement that is palpable in our classrooms and hallways and is the foundation for an atmosphere of collaboration and respect that defines our school culture.
Paper by Eldar et al. finds correlation between dual-class IPOs and founders' bargaining power
A dataset and working paper from Professor of Law, Economics and Finance Ofer Eldar and co-authors Dhruv Aggarwal (Yale), Yael V. Hochberg (Rice), and Lubomir P. Litov (University of Oklahoma) finds a correlation between the rise of dual-class IPOs and company founders' bargaining power.
In The Rise of Dual-Class Stock IPOs, Eldar et al. examined 5,760 IPOs completed from 1994-2019. Of those, 614 were for companies with a dual-class stock structure, or at least two classes of common shares with different voting rights. Many companies that went public during this period with a dual-class structure are in the software and cloud-based services industries, including Facebook, Google, LinkedIn, Lyft, and Snap.
The authors sought to identify factors that account for the rise of such structures in recent years, and found a correlation between the amount of control exerted by company founders compared with investors and the likelihood that a company would go public with a dual-class stock structure that confers different voting and economic rights on holders of different class shares. Contributing factors include greater availability of venture capital financing, which increases founders’ bargaining power; lower capital requirements for cloud-based industries, which lowers the bargaining power of VC investors; and an increase in foreign issuer IPOs, which are more likely to be founder-controlled.
"Our findings provide critical input for evaluating policy proposals that affect the nature of public and private markets," the authors write. "They suggest that policies to liberalize private markets by loosening the restrictions on selling and trading in private securities may not only make public issuances less desirable, but may also increase the likelihood that the firms that do ultimately go public will be controlled by their founders. ... The broader ramifications of a growing number of controlled public firms in a shrinking public market require further analysis."
Fletcher calls for systematized disclosure of workforce demographics to help corporations set and achieve racial equity goals
Following the killing of George Floyd in summer 2020, many corporations issued public statements of support for Black Lives Matter and other social justice movements. But many of those gestures amounted to little more than marketing, says Professor Gina-Gail S. Fletcher, a corporate law scholar.
In their essay “Equality Metrics,” published in June on Yale Law Journal Forum, Fletcher and co-author Veronica Root Martinez of Notre Dame Law School, call on corporations to take meaningful steps to identify and address racial bias and discrimination within their organizations, including the systematic disclosure of workforce and supply chain demographics. They offer five specific, measurable steps firms can enact to identify and eliminate inequality and they argue that, because of the financial leverage they hold, large institutional investors are ideally positioned to demand these changes from the companies they invest in.
Fletcher says companies often point to diversification of their corporate boards as an indicator of progress in racial equity - but that isn't necessarily the best marker. "If [companies] have to disclose information about what your employee workforce looks like, potentially that is going to show that you may have two or three people of color on your board, but what does it mean for your workforce and your supply chain and thinking more deeply about the problems? Do you have the same percentages reflected in the workforce? And if you do, what does it look like at each level? Are your workers of color just in the lowest category? What do they look like at senior levels, senior management? What does it look like throughout your structure? That’s the information that we are saying firms should gather and disclose."