Join us for this lecture in honour of Sir Oliver Hart which will be delivered by Luigi Zingales.
In the last 150 years, economic activity in capitalist countries has been increasingly organized in the corporate form, with some of these corporations becoming very large. As a result, a few large corporations have a disproportionate say in the safety of the air we breathe, the food we eat, and the way we travel. They also have a disproportionate say in our technological and political choices, sometimes with very adverse consequences.
After presenting some leading examples of this impact, Professor Zingales will discuss how to mitigate the distortions this influence has without compromising the undoubted benefits large corporations provide to society. He will consider four remedies. The first is a change in the nature of fiduciary duty, both at the corporate level and at the institutional investor level, to allow societal values to be considered. The second is an empowerment of shareholders in decision-making whenever there is a trade-off between profit motives and social benefits. The third is a system of internal control that assigns clear responsibility in decisions with a significant social impact. The last is a mandate for corporations to conduct and make public a cost-benefit analysis on every decision with a large social impact.
Meet our speaker and chair
Luigi Zingales is Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago’s Booth School. His research interests span from corporate governance to financial development, from political economy to the economic effects of culture. He co-developed the Financial Trust Index, which is designed to monitor the level of trust that Americans have toward their financial system. In addition to holding his position at Chicago Booth, Zingales is currently a faculty research fellow for the National Bureau of Economic Research, a research fellow for the Center for Economic Policy Research, and a fellow of the European Governance Institute. In 2014 he was the President of the American Finance Association. He is the co-host of the podcast Capitalisn't.
Dimitri Vayanos is Professor of Finance at the London School of Economics, where he also directs the Paul Woolley Centre for the Study of Capital Market Dysfunctionality. He is a Fellow of the British Academy, a Fellow of the Finance Theory Group, a Research Fellow at CEPR and a former Director of its Financial Economics program, a Research Associate at NBER, a former Director and Managing Editor of the Review of Economic Studies, and a former Director of the American Finance Association. His research, published in leading economics and finance journals, such as Econometrica, the Journal of Finance, the Journal of Financial Economics, the Journal of Political Economy, the Quarterly Journal of Economics, the Review of Economic Studies, and the Review of Financial Studies, focuses on what drives financial market liquidity, why asset prices can deviate from assets’ fundamental values, and what the implications of imperfect financial markets are for asset management, financial regulation, monetary policy and the macroeconomy.
More about this event
This event will be available to watch on LSE Live. LSE Live is the new home for our live streams, allowing you to tune in and join the global debate at LSE, wherever you are in the world. If you can't attend live, a video will be made available shortly afterwards on FMG's YouTube channel.
The Financial Markets Group Research Centre (@FMG_LSE) was established in 1987 at LSE. The FMG is a leading centre in Europe for policy research into financial markets. It is the focal point of LSE's research communication with the business, policy making and international finance communities. The FMG works alongside the Department of Finance to understand problems in financial markets and in the decision-making processes of corporations, banks and regulators.
Event hashtag: #LSEHartLecture