The LL.M. Subject Forum is an event held at the beginning of each academic year to help current LL.M. students decide which courses to take. Course convenors for each course discuss for approximately 10 minutes the goals and objectives of their course. Potential applicants to the LL.M. viewing this video must bear in mind the students who were in the audience were intended as the target audience. Most of the courses offered each year will run in subsequent years, but not necessarily all of them. Please see The LL.M. Curriculum for more information.

Transcript

I’m Eilis Ferran, and I teach the Corporate Finance course. I just want to start by giving you a quick overview of some of the issues that we look at in corporate finance and then some of the practicalities of how we go about teaching the course here.

So, by number, the majority of businesses in the UK and, indeed, around the world, are very small sole traders or incorporated associations, but once you start measuring things by size and scale, then you rapidly see that the corporate form is the vehicle of choice for significant businesses. The reasons why businesses choose to incorporate and to conduct their operations that way are many and various, but key reasons include aspects of finance, the corporate form as a way of managing financial risks and also the corporate form as a facilitator of financing arrangements of a wide variety from intermediated sources; so from banks and also from the capital markets. So, in looking at the law relating to corporate finance, we’re looking at some fundamental aspects of the way that business of any significant economic size is conducted.

Some of the questions that we will be looking at include the following. We’re looking at lots of aspects of company law and the corporate structure. Well, one fundamental question of capital law you might like to think about is should it regulate the amount of capital that businesses need to have in order to conduct their operations? Dr Kirshner referred to the financial crisis – we’re not doing a financial regulation course in corporate finance – but we can see, from our knowledge of the newspapers that one of the findings from the financial crisis was that banks, at least, need to hold capital, and the law, the regulatory system, needs to take a strong interest in that. Well, maybe banks are a special case, but the general question as to whether it is something that regulations should concern itself with in terms of ensuring that ordinary commercial companies hold a certain amount of capital, is one that is an important place to start. We do that.

We look at the relationship between companies and their providers of finance. So we look at creditors – key question there being the extent to which the law should intervene. Should we just leave it to creditors to look after themselves, using the tools of contract law and property law, or is there a role for company law to regulate that relationship as well?

We look at equity financing and so from a company law perspective one of the key questions to ask is: the internal governments of those financing decisions, to what extent should shareholders have a say in the choices that companies make about the balance between their equity and their debt, and so forth?

So, those are some of the company law questions that we’ll be looking at. A major source of finance for businesses, certainly in the UK, is for capital markets, so we will be looking at capital markets law, looking at disclosure as a regulatory tool, asking how that operates, whether it’s an adequate protection for investors and the like, looking at the mechanisms of enforcement in capital markets, so looking at private mechanisms enforcement, shareholder litigation, investor litigation and contrasting that with public enforcement through supervisory institutions. An overarching question which we will come to at various different points in the year is about who makes the rules in this area and the inter-relationship between national laws and international markets, so the balance between national, regional (in the EU) and international law and standard setting in this field. So, we’ll be looking at some of the key issues in there.

So, that is a very, very quick overview of some of the questions we’ll be looking at to get a better feel for the syllabus and the outline we approach. Have a look at the website. The order of lectures for the year is posted there and you will also see the first two handouts, which will take us through to at least halfway into this term. So, you can get a good feel for what the subject is going to be like. It is a subject which, in terms of the practicalities of teaching it, it will be a lecture-based course and there will be opportunities for discussion within the lectures – depends how many are taking the course how that will work, but that is where discussions will take place as well, and we’ll pause from time to time to look at problem questions and to discuss some of the policy issues. I will be inviting members of the class to do presentations as part of that. There will be the opportunity to submit written work, one or two pieces per term, so up to four or five over the course of the year. The examination will be a closed book exam at the end of the year, the standard three-hour exam. There is the possibility of writing a thesis on an aspect of corporate finance law, and if you’re interested in that possibility, it would be a good idea to email me over the course of the next few days, outlining what you think you might want to work on, and then we can have a chat about that next week when we start.

There is a, sort of, core text book, there’s my text book in corporate finance law, which is what we will use as a starting point, but there will be lots of material for you to read, given to you over the course of the year. You will see that, from looking at the lecture handouts, you can get a feel for that. There is quite a lot of technical law in the subject on aspects of property law, on equity and the like, that some of you may not be familiar with given your variety of backgrounds. My experience suggests that although at the beginning some things can seem a little bit unfamiliar if you haven’t done company law, if you haven’t done equity or trusts, there is no insurmountable hurdle for you to get over. So, as long as you’re prepared to do a bit of extra reading around the subject to begin with, and I’m very happy to give you guidance on books to look at, if you really want to do the subject, the fact that you don’t come already with a very extensive knowledge of company law or aspects of commercial and property law, isn’t an impossibility for you, it just means you have to put a bit more in at the beginning.

So, that’s what the course involves and the way which it’ll be taught. Does anyone have any questions?

Okay, good. So, I will stop there, but if you have any questions that you want to ask you’re welcome to email me, particularly on your thesis, and more generally come along to the press lectures and see how you think about it. I’ll look forward to seeing some of you next week.

Added on 05/10/2011.

Last modified on 11/10/2011

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