Meet the Author: Robert Bird
SSRN
Meet the Author: Robert Bird
Robert Bird is a professor of business law and the Eversource Energy Chair in Business Ethicsat the University of Connecticut. He conducts research in legal strategy, business ethics, compliance, employment law, and related fields. Bird has authored over eighty academic publications, including articles in the American Business Law Journal, Journal of Law and Economics, Law and Society Review, Boston University Law Review, Boston College Law Review, and the Harvard Journal of Law and Public Policy. Robert has received sixteen research-related awards – including the Academy of Legal Studies in Businessbest international paper award, distinguished proceedings award, and the Holmes-Cardozo best overall conference paper award – and various teaching-related awards, such as the outstanding article of the year award two years in a row from the Journal of Legal Studies Education, and the student-selected Alpha Kappa Psi Teacher of the Year award. Robert is also a manuscript reviewer for several journals and is a past president of the Academy of Legal Studies in Business, the international academic organization for professors of law in schools of business. He spoke with SSRN about the importance of legal education within business schools and how legal knowledge provides value to organizations, both for their bottom line and for creating businesses for good.
Q: Your main research and teaching focus has surrounded the intersection of business and law. What is it about the relationship between these two that led you to explore it further?
A: As an undergraduate management information systems major at Fairfield University, I became interested in how legal issues impacted the development of new technologies. I remember writing a paper in the early 1990s on the legal and ethical implications of expert systems, a predecessor to today’s artificial intelligence. When I began my dual JD/MBA degree at Boston University, I found both fields fascinating. Business rewards people who have effective problem-solving skills, strong communication skills, and the ability to lead. Legal studies emphasize thinking on your feet, clear and persuasive legal writing, and an enduring sense of justice and fairness. Law school helped me to connect disparate ideas in a novel and creative way. Business school helped me solve complex problems and connect thought to action. The disciplines, at least to me, seemed to naturally work together, and I found it irresistible to explore more deeply.
I do not teach in a law school. I’m a lawyer in a business school. For years I felt like a cat in a dog show. The disciplines think in a fundamentally different manner. Traditionally, business faculty research as social scientists, while law faculty emphasize the humanist side of knowledge. Business faculty are skilled at statistical analysis and modeling, while law faculty are adept with abstract ideas and interpretation of textual knowledge. This has its challenges and its opportunities. In a law school, I doubt any professor questions the importance of law in business. In a business school, I initially had to address fundamental questions: “Why do our business students need to know the law? Can’t they just call a lawyer?”
Having to respond to these kinds of questions has made me a better teacher and scholar. Initially, my standard answer was that “lawyers are important because they keep our students out of trouble, and they prevent companies from being investigated by regulators that result in costly penalties.” No less important, however, is that lawyers can’t be present for every decision a manager makes, and some bad business decisions result in irreversible liability. Businesspeople need to know how the law works in order to minimize their legal risks. Today, I very much value my business school affiliation.
Legal knowledge can also be used as a source of strategic value for the company. If business people see law as a domain that is just as value-creating as finance and marketing and operations, they will take the law more seriously. They will increase their respect for the rule of law. As a result, you’ll have a company that is inherently primed to act with integrity, follow ethical values, and be socially responsible. That is valuable because what is unethical today is often illegal tomorrow.
I think studying business is interesting because company operations are intertwined with some of the most important issues in society. Companies are making money, but they’re also impacting the societies in which they sell products. Law focuses on justice, equity and fairness, and I was interested in how companies can not only add value to their bottom line but also help build a better world: business that respects human rights, business that aspires to ethical and sustainable goals. Business schools that know the importance of legal knowledge will give their students a legal education, and those students are more likely to graduate as moral agents for change.
Q: In your new book, “Legal Knowledge in Organizations,”you discuss how legal knowledge can greatly benefit firms by providing them with a distinct competitive advantage. In doing so, you lay out five pathways that firms use to pursue legal strategies. So now going back a ways, in your paper “Pathways of Legal Strategy,” which was included in the Stanford Journal of Law, Business, and Finance in 2008 and was later posted on SSRN, you talk similarly about five pathways. How have you developed the concept of these pathways over time, leading now to your recent book?
A: I have been interested in how legal knowledge can be a source of value since 2001, when I just started full-time teaching. I still have an inexplicably pink sheet of paper upon which I scribbled the date and title “Ideas for Managerial Law for Strategic Advantage.” Because legal knowledge is so important in the organization, I was interested in how legal knowledge is used by companies, how it can be a source of value for companies, and how legal experts within organizations can deploy legal knowledge. So much of what is written about law in business relates to litigation and conflict. I wanted to learn more about how legal and business experts can work together successfully. Those ideas scribbled on that sheet of paper later became the foundation for my recently published book.
However, twenty years ago there was limited research on how to use legal knowledge as a source of value for organizations. I looked at a number of companies and how they behaved, and I noticed that there were five different pathways – or patterns – that companies seemed to follow. There’s an avoidance pathway, where the companies ignore legal rules and circumvent enforcement. A firm following the conformance pathway perceives law as little more than a box to be checked, after which you move on to the more important aspects of business. In the prevention pathway, firms will take business steps to avoid legal problems, such as implementing business policies that prevent legal liability from appearing in the first place. This is where most companies believe their best practices are, with legal and compliance experts.
However, there are two additional pathways: the value pathway perceives law as a source of competitive advantage and shows how legal knowledge can help you open up new markets, manage legal risk more efficiently and have more resources than your competitors do. Then finally, the transformative pathway uses legal knowledge to fundamentally change how the organization works. That means building a culture of integrity in the organization, enduring respect for legal rules, and supporting a close partnership between legal experts and businesspeople that generates a long-term competitive advantage that rivals cannot easily match. These pathways are explored in more detail in my book.
The book also highlights how legal knowledge helps managers better understand and manage legal risk in a dynamic fashion. This can result in a first mover advantage in a new market. Companies can use the law to capture value in a way their rivals haven’t, and sustain that advantage, because they’re more versed in how the laws work than their competitors. I have applied these pathways of legal strategy to business challenges ranging from whistleblower laws to cannabis regulation.
There’s a rich volume of information in this book. I also focus on legal risk management, and I apply an acronym called VUCA, which stands for volatility, uncertainty, complexity and ambiguity. Each of those four risk management techniques presents a distinct risk but also a distinct opportunity that can help companies assess risk, effectively avoid legal liability, and generate value through a well-coordinated response. The VUCA method perceives legal risk in a novel way, enabling firms to manage legal risk better than their rivals.
Q: Of the five pathways you just discussed, the fifth, transformation, can bring significant benefits, but it is one that you’ve said few companies can successfully achieve, as it requires the company to rethink the way the entire organization works. What are some of the barriers that might prevent well-meaning companies from following the transformation pathway?
A: The transformation pathway requires a fundamental change in the culture of the organization that fully embraces the value of legal knowledge as a strategic asset. However, there are two primary barriers that prevent this from happening. One barrier is that lawyers will sometimes be too risk averse and will focus on the technical nature of law rather than integrating their decisions into the strategy of the firm. The other barrier is that managers do not receive sufficient legal education to appreciate the importance of law or productively communicate with their legal team. If a manager does not know what the law is or how the law works, the manager can’t ask questions of their legal counsel such as, “Can you build me a legal strategy? Can you work with me as a strategic partner?”
One of my key missions is to highlight the critical importance of legal education in business schools. At schools like the University of Connecticut, we are committed to that legal education. Every student that earns an undergraduate degree or an MBA receives at least one course in business law and ethics. These students understand what law is, how law works, and why it’s important to companies.
Some business schools don’t require legal knowledge to get an MBA. Their students graduate with their business degree, and even though they have this elite pedigree, they don’t understand the law. They have not learned how to read a contract, legally hire and fire an employee, avoid insider trading, deal with regulators, negotiate with counter parties, protect the environment, and a variety of other legal issues that companies face every day. No business school should bestow a business degree on a student whose entire legal knowledge comes from watching reruns of Law & Order.
Law is a critical part of business education. If they don’t get legal education, they’re not going to think of their lawyers as anything more than litigators. Lawyers can be so much more valuable than that: they can be strategic partners, they can be thought leaders, they can help change the culture of the organization to one that’s committed to integrity, which is not only good for society, but improves the bottom line. Legal knowledge is the last great untapped source of competitive advantage in organizations. My recently published book helps unlock that value for anyone who wants to read it.
Q: What aspects of the book do you think are especially timely now?
A: Right now, regulations are more complex, more comprehensive, and more punitive than at any other time in business history. Changes in presidential administrations, and radical shifts in how legal rules are enforced, do not create a steady state for companies. All that does is create turbulence for firms and increase their cost of operations. Companies can’t take efficient risks, and they can’t optimally plan for the future. Managers need legal knowledge now more than ever in order to handle the legal standards that are in a state of almost constant change.
In addition, law is critical for the global economy. Today, respect for the rule of law and the adherence to following the rule of law is being challenged in a way that it hasn’t in decades. Companies need the rule of law to survive. Unwise firms see the rule of law as just another burden or obligation or another box that needs to be checked. In fact, legal mandates establish the rules of global markets. Legal rules provide certainty in terms of their regulatory obligations, especially when they’re well written. Legal knowledge also helps companies understand how to manage their workforce and how to protect the environment.
Q: You’ve said in previous discussions, regarding why rules and regulations are so complex, that “words are finite and imprecise tools that are trying to govern and account for an infinite number of situations.” How would you suggest laws be structured in order to be succinct while still managing to capture an array of scenarios and account for possible loopholes? Where is that balance?
A: Legal regulation needs to be as simple as it needs to be, and no simpler. What does that mean? That means there are a bunch of ways to make laws functional and effective. First is that legislators need to be careful to draft rules that do not have deliberate opacity. The more specificity you can provide, the more guidance you have for firms. That said, if there is too much specificity, where firms lack the flexibility to respond to mandates, then the law becomes convoluted. Complex laws aren’t necessarily bad. Sometimes laws have to be complex to meet their goals. Convoluted laws, however, are unnecessarily complex, and that’s the kind of law that drafters need to avoid.
This may sound counterintuitive, but Americans enjoy the significant freedom where there is strong, consistent, and well-written regulation. For example, almost every city and town in the U.S. has traffic lights. Laws that require people to listen to traffic lights restrict freedom because they stop you from getting where you need to go, while others can cross the road. But if everyone just ignored traffic lights, there would be more traffic jams, accidents, and even deaths. Getting from one place to another would be much harder. Delivering goods and services would be more difficult. So, while traffic lights restrict freedom on one level, they actually increase the freedom of people overall to get where they need to go safely and quickly.
The same goes for markets. Without strong and well-written regulation, you create chaos. Law is an accelerant for commercial transactions. Laws help prevent corruption in markets. Laws enable companies to make and enforce contracts. Laws protect intellectual property rights. Laws enable free and fair global trade. Laws keep the peace so that business can flourish. You want strong business; you need strong legal rules. You want an efficient market; you need efficient regulation. Law and business go hand-in-hand to make a functioning society and global market thrive.
Q: You have many papers on SSRN, which have been frequently downloaded over the past twenty-plus years. Are there any in particular that you’d like to highlight?
A: I am currently studying the harmful impact that corporate tax avoidance has on society, and how tax avoidance can be more effectively prevented. I have an article talking about the moral economy against tax avoidance. A moral economy in this context is a network of beliefs that society has about certain economic practices. These beliefs arise from collectively held notions of fairness and equitable opportunity. When a wealthy taxpayer uses aggressive tax avoidance to squeeze through loopholes of legal rules and avoid paying taxes, that hurts everyone in society. A moral economy against tax avoidance would empower individuals in society to condemn the practice, thereby discouraging all but the most aggressive avoiders from circumventing their obligations to contribute to the public good.
I have also co-authored an article on an organization-centered approach to whistleblowing law. Most scholars study whistleblowing law from a legal perspective and how it applies to the organization. This article focuses on how organizations can engage in self-regulation in order to better manage whistleblowing risks. Whistleblowers may be perceived as just another cost of doing business, but whistleblowing laws can be a source of competitive advantage. Applying the five pathways of legal strategy researched earlier, this article shows how companies can leverage employees who are potential whistleblowers into valuable allies that create value for the organization.
Q: In addition to business law, you also have an interest in business ethics. What are the essential principles that companies must know in order to be ethical?
A: There are four principles of values-driven management that every organization should fully embrace. These four principles serve as four legs of a platform of responsible business practice. The first principle is business ethics, the internal values of the firm. Business ethics focuses on the individual decision-making in the organization that shapes how the organization functions on a day-to-day basis. Strong ethical principles can be the basis of a culture of integrity. By a culture of integrity, I mean ethical values that are so strong that employees comply with those values because they believe in them and not because they have to be asked to do so. The absence of ethical principles leaves companies morally adrift and prone to mistakes that can hurt the company’s reputation or trigger legal liability.
The second principle is corporate social responsibility, which focuses on a company’s obligation to its stakeholders. These include shareholders, employees, neighbors, community, society, regulators, suppliers, creditors, the environment, and others. The third principle is sustainability. Sustainability focuses on management of collective resources over time. What responsibility do organizations have not just today, but also next year, 20 years, and 50 years from now? How do we sustain an environment that will be preserved for our grandchildren and our great grandchildren?
The fourth principle is business and human rights. This focuses on inalienable rights that all persons have regardless of wealth or nationality. All people have a right to life, a right to education, a right to a fair wage, and a right to be able to raise a family in a safe environment, free from war and conflict. These rights are so strong they override the economic interests of corporations. Human rights are the vanguard of these values-driven principles.
Finally, my colleagues and I have developed a new program at UConn, a Master’s in Social Responsibility & Impact in Business. The program trains students not only in business principles, but also in how companies can be a source of good for society. They can also be agents for cultural change, promoting sustainability and human rights, and advancing goals of business ethics. We’re training both change makers and change accelerators in organizations. We can show them not only that acting responsibly is good for society, but also that it’s good for business in the long term. An ethical company is a profitable company. A sustainable company is a profitable company. That’s something that we are showing our students now.
Q: How do you think SSRN fits into the broader research and scholarship landscape?
A: I joined SSRN over 20 years ago, and it has been my go-to mechanism to distribute scholarship to the wider academic community. Virtually every manuscript that I’ve drafted goes on SSRN before it gets submitted to publication. I find it to be a key vector for disseminating my research before it eventually gets published. SSRN is a living embodiment of tomorrow’s research today. Instead of waiting potentially years to be formally published, through SSRN my working paper is shared with a wide audience in a short time.
I’m just a few quick clicks away from sharing my work with interested colleagues who will be able to easily find it. I don’t have to wait until publication. When you’re on SSRN, you’re in an ecosystem where people are looking for current knowledge, and if they find your work, they’re going to cite it before it gets to publication.
SSRN also brings research to me. The eJournals are one of the primary ways that I learn about research that’s not within my immediate network. SSRN is also excellent for accessing international scholarship. There are scholars in other countries that I may never hear about except for on SSRN. SSRN is a gateway to world scholarship.
You can see more work by Robert Bird on his SSRN Author page here
#meet #author #robert #birdMeet the Author: Robert Bird
SSRN
Meet the Author: Robert Bird
Robert Bird is a professor of business law and the Eversource Energy Chair in Business Ethicsat the University of Connecticut. He conducts research in legal strategy, business ethics, compliance, employment law, and related fields. Bird has authored over eighty academic publications, including articles in the American Business Law Journal, Journal of Law and Economics, Law and Society Review, Boston University Law Review, Boston College Law Review, and the Harvard Journal of Law and Public Policy. Robert has received sixteen research-related awards – including the Academy of Legal Studies in Businessbest international paper award, distinguished proceedings award, and the Holmes-Cardozo best overall conference paper award – and various teaching-related awards, such as the outstanding article of the year award two years in a row from the Journal of Legal Studies Education, and the student-selected Alpha Kappa Psi Teacher of the Year award. Robert is also a manuscript reviewer for several journals and is a past president of the Academy of Legal Studies in Business, the international academic organization for professors of law in schools of business. He spoke with SSRN about the importance of legal education within business schools and how legal knowledge provides value to organizations, both for their bottom line and for creating businesses for good.
Q: Your main research and teaching focus has surrounded the intersection of business and law. What is it about the relationship between these two that led you to explore it further?
A: As an undergraduate management information systems major at Fairfield University, I became interested in how legal issues impacted the development of new technologies. I remember writing a paper in the early 1990s on the legal and ethical implications of expert systems, a predecessor to today’s artificial intelligence. When I began my dual JD/MBA degree at Boston University, I found both fields fascinating. Business rewards people who have effective problem-solving skills, strong communication skills, and the ability to lead. Legal studies emphasize thinking on your feet, clear and persuasive legal writing, and an enduring sense of justice and fairness. Law school helped me to connect disparate ideas in a novel and creative way. Business school helped me solve complex problems and connect thought to action. The disciplines, at least to me, seemed to naturally work together, and I found it irresistible to explore more deeply.
I do not teach in a law school. I’m a lawyer in a business school. For years I felt like a cat in a dog show. The disciplines think in a fundamentally different manner. Traditionally, business faculty research as social scientists, while law faculty emphasize the humanist side of knowledge. Business faculty are skilled at statistical analysis and modeling, while law faculty are adept with abstract ideas and interpretation of textual knowledge. This has its challenges and its opportunities. In a law school, I doubt any professor questions the importance of law in business. In a business school, I initially had to address fundamental questions: “Why do our business students need to know the law? Can’t they just call a lawyer?”
Having to respond to these kinds of questions has made me a better teacher and scholar. Initially, my standard answer was that “lawyers are important because they keep our students out of trouble, and they prevent companies from being investigated by regulators that result in costly penalties.” No less important, however, is that lawyers can’t be present for every decision a manager makes, and some bad business decisions result in irreversible liability. Businesspeople need to know how the law works in order to minimize their legal risks. Today, I very much value my business school affiliation.
Legal knowledge can also be used as a source of strategic value for the company. If business people see law as a domain that is just as value-creating as finance and marketing and operations, they will take the law more seriously. They will increase their respect for the rule of law. As a result, you’ll have a company that is inherently primed to act with integrity, follow ethical values, and be socially responsible. That is valuable because what is unethical today is often illegal tomorrow.
I think studying business is interesting because company operations are intertwined with some of the most important issues in society. Companies are making money, but they’re also impacting the societies in which they sell products. Law focuses on justice, equity and fairness, and I was interested in how companies can not only add value to their bottom line but also help build a better world: business that respects human rights, business that aspires to ethical and sustainable goals. Business schools that know the importance of legal knowledge will give their students a legal education, and those students are more likely to graduate as moral agents for change.
Q: In your new book, “Legal Knowledge in Organizations,”you discuss how legal knowledge can greatly benefit firms by providing them with a distinct competitive advantage. In doing so, you lay out five pathways that firms use to pursue legal strategies. So now going back a ways, in your paper “Pathways of Legal Strategy,” which was included in the Stanford Journal of Law, Business, and Finance in 2008 and was later posted on SSRN, you talk similarly about five pathways. How have you developed the concept of these pathways over time, leading now to your recent book?
A: I have been interested in how legal knowledge can be a source of value since 2001, when I just started full-time teaching. I still have an inexplicably pink sheet of paper upon which I scribbled the date and title “Ideas for Managerial Law for Strategic Advantage.” Because legal knowledge is so important in the organization, I was interested in how legal knowledge is used by companies, how it can be a source of value for companies, and how legal experts within organizations can deploy legal knowledge. So much of what is written about law in business relates to litigation and conflict. I wanted to learn more about how legal and business experts can work together successfully. Those ideas scribbled on that sheet of paper later became the foundation for my recently published book.
However, twenty years ago there was limited research on how to use legal knowledge as a source of value for organizations. I looked at a number of companies and how they behaved, and I noticed that there were five different pathways – or patterns – that companies seemed to follow. There’s an avoidance pathway, where the companies ignore legal rules and circumvent enforcement. A firm following the conformance pathway perceives law as little more than a box to be checked, after which you move on to the more important aspects of business. In the prevention pathway, firms will take business steps to avoid legal problems, such as implementing business policies that prevent legal liability from appearing in the first place. This is where most companies believe their best practices are, with legal and compliance experts.
However, there are two additional pathways: the value pathway perceives law as a source of competitive advantage and shows how legal knowledge can help you open up new markets, manage legal risk more efficiently and have more resources than your competitors do. Then finally, the transformative pathway uses legal knowledge to fundamentally change how the organization works. That means building a culture of integrity in the organization, enduring respect for legal rules, and supporting a close partnership between legal experts and businesspeople that generates a long-term competitive advantage that rivals cannot easily match. These pathways are explored in more detail in my book.
The book also highlights how legal knowledge helps managers better understand and manage legal risk in a dynamic fashion. This can result in a first mover advantage in a new market. Companies can use the law to capture value in a way their rivals haven’t, and sustain that advantage, because they’re more versed in how the laws work than their competitors. I have applied these pathways of legal strategy to business challenges ranging from whistleblower laws to cannabis regulation.
There’s a rich volume of information in this book. I also focus on legal risk management, and I apply an acronym called VUCA, which stands for volatility, uncertainty, complexity and ambiguity. Each of those four risk management techniques presents a distinct risk but also a distinct opportunity that can help companies assess risk, effectively avoid legal liability, and generate value through a well-coordinated response. The VUCA method perceives legal risk in a novel way, enabling firms to manage legal risk better than their rivals.
Q: Of the five pathways you just discussed, the fifth, transformation, can bring significant benefits, but it is one that you’ve said few companies can successfully achieve, as it requires the company to rethink the way the entire organization works. What are some of the barriers that might prevent well-meaning companies from following the transformation pathway?
A: The transformation pathway requires a fundamental change in the culture of the organization that fully embraces the value of legal knowledge as a strategic asset. However, there are two primary barriers that prevent this from happening. One barrier is that lawyers will sometimes be too risk averse and will focus on the technical nature of law rather than integrating their decisions into the strategy of the firm. The other barrier is that managers do not receive sufficient legal education to appreciate the importance of law or productively communicate with their legal team. If a manager does not know what the law is or how the law works, the manager can’t ask questions of their legal counsel such as, “Can you build me a legal strategy? Can you work with me as a strategic partner?”
One of my key missions is to highlight the critical importance of legal education in business schools. At schools like the University of Connecticut, we are committed to that legal education. Every student that earns an undergraduate degree or an MBA receives at least one course in business law and ethics. These students understand what law is, how law works, and why it’s important to companies.
Some business schools don’t require legal knowledge to get an MBA. Their students graduate with their business degree, and even though they have this elite pedigree, they don’t understand the law. They have not learned how to read a contract, legally hire and fire an employee, avoid insider trading, deal with regulators, negotiate with counter parties, protect the environment, and a variety of other legal issues that companies face every day. No business school should bestow a business degree on a student whose entire legal knowledge comes from watching reruns of Law & Order.
Law is a critical part of business education. If they don’t get legal education, they’re not going to think of their lawyers as anything more than litigators. Lawyers can be so much more valuable than that: they can be strategic partners, they can be thought leaders, they can help change the culture of the organization to one that’s committed to integrity, which is not only good for society, but improves the bottom line. Legal knowledge is the last great untapped source of competitive advantage in organizations. My recently published book helps unlock that value for anyone who wants to read it.
Q: What aspects of the book do you think are especially timely now?
A: Right now, regulations are more complex, more comprehensive, and more punitive than at any other time in business history. Changes in presidential administrations, and radical shifts in how legal rules are enforced, do not create a steady state for companies. All that does is create turbulence for firms and increase their cost of operations. Companies can’t take efficient risks, and they can’t optimally plan for the future. Managers need legal knowledge now more than ever in order to handle the legal standards that are in a state of almost constant change.
In addition, law is critical for the global economy. Today, respect for the rule of law and the adherence to following the rule of law is being challenged in a way that it hasn’t in decades. Companies need the rule of law to survive. Unwise firms see the rule of law as just another burden or obligation or another box that needs to be checked. In fact, legal mandates establish the rules of global markets. Legal rules provide certainty in terms of their regulatory obligations, especially when they’re well written. Legal knowledge also helps companies understand how to manage their workforce and how to protect the environment.
Q: You’ve said in previous discussions, regarding why rules and regulations are so complex, that “words are finite and imprecise tools that are trying to govern and account for an infinite number of situations.” How would you suggest laws be structured in order to be succinct while still managing to capture an array of scenarios and account for possible loopholes? Where is that balance?
A: Legal regulation needs to be as simple as it needs to be, and no simpler. What does that mean? That means there are a bunch of ways to make laws functional and effective. First is that legislators need to be careful to draft rules that do not have deliberate opacity. The more specificity you can provide, the more guidance you have for firms. That said, if there is too much specificity, where firms lack the flexibility to respond to mandates, then the law becomes convoluted. Complex laws aren’t necessarily bad. Sometimes laws have to be complex to meet their goals. Convoluted laws, however, are unnecessarily complex, and that’s the kind of law that drafters need to avoid.
This may sound counterintuitive, but Americans enjoy the significant freedom where there is strong, consistent, and well-written regulation. For example, almost every city and town in the U.S. has traffic lights. Laws that require people to listen to traffic lights restrict freedom because they stop you from getting where you need to go, while others can cross the road. But if everyone just ignored traffic lights, there would be more traffic jams, accidents, and even deaths. Getting from one place to another would be much harder. Delivering goods and services would be more difficult. So, while traffic lights restrict freedom on one level, they actually increase the freedom of people overall to get where they need to go safely and quickly.
The same goes for markets. Without strong and well-written regulation, you create chaos. Law is an accelerant for commercial transactions. Laws help prevent corruption in markets. Laws enable companies to make and enforce contracts. Laws protect intellectual property rights. Laws enable free and fair global trade. Laws keep the peace so that business can flourish. You want strong business; you need strong legal rules. You want an efficient market; you need efficient regulation. Law and business go hand-in-hand to make a functioning society and global market thrive.
Q: You have many papers on SSRN, which have been frequently downloaded over the past twenty-plus years. Are there any in particular that you’d like to highlight?
A: I am currently studying the harmful impact that corporate tax avoidance has on society, and how tax avoidance can be more effectively prevented. I have an article talking about the moral economy against tax avoidance. A moral economy in this context is a network of beliefs that society has about certain economic practices. These beliefs arise from collectively held notions of fairness and equitable opportunity. When a wealthy taxpayer uses aggressive tax avoidance to squeeze through loopholes of legal rules and avoid paying taxes, that hurts everyone in society. A moral economy against tax avoidance would empower individuals in society to condemn the practice, thereby discouraging all but the most aggressive avoiders from circumventing their obligations to contribute to the public good.
I have also co-authored an article on an organization-centered approach to whistleblowing law. Most scholars study whistleblowing law from a legal perspective and how it applies to the organization. This article focuses on how organizations can engage in self-regulation in order to better manage whistleblowing risks. Whistleblowers may be perceived as just another cost of doing business, but whistleblowing laws can be a source of competitive advantage. Applying the five pathways of legal strategy researched earlier, this article shows how companies can leverage employees who are potential whistleblowers into valuable allies that create value for the organization.
Q: In addition to business law, you also have an interest in business ethics. What are the essential principles that companies must know in order to be ethical?
A: There are four principles of values-driven management that every organization should fully embrace. These four principles serve as four legs of a platform of responsible business practice. The first principle is business ethics, the internal values of the firm. Business ethics focuses on the individual decision-making in the organization that shapes how the organization functions on a day-to-day basis. Strong ethical principles can be the basis of a culture of integrity. By a culture of integrity, I mean ethical values that are so strong that employees comply with those values because they believe in them and not because they have to be asked to do so. The absence of ethical principles leaves companies morally adrift and prone to mistakes that can hurt the company’s reputation or trigger legal liability.
The second principle is corporate social responsibility, which focuses on a company’s obligation to its stakeholders. These include shareholders, employees, neighbors, community, society, regulators, suppliers, creditors, the environment, and others. The third principle is sustainability. Sustainability focuses on management of collective resources over time. What responsibility do organizations have not just today, but also next year, 20 years, and 50 years from now? How do we sustain an environment that will be preserved for our grandchildren and our great grandchildren?
The fourth principle is business and human rights. This focuses on inalienable rights that all persons have regardless of wealth or nationality. All people have a right to life, a right to education, a right to a fair wage, and a right to be able to raise a family in a safe environment, free from war and conflict. These rights are so strong they override the economic interests of corporations. Human rights are the vanguard of these values-driven principles.
Finally, my colleagues and I have developed a new program at UConn, a Master’s in Social Responsibility & Impact in Business. The program trains students not only in business principles, but also in how companies can be a source of good for society. They can also be agents for cultural change, promoting sustainability and human rights, and advancing goals of business ethics. We’re training both change makers and change accelerators in organizations. We can show them not only that acting responsibly is good for society, but also that it’s good for business in the long term. An ethical company is a profitable company. A sustainable company is a profitable company. That’s something that we are showing our students now.
Q: How do you think SSRN fits into the broader research and scholarship landscape?
A: I joined SSRN over 20 years ago, and it has been my go-to mechanism to distribute scholarship to the wider academic community. Virtually every manuscript that I’ve drafted goes on SSRN before it gets submitted to publication. I find it to be a key vector for disseminating my research before it eventually gets published. SSRN is a living embodiment of tomorrow’s research today. Instead of waiting potentially years to be formally published, through SSRN my working paper is shared with a wide audience in a short time.
I’m just a few quick clicks away from sharing my work with interested colleagues who will be able to easily find it. I don’t have to wait until publication. When you’re on SSRN, you’re in an ecosystem where people are looking for current knowledge, and if they find your work, they’re going to cite it before it gets to publication.
SSRN also brings research to me. The eJournals are one of the primary ways that I learn about research that’s not within my immediate network. SSRN is also excellent for accessing international scholarship. There are scholars in other countries that I may never hear about except for on SSRN. SSRN is a gateway to world scholarship.
You can see more work by Robert Bird on his SSRN Author page here
#meet #author #robert #bird
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