Professor Kish Parella has been invited to participate in the 18th session of the Stanford/ Yale/Harvard Junior Faculty Forum, which will be held at Stanford Law School on June 6-7, 2017. Professor Parella will present her paper, “Reputational Regulation,” 67 Duke L. J. (forthcoming 2018) (SSRN).
The 18th Annual Stanford/ Harvard/Yale Junior Faculty Forum:
The Forum’s objective is to encourage the work of scholars recently appointed to a tenure-track position by providing experience in the pursuit of scholarship and the nature of the scholarly exchange. Meetings are held each spring, rotating at Yale, Stanford, and Harvard. Twelve to twenty scholars (with one to seven years in teaching) will be chosen on a blind basis from among those submitting papers to present. One or more senior scholars, not necessarily from Yale, Stanford, or Harvard, will comment on each paper. The audience will include the participating junior faculty, faculty from the host institutions, and invited guests. The goal is discourse both on the merits of particular papers and on appropriate methodologies for doing work in that genre.
Abstract of Reputational Regulation (SSRN):
“Universities cover up sexual assault. Energy companies pollute rivers. Hospitals commit fraud. All these examples illustrate how the actions of organizations harm society. When these organizations act in ways that offend the public interest, parties seeking to change that behavior traditionally turned to litigation (civil and criminal) to force large organizations to reform, whether by command or consent. For example, following Brown v. Board of Education, “structural reform litigation” forced large-scale organizations, from school boards to prisons, to change their practices. Similarly, in the wake of recent financial scandals, federal prosecutors have relied on the threat of indictment to pressure large corporations to agree to significant structural reforms. The problem is that these avenues for organizational change are under threat due to concerns about expertise, supervision and enforcement, separation of powers, and procedural barriers.
“This Article addresses this problem by proposing an alternative strategy for organizational reform that relies on the indirect reputational effects of litigation. Under this approach, organizational change does not result from court order or parties’ settlement but from the information effects of litigation. Litigation disseminates information about an organization into the public space. This information has reputational consequences for the affected organizations. Voluntary organizational change is a response to that reputational shaming. Critically, these reputational sanctions can accompany all types of litigation and not just those specifically seeking “structural reform” remedies; as a result, “reputational regulation” of organizations can thrive even if structural reform litigation does not.
“This Article identifies and explains the operation of four reputational sanctions: financial, policy, regulatory spill-over, and barriers to entry. We are most familiar with the financial sanction where consumers adopt “naming and shaming” boycotts to punish corporations for their behavior, thereby encouraging the latter to change their practices. But reputational sanctions also take the other three forms and can also encourage large organizations to change their practices even when financial sanctions are weak or inoperative. Collectively, these reputational sanctions – operating outside the boundaries of traditional legal and regulatory processes – are employed by both public and private actors and play an increasing role in the decisions that organizations make.”