CORPORATE
GOVERNANCE
The Impact of
Institutional Investors
A Business Law Symposium
Sponsored by the Virginia Law & Business Review
and the Virginia Law and Business Society
FRIDAY, FEBRUARY 16, 2007
Un i v e r s i t y of Vi r gi n i a
S C H O O L O F L AW
SCHEDULE
9:00 AM
CONTINENTAL BREAKFAST
9:30 AM
WELCOME
Dave Brown, Virginia Law & Business Review
9:40 AM
INTRODUCTION
Michael J. Schill, Darden School of Business
10:15 AM
HEDGE FUND ACTIVISM, CORPORATE
GOVERNANCE, AND FIRM PERFORMANCE
Randall S. Thomas, Vanderbilt Law School
11:30 AM
MUTUAL FUNDS/INSTITUTIONAL INVESTOR
BOARD REPRESENTATION: A STEP TOWARD
IMPROVED BOARD FUNCTION
Charles Elson ’85, University of Delaware
Weinberg Center for Corporate Governance
12:30 PM
1:30 PM
LUNCH
HEDGE FUNDS AND GOVERNANCE
TARGETS
William W. Bratton, Georgetown Law Center
2:45 PM
INSTITUTIONAL INVESTOR PANEL
Paul Mahoney, Moderator, University of
Virginia School of Law
Michael Bills, President, Bluestem Asset
Management, LLC
Paul Stevens ’78, President, Investment
Company Institute
Michael S. Miller ’77, Managing Director,
The Vanguard Group
Bill Carmichael ’68, Chairman, Board of
Trustees of the Columbia Nations Funds
4:00 PM
RECEPTION
CORPORATE
GOVERNANCE
The Impact of Institutional Investors
About 60 percent of all listed corporate stock in the
United States is held by mutual funds, private equity
groups, pension funds, and hedge funds. The largest 100
money managers control over half of all U.S. equity. As
a result, these institutional investors have a significant
effect on U.S. corporations and the global economy.
Recently, many of these institutional investor groups
have taken a very active approach to investing by pushing
for specific changes within individual corporations. This
symposium seeks to provide students, professors and
practitioners with a greater understanding of institutional investors and their impact on corporate governance.
PARTICIPANTS
MICHAEL BILLS
Michael Bills is the president of Bluestem Asset Management, LLC, which is the general partner to Bluestem
Partners, LP, a fund of hedge funds. For the past three
years, he has served as a director of Intergraph and has
remained on the board after the company was purchased
by a private equity firm. Before founding Bluestem, he
served as chief investment officer for the University of
Virginia from June 2001 until January 2003. He formerly
served as the senior managing director and chief operating officer at Tiger Management, LLC. Bills also serves on
the board of Janus Capital Group, Charlottesville Tomorrow, The Nature Conservancy, and the advisory boards of
Lone Pine Capital and HighVista Strategies.
WILLIAM W. BRATTON
Prior to joining the Georgetown Law Center faculty in
2003, William W. Bratton was the Samuel Tyler Research
Professor at the George Washington University Law
School. Bratton previously was the Kaiser Professor of
Law and director of the Heyman Center on Corporate
Governance at Cardozo Law School, and Professor of
Law and Governor Woodrow Wilson Scholar at Rutgers
Law School, Newark. He also has been the Unilever Visiting Professor at the Faculty of Law of the University of
Leiden and a visiting professor at the Duke and Stanford
law schools. Before becoming a teacher, Bratton clerked
for Judge William H. Timbers of the Second Circuit U.S.
Court of Appeals and practiced corporate law at Debevoise & Plimpton in New York. Bratton is the author of
Corporate Finance: Cases and Materials, and the co-editor
of an Oxford Press collection of essays on regulatory
competition. He also has published many law review
articles and book chapters on topics in corporate law, law
and economics, and legal history.
BILL CARMICHAEL ’68
Bill Carmichael is the chairman of the Board of Trustees
of the Columbia Nations Funds, mutual funds with $190
billion advised by the Bank of America. He took over as
chairman shortly before Eliot Spitzer announced the
mutual fund late trading and market timing scandal.
As a result, he had to take many corrective governancerelated actions. He is also on the boards of the Simmons
Company (owned by an LBO firm), where he chairs
the Audit Committee; Cobra Electronics Corp. (NASDAQ), where he chairs the Finance Committee and the
Nominating and Governance Committee and is on the
Audit and Compensation committees; Finish Line, Inc.
(NASDAQ), where he chairs the Audit Committee; and
Spectrum Brands (NYSE), where he chairs the Audit
Committee and is on the Compensation Committee. In
these board positions he has been on special committees
for acquisitions, sale of the company, and restructurings.
CHARLES M. ELSON ’85
Charles M. Elson is the Edgar S. Woolard, Jr., Chair
in Corporate Governance and the director of the John
L. Weinberg Center for Corporate Governance at the
University of Delaware. He is also “of counsel” to the
law firm Holland & Knight. He formerly served as a
professor of law at Stetson University College of Law in
St. Petersburg, Florida, from 1990 until 2001. His fields
of expertise include corporations, securities regulation
and corporate governance. He is a graduate of Harvard
College and the University of Virginia Law School, and
has served as a law clerk to Judges J. Harvie Wilkinson
III and Elbert P. Tuttle of the U.S. Court of Appeals
for the Fourth and Eleventh Circuits. He is a Salvatori
Fellow at the Heritage Foundation in Washington, D.C.,
and a member of the American Law Institute. Elson has
written extensively on the subject of boards of directors.
He is a frequent contributor on corporate governance
issues to various scholarly and popular publications. He
served on the National Association of Corporate Directors’ Commissions on Director Compensation, Director
Professionalism, CEO Succession, Audit Committees,
Strategic Planning and Director Evaluation; was a member of its Best Practices Council on Coping With Fraud
and Other Illegal Activity; and presently serves on that
organization’s Advisory Council. He is vice chairman of
the ABA Business Law Section’s Committee on Corporate
Governance and a member of its Committee on Corporate Laws. Additionally, Elson has served as an adviser
and consultant to a number of major corporations and
nonprofit organizations.
PAUL G. MAHONEY
Paul Mahoney is a David and Mary Harrison Distinguished Professor of Law and co-director of the John M.
Olin Program in Law and Economics at the University
of Virginia School of Law. He teaches securities regulation, corporations, corporate finance, contracts and
quantitative methods at the Law School and Introduction to Business Law at the Darden School of Business
Administration. Mahoney joined the Law School faculty
in 1990 after practicing law with New York firm Sullivan
& Cromwell and serving as law clerk to Judge Ralph K.
Winter, Jr. of the U.S. Court of Appeals for the Second
Circuit and Justice Thurgood Marshall of the Supreme
Court of the United States. Mahoney has been a visiting
professor at the University of Chicago Law School, the
University of Southern California Law School and the
University of Toronto Faculty of Law. He has also worked
on legal reform projects in Kazakhstan, Kyrgyzstan,
Mongolia and Nepal.
MICHAEL S. MILLER ’77
Michael Miller is one of the most-senior executives at
Vanguard, one of the largest mutual fund companies in
the world with more than $1.1 trillion in U.S. fund assets
under management. He is responsible for the company’s
strategic planning, competitive analysis, portfolio
review, new fund and business development, investment
counseling and research, fund information services,
marketing, and corporate communications, government
relations and public relations functions, as well as the
firm’s quality management program, compliance, fraud
detection/prevention, information security and business
contingency planning operations.
MICHAEL J. SCHILL
Michael J. Schill, Assistant Professor of Business Administration at the Darden School of Business Administration, teaches in the finance area. His research focuses
on the impact of market friction on capital market price
formation. His recent projects examine market behavior
for such issues as price momentum, post equity offering
performance, overseas listing decisions, higher-order
market factors, and Internet stock valuations. Schill
joined the Darden faculty in 2001. He previously taught
at the University of California-Riverside and the University of Washington and worked as a management
consultant with Marakon Associates.
PAUL S. STEVENS ’78
Paul Schott Stevens has been president and CEO of the
Investment Company Institute (ICI), the national as-
sociation of U.S. investment companies, since 2004. He
also is a director of the ICI Mutual Insurance Company.
From 1993-97, he was general counsel of ICI. Previously,
Stevens was a partner of Dechert LLP and a leader of that
firm’s financial services practice. He was chief counsel
for mutual funds and international enterprise at Charles
Schwab & Co. Between 1985 and 1989, he served at the
White House and the Pentagon, as special assistant for
national security affairs to President Reagan, executive
secretary of the National Security Council, and in other
senior positions. Upon leaving government service,
he was awarded the Department of Defense Medal for
Distinguished Public Service, the DOD’s highest civilian
decoration.
RANDALL S. THOMAS
Randall S. Thomas is a Professor of Law, the director of
the Law and Business Program, and the director of the
Vanderbilt-in-Venice Program at the Vanderbilt University Law School. He is also a Professor of Management at
the Owen School of Management. He received a J.D. and
a Ph.D. in economics from the University of Michigan
and a B.A. from Haverford College. Prior to entering
teaching in 1990, he practiced corporate and securities
law for several years at Skadden, Arps, Slate, Meagher
& Flom and at Potter Anderson & Corroon, both in
Wilmington, Delaware. Thomas’s recent publications
are concentrated in several areas at the intersection of
law and finance, including hedge fund and institutional
investor activism, shareholder voting, executive compensation and shareholder litigation. He has also applied
economic analysis in numerous studies covering a
broad variety of legal issues in the fields of corporations,
securities law, bankruptcy, environmental law and civil
procedure. His current work is concentrated on empirical
projects concerning hedge fund and institutional investor activism, CEO employment contracts, state corporate
and federal securities shareholder litigation and international executive pay.