Artificial Intelligence, Blockchain and the Platforms of the Future

March 2018 – Working Paper

Artificial intelligence (AI) and Blockchain are infrastructure technologies historically analogous to desktop operating systems and internet communications. 

Public controversy surrounding both AI and Blockchain echo back in time to widespread media dialogue in the 1980's and 90's on the potentially deleterious effects of computing power on the autonomy and security of the individual. 

AI is the operating system of the future in its capacity to augment human productivity and enhance complex decision-making. Operating systems, such as Microsoft Windows and Mac OS, facilitated user-friendly information processing, specifically access to information and specialized software in data and word processing. As AI research advances and moves to commercialization, tools will become available to better aggregate, process and decipher complex and disparate information. As a result, AI holds the promise of enhancing human cognitive function, and offsetting asymmetries in intellectual and knowledge-based decision-making. 

Blockchain will reduce the frictional costs of economic transactions in a manner reminiscent of the internet's power to facilitate the rapid frictionless transfer of information – the so-called information superhighway. Blockchain and its derivative cryptocurrency technology hold the promise of disrupting financial and economic transaction intermediaries in a manner reminiscent of the impact of the internet and email on the telecommunications industry. 

Dominant platforms to enable widespread consumer and enterprise adoption of AI and Blockchain have yet to emerge. However, user-friendly operating systems or software to enhance cognitive human capacity and facilitate economic transacting will usher in a new age of productivity and global growth – provided rising public and regulatory concerns regarding their adoption can be alleviated.

The Promise of Artificial Intelligence and Blockchain to Reduce Economic Inequality

November 2017 – Working Paper

Economic disparity, a significant underlying cause of human suffering and misery, is highly correlated with preventable disease, political unrest, and breakdown in basic social infrastructure.

Financial technology (FinTech) has the capacity to alter the status quo like never before in human history, specifically by leveraging – (1) artificial intelligence to reduce informational or knowledge-based asymmetries, (2) blockchain and cryptocurrency to protect micro-savings against local currency collapse, (3) accessible digital platforms to provide access to global capital markets for financing local projects, and (4) investment technologies to allow for modest savings to accrue in micro-temporal increments with minimal fees and in lock-step with the world's most sophisticated investors. 

Economic disparity is defined as having two core components: (1) income inequality from low wages, and (2) capital inequality from relatively scant opportunities to invest or protect savings, particularly in countries experiencing political turmoil and where the rate of return to global capital (r) is greater than the local economic growth rate (g). 

This work posits that artificial intelligence and blockchain have the capacity to reduce the capital inequality component of economic disparity.

Corporate Governance and the 21st Century Company: How is Value Created and For Whom?

Nov 2017 – Working Paper

This article, based on research shared during a speaking engagement in New York City, elaborates upon a new framework for understanding the corporate governance responsibilities of directors and managers in publicly-traded companies. 

The broad category of corporate governance is defined as having two components: (1) business governance, closely tied to the historical origins of corporate governance and a focus on aligning the interests of managers and shareholders, and (2) social governance, represented by the Environmental, Social and Governance (ESG) movement in recent decades. This innovative corporate governance framework provides added clarity on the duties of directors and managers in terms of business performance, as distinct from the responsibility of managers to be cognizant of – and to take action where appropriate – when corporate decisions have broader impacts on society and the public good. 

Corporate Governance and Shareholder Access: Dodd-Frank and The Future of Shareholder Engagement

November 2017  – The 21st Century Company

Panelist with Hank Boerner, Co-Chairman, Governance & Accountability Institute, Inc.;
Chris Pinney, President and CEO, The High Meadows Institute;
Josh Zinner, Chief Executive Officer, Interfaith Center On Corporate Responsibility, Inc.

Rise of Canadian Fintech (Financial Technology and Digital Banking)

September 2017 – World Angel Investment Summit 2017

Canada has been recognized as one of the best markets to build and test innovative FinTech solutions and has among the highest concentrations of technology firms outside Silicon Valley.

Presented research on founder centrism, and the impact of ownership structure and governance on economic efficiency in financial technology companies. Introduced hypothesis of Founder Centric Platforms – an emerging bank ownership structure with re-aggregated customer centric verticals under a single value enhancing platform. 

Panelist with Paul Desmarais III, Power Corporation of Canada;
Dan Robichaud, Diagram Ventures;
Brendan Holt Dunn, Holdun Investments

Long Termism: Has It Influenced Activist Engagement Objectives and Strategy?

September 2017 – Global Shareholder Engagement & Activism Summit

Panelist with David Conklin, Partner, Goodmans LLP;
Cambria Allen, Corporate Governance Director, UAW Retiree Medical Benefits Trust;
James Hamilton, Director, Investment Stewardship, BlackRock;
Douglas S. Smith, Managing Partner, Blackmoor Investment Partners Limited.

Interview with the European Corporate Governance (ECGI)

April 2017 – Founder Centrism in Technology Companies

Business Law at Oxford University

June 2017 – This research piece was written at the invitation of the Business Law group at the University of Oxford and is based on a forthcoming manuscript titled 'Eclipse of the Public Corporation Revisited: Concentrated Equity Ownership Theory'.

The era of the U.S. public corporation is in decline. Tectonic shifts in seemingly disparate regions of the corporate landscape are underway. Through the lens of a new theory of the firm, these phenomena are eerily consistent with Harvard Professor Michael Jensen's bold prediction in Eclipse of the Public Corporation (1989). Yet, much debate in securities law and corporate governance continues to be premised upon the 1932 Berle-Means corporation, marked by a separation between share ownership and managerial control. Eighty-five years later, that ownership structure is being displaced by a more robust organizational form that is particularly suitable to exponential innovation and growth in highly competitive markets – conceptualized as the founder centric firm... [read more]

Eclipse of the Public Corporation Revisited: Concentrated Equity Ownership Theory

May 2017 – Working Paper (Forthcoming)

For almost a decade, the author has outperformed many of the world's greatest investors. This working paper reveals the economic basis for this outperformance, which extends beyond idiosyncratic stock selection abilities. 

Concentrated equity ownership theory, an economic discovery made in 2007, explains the rise of founder centric firms over the subsequent decade. This paper introduces a dynamic unifying governance model, while uncovering theoretical links between otherwise disconnected economic phenomena. 

In illustrating theoretical continuity in the seemingly disparate investment styles of Jorge Paulo Lemann with 3G Capital, William A. Ackman with Pershing Square Capital Management, and Warren Buffett with Berkshire Hathaway, the author identifies hidden economic efficiencies powering the world's largest companies from Apple to Facebook, Google and Amazon.

The novel economic theory presented in this paper also outlines legal and extra-legal mechanisms driving macroeconomic phenomena, specifically those at play in Canada and Silicon Valley - distinct geographic regions uniquely situated for robust economic performance over the next century.

This working paper is forthcoming and builds upon the theoretical foundations established in "An Indeterminate Theory of Canadian Corporate Law" (peer-reviewed manuscript, published in the University of British Columbia Law Review, 2014)

Redefining the Business and Social Dimensions of Good Corporate Governance

August 2017 – Working Paper

This paper explores the origins of corporate governance, rooted in mitigating agency costs flowing from the separation of share ownership and managerial control identified by Berle and Means in their 1932 seminal work 'The Modern Corporation and Private Property'. In analyzing the conflicts and responsibilities of companies in both public and private markets, a new governance framework is introduced to address the rise of control structures in public markets and advent of large venture-backed private corporations. The terms 'business governance' and 'social governance' are defined as components within the broader concept of 'corporate governance'. 

In examining the role of securities regulators in enforcing social governance under "comply or explain" frameworks, the corporate law regime is presented as an optimal mechanism for extending social responsibility to all large corporations, while reducing regulatory burden and levelling the playing field for publicly-traded companies to better compete with privately-held counterparts.

Collaborative Activism: Shareholder Engagement for the Long Term

July 2017 – Working Paper

This work examines the trajectory of shareholder activism from shorter term financial engineering – which reached an apex in the 1980s – to newly emerging forms of operational activism focused on longer term business fundamentals. The current paradigm is defined by antagonistic activism, which distracts management and places corporations in suboptimal competitive positions during activist campaigns. In contrast, collaborative activism is presented as a more suitable form of value enhancement. Collaborative engagements focused on contributing operational acumen, particularly in the absence of an ethical dominant shareholder or stewardship-oriented CEO, result in greater levels of economic efficiency as compared to traditional forms and modes of activism. A paradigm shift from 'antagonistic/financial' activism to 'collaborative/operational' engagement is predicted.

Rewarding Legacy: Breaking the Short Term Barriers of Equity Compensation

June 2017 – Working Paper

The limits of equity compensation and performance pay are explored through the lens of concentrated equity ownership (CEO) theory. In corporations with concentrated ownership structures, equity compensation falls short in incentivizing longer-term decision making. Incorporating concepts imported from behavioural economics, the construct 'legacy compensation' is introduced as a non-monetary interest alignment tool in concentrated ownership structures.

The Way Forward: Powering Canada's Rise in the Innovation Economy

April 2017 – Working Paper

Over the next two decades, with bold leadership from all levels of government and the private sector, the Canadian Innovation Triangle – marked by Montréal, the Toronto-Waterloo Corridor, and Vancouver – has the potential to become the nexus of a value creation engine that rivals the economic output of ‘Silicon Valley’. This work posits that fostering growth in founder centric technology companies – from early stages to well-beyond IPO – is a crucial step in Canada’s economic transformation.

Business Law Advisory Council Report to Minister of Government and Consumer Services for reform of Ontario’s corporate and commercial legislation

December 2016 – Business Law Advisory Council, Ministry of Government and Consumer Services

Contributed research to the Ministry of Government and Consumer Services on the economic efficiencies within certain founder centric ownership structures – with a view to advancing Canada’s economic prosperity and competitiveness as a jurisdiction of choice for entrepreneurial activity, investor engagement, and business expansion.

The Business Law Advisory Council is tasked with making recommendations to reform laws that are responsive to changing business priorities and supportive of a prosperous economy. Modernizing business laws is part of the government's economic plan to build Ontario up and deliver on its priority of growing the economy.

Business Law Policy Consultation: Priority Findings and Recommendations Report for reform of Ontario’s corporate and commercial legislation

October 2015 – Ministry of Government and Consumer Services

Submission regarding the province of Ontario's Business Law Agenda: Priority Findings and Recommendations Report for reform of Ontario’s corporate and commercial legislation. Contributed research on the unique characteristics of Ontario’s capital markets with regard to concentrated share ownership patterns and the inherent efficiencies of founder centric ownership and voting structures. 

The Ministry of Government and Consumer Services is responsible for the legislative framework governing businesses registered in Ontario. The Business Law Policy Consultation is part of a governmental commitment to advance legal frameworks that are responsive, flexible and adaptable to the needs of technology companies. These legislative reforms are part of a broader commitment to ensuring that Ontario’s legislative structure facilitates an efficient market and prosperous economic climate.

Proposed Amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids, and changes to National Policy 62-203 Take-Over Bids and Issuer Bids

June 2015 – Canadian Securities Administrators (CSA)

Submission to the Canadian Securities Administrators (CSA) with comments regarding proposed amendments to Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and changes to National Policy 62-203 Take-Over Bids and Issuer Bids. Contributed research on concentrated share ownership patterns, economic efficiency and corporate governance – in connection with the regulation of hostile take-over bids in Canada.  

The CSA, comprised of securities regulators in 10 provinces and 3 territories, is responsible for developing a harmonized approach to securities regulation across Canada. By collaborating on rules, regulations and other programs, the CSA streamlines the regulatory process for companies seeking to raise investment capital and others working in the investment industry.

An Indeterminate Theory of Canadian Corporate Law

January 2014 – University of British Columbia Law Review (peer-reviewed)

This publication, in a highly ranked peer-reviewed law journal, establishes the foundation of a distinct economic theory for the enhanced efficiency of business corporations. This research challenges the dominant paradigms of shareholder primacy and stakeholder theory, while positing that inherent efficiencies exist within certain concentrated ownership structures. 

This manuscript has powered a highly scalable ten-year track record in the capital markets that rivals those of the world’s greatest investors. In expanding this theory’s real-world applications to technology companies and other innovative businesses, the author actively engages with founder centric ownership structures.

The Activist Shareholder Model and Good Corporate Citizen Theory

April 2009 – Faculty of Law, University of Western Ontario (Canada)

Proposed a novel theoretical framework, employing concepts at the intersection of law and economics, for the analysis of significant developments in Canadian corporate law. Engaged in extensive research on issues pertaining to concentrated ownership structures, shareholder remedies, and corporate governance.