Appraisal rights; kinds of activists

Hey Matt. Ann and I are here. That's Matt, the producer, Stavros. hey Matt, we're here with Stavros. Stavros Gadinis, correct? and we're about to record a podcast for you, so I hope you like it. three, two, one. Welcome to Shareholder Primacy from Free Float Media, a podcast about activist investing, securities law, and all the ways the financial and legal worlds intersect and collide in real life. We are back. Ann Lipton is a law professor at the University of Colorado, who teaches and researches securities and business law. She holds up the legal end of the podcast. And that's Mike Levin, an activist investor who lives and works in Chicago. He covers the financial side of our podcast. We do have a guest. Hey and today we have a guest. Yes, we do, and we're excited to talk to him. Stavros Gadinis is the George R. Johnson Professor of Law at Berkeley in California, of course. And he is the faculty co director of the Berkeley Center for Law and Business. Stavros teaches and researches about corporate law and financial regulation. So hello. Hey Stavros. Hello, Stavros. Say hi. Hi Ann. Hi Mark. very nice to be here. Thank you very much for having me. You're quite welcome. talking to us from his office in Berkeley. in addition to talking about some current issues and some himself and so forth, Stavros has a new book entitled Corporate Ordering. And it's about how corporations organize themselves and their corporate governance around controversies, like, you know, ESG stuff. So we're gonna talk to him about the arguments in the book, and we'll certainly get to some other current, you know, corpgov and activist. stuff as well. So all right. Before we get started, just the usual reminder that if you want to email me and Mike, you can send us questions, requests, whatever at shareholderprimacy at freefloat.lc. Stavros, feel free to do that if you if you don't like what you hear when you when we record this. Ha ha ha. Email on all the time. Okay. All right. So why don't we start talking about your book? what so th which is coming out, I guess, next month or early next month? Or or yes? Thank you. Thank you very much. All right. Let's let's dig into this, Ann. Yes. it's coming out next month. You'll be pleased to hear that Cambridge University Press has had a cyber security hack. So so I'm I'm waiting to get the books in my hands and it's not clear when, but I think it's a f it's a fun thing to talk about, given what what else is happening in the world. What? no. no. no. Yeah. Well, okay. So someday this book will be in your hands. and why don't you tell us like what's the main theme? What's your thesis in this? All right. Uh-huh. So you know every company has to make decisions about questions or issues the law has not really answered yet. What happens when its AI you know escapes its sandbox, for example, random example? What counts as emissions? What happens when a passenger reports an assault? What happens when there is offensive speech on a social media platform? Now, all these are questions that are very important for the company. Nobody elected the company to decide on these questions. We all understand that these are very important for our society. But at the same time, no one can stop the company from deciding because even doing nothing about it is also a stance. So the book is about what the best companies do to handle this scenario. These kind of controversies that we hear tons about all every like every day. Yeah. Yeah. Every day. And they're very central to the company's business model as well. It's not just this little thing that I have to do on the side to help society, but it's it's very central to the business model and that is I think what fascinates. Okay, so yeah, so you're So it's g like kinda like e example would be like t what what kind of goods target stocks ru that are related to the L BGTQ community or something like that. Another example. Okay, got it. Exactly. So, yeah, it's like, yeah. So, what you're saying, I I'm just repeating what you said. So, like, you if I'm a big social media company, I am necessarily affecting society that is inescapable. I have to make choices about how to run the company, and any choice I make is gonna have societal implications, even though I have not, you know, the managers of that company have not been elected by anyone, but nonetheless I am functionally making public policy. Yes. public policy on speech, public policy. We saw the United Healthcare you know situation, public policy on on healthcare, public policy on AI. There's the companies are making so much public policy. Okay. And so what are so what is so you're s so the companies they have to make public policy essentially inescapable because they're big and that's what their business does. And so what are you seeing or arguing for in terms of how they go about this? So what I see is that those that are very conscious of those phenomena are actually building a small government internally in order to decide how to make this choice. They start with trying to figure out, okay, where am I going with this? What are the things that I need to keep in mind? What are the considerations? What are the people impacted? And they try to talk to them, they try to figure out what they think. It's not that they're gonna follow what they think, but it's good to know. interesting. Mm-hmm. The implications are going to be. So that's how they start. Then once they have the principles in place, and I can talk to you about like how they they form bodies, they form groups of experts in order to consult with you know with important stakeholders, and then they have to think about implementation. You know, at some point, yes, they've collected the information, but then they have to decide what they do. Mm. And usually they provide transparency about their motivation and their reasoning. And they say, well, you know, we have these harms, we have these benefits, how do we weigh them? Where do we come out? and they have some sort of public discussion about their ultimate choice. And then finally, they also set up some sort of a monitoring system, creating this feedback. Okay, so It's this sounds a little more systematic than what like a government agency would be doing. But there's some there's some parallel it sounds like there's some real parallels. There it sounds like there's some per there's some very interesting parallels between how I I I use a metaphor of a government agency, but they're they're they're sort of in some ways a sort of acting like. Thank you, thank you, I You know, on the one hand, yes, and I I but I have two remarks on that. First, there's no government agency that has the resources that these corporations have in order to deal with these questions. So ultimately, what they do just in terms of resources is very, very valuable because we cannot recreate it and government cannot really recreate it. And so that's one. But two. Right. Obviously, yes, you know, the the functions that I've described, every I I was about to say every good law professor, but let's say every bad law professor would recognize the distinction between legislative, executive, and judiciary that's well established from the constitution, from you know Aristotle. Like it goes back w it goes way back. So I think that this is a feature of Yeah. Ha ha. Every hierarchy, every organization, it's just principles of good decision making. It's not just about government. Like with every decision you take, you have to think, okay, what are my values? What are my principles? Where are my goals? Where am I going with this? and ultimately you have to think, okay, yeah, I made this choice. How is this working out? Is it getting me where I want to go? So what you you do a couple of different examples in your book. Why don't you like pick one and talk us through what you what your case study is. Keep going in. Well, I'll pick AI obviously because I think that's what everybody wants to do. Let me just say that I think the timing for this book is impeccable because the book is about I mean, I decided to write a book about whether companies can govern themselves and now everybody's asking, can companies govern themselves? So I think it's a I I think it's a really good timing. But I'll pick AI because obviously Of course you do. Sorry. It's the extreme case. The stakes couldn't be higher. I had a journalist asking me, so last week, you know, there was these these statements that said, we're all gonna be dead in in 10 years. And he asked me, Does your book mean that we won't be dead in 10 years? And I'm like, Well, I don't know if I would go that far. But it is a really extreme case because it is Okay. The stakes are very high, and companies are really realizing that the stakes are very high, and we see that around. But let me give you some examples from the book. Now, one example is Alpha Fold. This is an AI that does protein mapping. It was released by Google in 2024, and they they were determining the way they had to decide how whether to release it. Now, it has the advantage of doing in Is it wholly owned by Google? Okay. Okay. Ourselves. Deep Mind, yes, is a wholly owned subsidiary of Google of Google. Got it. Right. So it's it's a it's a deep mind project to map proteins. Which is which is one of the in my experience, which is not one of the most interesting and promising uses of this kind of I mean, proteins are some of the most complicated stuff in biology. So this is this is this is really interesting to the researchers, but there's other implications, right? Go ahead. Okay, okay. Yes. Yeah. And let let's just also say, for those that are not so steeped into biology as mine, that it also won the Nobel Prize for Chemistry after its release. So it is kind of a decision of huge scientific value. And the reason it did, because on the one hand, it can, you know, be important for curing Alzheimer's and other diseases like that. On the other hand, it can create bioweapons. Great. Yeah. All right. So if you're really wondering, are we all going to be dead in ten years? This is how we're gonna die. So yeah, exactly. So DeepMind was standing with this huge scientific development on their hands, and we're wondering, do we give it to researchers or not? okay. This is it. Okay, we've this is this is one of the prime suspects. So how how how do they take this decision? So they said, well, we can't take this decision by ourselves. Let's just hear what people think. And they got together a group of about 30 other experts, philosophy, philosophers, chemistry professors, ethicists, industry representatives, people that had to decide the operationalization of it. and they decided, you know. It's not a black or white. We have to have some guardrails in place and we'll design a system that works and doesn't deprive humanity from the benefits while it tries to deal with the costs. What what kind of costs are we talking about specifically for this? So for them at the time the decision was do we release it or not? And do we actually get how do we get the scientific community to trust them? But the costs were that once it's released, you don't really know what people are going to use it for. So it might be used misused in some way by people who had access. So that was what they were trying to do. It might be misused. Yeah. So that's the question, and how do we monitor that? And they and people came up with ideas for monitoring it, but ultimately they took the decision to release it. Okay. Wow. All right, keep going, Ann, sorry. Okay. No, I was just so I mean, when you're you you talk about these, you know, these different organizational structures that the companies have set up. But I guess, I mean, my big question is that like ultimately, I mean, maybe it's different for anthropic and open AI because they are technically not normal corporations, but like your Ubers and and some of the others, I mean, isn't ultimately I mean The goal they may be wanting societal buy-in for various purposes, but isn't ultimately they required to choose the path that is going to make them the most money. And that may involve finding out what stakeholders think to the extent they're reputational costs or whatever, but at the end of the day, it's still about making the most money. So I think we would be amiss not to talk about shareholder primacy in the shareholder primacy podcast. So of course. Of course they're supposed to choose the thing that they believe is going to make them more money. But the question is, how do you get to that decision? How do you decide what's going to make you the most money? And do you have to think about risk or not as you're making this choice? It's very hard. Yeah. Yes. Yeah, right, thank you. To figure out, for example, if you're Facebook, am I better off moderating the platform or not moderating the platform? Do I shut down I don't know, let's say anti-Semitic comments, for example, or not? You could think argument you could think of arguments both ways. so it even though I I would have preferred it to be one way, but Yeah. You could think of arguments one way, both ways. So that's the challenge. I think that saying we need to make you know the most the decision that brings us the most profit doesn't actually tell you what the decision is going to be. And if you go through that process, you're much better positioned to decide what is going to make you the most profit, or at least. No. you're much better positioned to have a vision and support that vision. I took that decision because I believed it would make me the most profit because this was my strategy. It could be the wrong strategy in the end. Yeah, I mean yeah, 'cause I mean one of the things I know that you have a chapter and you talk about how Uber's internal process about how to deal with things like sexual assault. And obviously and you could talk like they do a lot of disclosure and things that we would consider to be very valuable, but that they also amended their rideshare agreement that nobody reads to make sure that nobody can bring MDLs like the one is currently pending. And that feels like a very ruthless decision. Mm-hmm. Ha ha ha. Yeah. So I'm not saying that the decisions that are going to come out of this process are always going to be you know pro-victim. In fact, I actually expect the opposite. That the decisions they are going to make sometimes are going to be exclusively or pro-company or pro-shareholder, if you wanna, or pro-profit, however you want to frame it. But I do think that even in those cases, what this decision making process allows. Yeah. Is a very clear recording of the considerations. And once this comes out, then at some point there's going to be failures. At some point, some jury is going to have to decide one way or another. And this record is going to be helpful even in that even in that respect. Okay. So so right, so like towards the end of your book after describing things, you talk about sort of a new conception of fiduciary obligation and what fiduciary obligation requires. Tell us a little bit about that. Right. go ahead. Yeah, so I think you and I are going to like that. Imagine like we're in the nineteen eighties before Smith and Van Gorkham, everybody thought that a company's board can get together and decide to sell a company in an hour and a half if the price is good enough. Right? That was the everybody's expectation, before that bullying. Now we don't behave like that. We have we want boards who are considering And acquisition to get fairness opinions and to get investment bankers and to get legal advice and to canvas the market. And if there are conflicts of interest, yeah. And see, even I can't think of all the decision-making steps that need to take place before we get to signing your name on the line. But You do due diligence. Due diligence is what we call it. Yeah, right, yeah, right. Mm. Yeah. For the same decision, which is, you know, does Facebook have content moderation? Potentially the implications, social medical implications, financial implications, much bigger, we have no decision-making process. There's no set of steps that a board has to follow to make that choice. We say, well, a business judgment. So what I'm saying is, yes, of course, business judgment. But there are steps that boards can take that or w we can require them to take in order to be better informed and in order to show that they did consider what they were supposed to consider. And ultimately, just like in an acquisition, they can end up wherever they need to end up based on what the process showed. But the reason we have the all these procedural requirements for acquisitions is because they end up at better prices. or fairer prices for the shareholders. And I think that if we follow these steps, which is consultation, transparency, monitoring, we are going to end up with better impact so societally for shareholders and for everyone. So what you're then advocating for is a sort of more rigorously defined process for certain kinds of decisions rather than largely leaving it to companies to even decide their own process. It it's a little bit more rigor into what the process should look like for good decision making. Yes, somewhere in between. So we know that you have to consult. We're not going to tell you exactly how you're going to run your consultation and how you're going to run your committee or how you're going to run your transparency. But we need to make sure that, you know, certain key procedural safeguards are put in place so that you go through these steps and ultimately you end up with a better informed board in the end. And do would you call this like a care obligation or a loyalty obligation, or is it both depending on I like how would you slot this in our understanding and and and relatedly, 'cause as long as one two P seven's in place, if it's a care violation, it's gonna be unenforceable in any real legal sense. Yeah, so I mean to start with, I don't think that this is going to be to end in damages. So I don't think 102b seven is really important because this is more of an equitable remedy. It's about the steps rather than so I would say I would place it under care because to me it sounds more similar to the all these decision making techniques that corporate law has developed. over time rather than kind of a pure compliance framework where you're violating a law. I don't think there is a law that's been violated. Mm-hmm. Mm. Yeah, sorry we're pausing because my cat has made an appearance. Right. So I I I yeah, I so I I did have one one quick question about how the process 'cause, you know, as you started saying, this is shareholder primacy and we talk about shareholder interests and so forth. you know, presumably you've thought, at least in some of the theory or some of the case studies, where shareholders, particularly I'm thinking these days of some of the ESG community that's interested in Yeah. a lot how companies are dealing with these issues. They they actually want them to deal with them in a certain way. where do where do they kind of enter into this? Is there is there a a clear place for for that or is this is this or are are they more incidental to the to the whole thinking? You know, it's not it's not that anybody can actually generate empathy for CEOs. I think that's very hard. But I have to say that you know, companies these days don't know who to keep happy first and how to keep everyone happy. That's kind of impossible because we're so divided. Some shareholders want one thing. I don't know. I think the like one example that I have in the book is like the Norwegian sovereign fund, which on the one hand is kind of very Right. Right. Hmm. Obviously its wealth comes from fossil fuels, but its policies are very kind of pro-climate, let's say, or pro-sustainability. and other shareholders have the exact opposite perspective. So the question is, okay, how do you keep everyone happy? And the answer is you can't. but the the idea is that By explaining to people why you made the choice that you made, they can accept the choice even if not if it's not what they really want. I I can I can think that way for you. I know some of the folks that I'm familiar with in the ESG community may may not accept that. But I mean and then and I also I mean it's worth saying I and we I mean we're here more to hear about your argument rather than debate you on this. Because I don't I th I largely agree. the only thing I'd offer is, you know, I as you know, I bring the perspective of a somewhat as Anne has learned, free market economist Yeah. with a graduate degree from the University of Chicago. So and and and you know, there's all of Milton Friedman, you know, the a mission of the the the goal of company is to make money, the cor corporate purpose is to make money. I mean all that kind of stuff. We can put that aside right now. but there's you know th there's one scholar, Michael Jensen who I always followed who who actually said b basically put Yes. It's yeah. Formally in a model, what you said earlier, it's impossible to please everybody. And so his his view was that then you a a profit function, as profit as as the goal of the objective function is is the right way to to to to structure this. And again, again we can debate it and so forth. but it's interesting to hear how the shareholders, at least some of those other constituents there is a little more incidental to this and it's that's it's a really interesting perspective. You know, it's what I'm struggling with is that everybody starts with their ideal world. In my ideal world, we would solve the climate problem immediately this way. In my ideal world we would solve this kind of issue right away. In my ideal world Trump says, I'm the only one that needs regulated AI, we don't need anything else. So everybody starts with our ideal world, but that ideal world is not really the world we live in. huh. Ha ha ha. In the world we live in, it's some company that makes the decision in real time. And that's that kind of real world context is where I want to focus and where I'm hoping that my argument will make a difference. No. Interesting. All right, cool. And I I one I I have one more question on this, and then I would but so yeah, I have one but I have one more question about this because I want to talk a little bit more about the enforcement piece of this. So it's not a damages thing. And I guess I mean, do you imagine that like to like if a company fails to use what the appropriate process, I mean, there are sort of two Then we probably need to take a little break here. So give everyone okay. Yeah. Mm-hmm. paths and I'm not sure which one. Would you imagine this as anything that's enforced by shareholders in an equitable sense? Or would you imagine this as more like a this is best practices that I want boards to internalize and it's not really about litigation at all? First one. So I'm imagining that they go to court and they ask for a do-over and they say, look, this was the wrong choice, just go through the process again. and think about this, think about that, consider this, consider that, and come up with you know a reasoned explanation of your decision, your ultimate decision. It could be the same one, maybe if you were right from the beginning. Well, that's interesting. But we need all the considerations laid out in front of us. Huh. Interesting. All righty. go ahead. Reactions on, I'm all I mean I I I my my first reaction in question is really more like you know, capacity of courts to make to evaluate and then enforce an order of a do over. Mm. Well, I mean, for and A they do it all the time. so it's not you know absence of processes relatively easy to ascertain. so I'm hoping that one, it won't be so hard in the beginning and you know it's once it becomes clear that this is what the requirement is, then companies will be proactive about it. so I'm hoping. Ha ha okay. Alrighty. How about are we a good place for a break end, do you think? All right, good. Let's do that. We're gonna take a quick break now. Return shortly with Stavros Gadinis of the University of California Berkeley here at Shareholder Primacy. All right, so now you can take a little sip of something, Yeah, sounds good. Yes. Okay. That's great. she ran away, unfortunately. No, I'm right there with you. But she the thing was that she was like begging to be put in my lap, and she was in my lap for two seconds, and now she jumped out of my lap because that is what she does. And now she's I'm not even sure where she went. Apply some lip balm 'cause I need that. Can I see the cat? Is it is it still around? no. Yeah. That's that's what cats do. That's what cats do. Yeah, you don't have an office cat it appears, do you, Staff Ross? Mm. No, that's some of my colleagues have dogs and a lot of students now also have service dogs. So when I do a big corporations class with like, you know, eighty a hundred people, I usually have three, four dogs around. you're missing out. of course. that's great. I don't have any dogs in my class. really? I I don't I that's so funny because I Stavros, I don't know if you're familiar, I I co taught a shareholder activism seminar at the University Chicago Law School this past spring. Do you know Professor Adriana Robertson at the University Chicago? So she she was she invited me to to write a seminar with her on activist investing. We had a blast. And so I go to class, twenty twenty students in like a little lecture hall. Yes, of course. Yeah, yeah. Yeah. And there's like three or four kind of reserved seats. Like at the front. You know, I haven't been in a classroom in forty years. Okay. So I sa and the reserve seats were for, you know, c students who had needed accommodations. And I and and but none of them were dogs. They were just more seating or like I need to use my computer. It was really I I have such empathy now Ha ha ha ha. And and who comes in? Prefer wow. Yeah. for Anne of course, I've shared this with Anne and now she's sharing it with you, Estarros, for what what academics have to do to try to just, you know, get through a course. It's like it's in it's Happily, the accommodations are handled. It's amazing, isn't it? And you can trust you can trust Berkeley students to figure out every little accommodation later. It's it's now the game. yeah, right, right, right. There were there was some of that. ahead. Yeah. Well Yeah, it's not a game, but it's happily for me it's handled by our administrators. Like, so I get told this student needs an accommodation or whatever, and it's like, Okay, I am I'm out of it. It's not in any way. Right, yeah, no, and I got lists I got lists of accommodations that were it was really I mean, look, and I totally empathize. I mean it was like I just wow. I said there's this is a whole like I said, 'cause I hadn't I've never taught I mean this is the first time I've ever taught anything. And and I like I said, I hadn't been back really in a academ in a university classroom since nineteen eighty five. So anyway. All right, shall we shall we bring this back? All right. Yeah, so let's we're gonna bring it back. Welcome back to Shareholder Primacy. I'm Ann Lipton here with Mike Levin, and we're talking with Stavros Gadinis of the University at California at Berkeley. No. Let's do that. All right. So Ann's gonna Anne's gonna do the the intro to the second segment. So all right. So Stavros, we are curious this is this is why you've sp poured a lot of your heart and soul into the book. There must be other things that you do. and and well what else just curious, what do you teach at Berkeley? Ha ha ha. Mm. I teach business associations and securities regulations. Okay. So you have a the the regular law school law professor teaching load that you deal with a bunch of sec probably second and third year students that are so we actually allow OneElse to take business associations. So as a result our business associations has grown a lot. and now I teach one else. well. So s so so so these are b wow. wow. so what's your what's your other research like? What other what other things do you have you been kinda researching over at least more recently, I suppose. I've I have never taught one else. Not once. So you know, overall in my career I had two different lines of research and in one is was about international standards, how they spread, how they how people how countries decide whether to adopt them or not. And I had really focused on the work that private standard setters do and how these get propagated around the world. and then I was also interested in enforcement, compliance, regulatory independence, kind of these very different lines of research in business law, until I realized that what the company what companies do is actually very much very similar to what private standard setters do. And this is where the book comes in. but I haven't Interesting. stopped doing the earlier work. So I've been focusing for a while on the International Sustainability Standards Board, how it came about and how it spread. And this is a fascinating discussion, I think, because it is a private body. It was created out of market, you know, participants, there were no governments involved. and It has to try to get governments to adopt its standards at a moment where this is, you know, highly politicized. It's easy to have standards spread when you know we're in a hegemonic world like we were in the you know nineties, and the US said, I'm backing this set of standards, so every country had an incentive to adopt it to gain access to the biggest markets and so on and so forth. It's a totally different conversation to try to get this set of sustainability standards adopted by other countries. And it's fascinating what they do. They allow for flexibility. They have they ha they discuss with different types of authorities. And they're pretty successful. They have about thirty-seven countries adopting the standards. so it's it's going really well for them. And at a moment where the big kind of you know, the two big superpowers, kind of the EU and the US that have kind of views on that, are at a clash. Yeah. to say the least, yes right. To say the least. They have managed to provide like a third option, which is more of a baseline option. They have managed to get a lot of big capital markets to adopt them. Australia, China, Brazil, Canada. I don't I know we don't want to talk about Canada, but the UK, Switzerland. so Ha ha. So it is kind of it is going well for them and it's very exciting to see it. we've also they merged with the sustainability accounting standards board, which was how this started and it's a Bay Area initiative as well. So because of Berkeley I had the pri privilege of getting to know the people who actually started the this body. And it's it's so fascinating to see something, or to hear the stories of how something starts from like a little seed to become this global regime. which is yeah, yeah. Ha ha ha. Right. That's very cool. Wow. All right. So you also, in your other job, not as professor but as head of the the center, run run the Berkeley Law Corp Gov Forum, I think. So and that's that's coming up, right? So this is so t tell us what yes. And w and w and that's that's become a fairly prominent and big Yes, it's coming up in a few weeks. event among I think among scholars and also I mean there's a lot of practitioners that I think should come there, right? Yes. I had been there. really? Yeah, yeah, yeah. So so you've seen it live. It's I think it's the major corporate governance event on the West Coast. every year we get around four hundred, five hundred participants, something like that. and it's it's always a fascinating conversation. this year there's a second day about AI, which is of course what everyone in the in the Bay Area wants to Yeah. hear about. But we also have you know judges from Delaware coming in and talking to practitioners. and so it's a it's a great opportunity to under to hear what's happening. Wow. All right. Go ahead, Ann. So yeah, so let's talk about the AI. so you're you've got a new initiative where you're doing something with AI. What is that? So it's this one is we try to get together companies and investors from the AI ecosystem to figure out what each other is asking for in terms of governance. we have on the one hand companies that are trying to be responsible, and they are going to come and explain what they think is their approach to how to do AI responsibly. So we have John Palmer from Microsoft, Tom from Google DeepMind, Paul Goldman from Salesforce, and they're all going to come and explain what their companies do. And on the other hand, we have investors, advisors who are going to come and explain how they see these efforts and what they want companies. And you know, there's so many controversial issues around. AI these days. Data centers is turning out to be another hugely controversial issue. And we started this so we thought, you know, this merits its own forum because it has it's on everyone's mind and the topics are very big and it's moving so fast that you kind of you need to go and hear something and in five months Yeah. Right. You'll need to do it again because it will be an entirely new set of considerations. So that's a little bit of what So you mean like create some kind of ongoing conversation? Is that the plan? In So I think that's where it's ultimately going to end, to how it's going to develop. This year was our is our pilot effort. we decided to kind of try with whatever we could, and we have something like 250 registrants for and 120 seats. So so we'll see. wow. Okay, cool. All right, so that's It's it's risky to talk about AI in the Bay Area. Yeah. Right. Well especially talk about, you know, this isn't like this is so interesting. This isn't like legal, you know, what should what what government statute should look like around AA? This is more like how should the owners and developers and the labs kind of govern themselves. Because what government statute can tell us anything, like it's by the time it takes government to write a statute, it's already it's already passed. Right. Right, right. Right. And and and and the whole consensus building process that government presumably has to go through is just not suited to to trying to trying to put you know safeguards but still allow these labs to do you know, make some money, you know, benefit humanity, design proteins that are going to, you know, cure Alzheimer's and yeah. I I do I I don't think that governments can really play a very big role in designing the rules. So it's it's very hard to predict where the industry is going to go. The industry itself has trouble predicting where it's going to go. They are by necessity the first ones that hear about failures, the first ones that hear about incidents. So I don't think that government has a big role in that respect. I do think that government, there are some things that governments can do. And I in my view, these are all related to enforcement. So if we if we go back to kind of the framework for the book, you know, there was the designing the rules, not much government can do. Implementation, yes, maybe there's some transparency requirements that government Sure. Okay. A little more. Yeah. can impose, but that's about it. but on enforcement, outside verification, third party checks, these are areas where governments can really contribute because they do have the apparatus of the state that's helpful when someone is misbehaving. And I do think or at least also for causing, you know, there's for forcing compliance, right? For Proactively create incentives to comply. I don't know if Annie's skeptical or not. I mean, let's start with the basics, right? Like liability standards. So Right. Cool. So so how you've been at Berkeley for quite a while now or just a little bit of time or that's quite a while. Wow. All right. And I th I saw somebody that you started your legal career as in practice as a securities lawyer. Is that right? Since two thousand and ten. So what we're Yeah. It is absolutely right. I started at Northern Rose. it is a London firm. Obviously now it's a global one. But back when I joined us that's gives you a sense of how old I am. It's it was London firm that was just expanding. and I started doing kind of mostly mostly global IPOs. and that's how I learned securities law. cool. So so you and Anne kinda had vaguely similar paths. Anne was Anne pr you practiced for several years. Right, I understand. Wait a second You were you were you were doing different Right. Well, I was I was suing companies. Yes. I was the person who stepped in if they made a mistake. I still have nightmares. I still have nightmares about people like I no. Right. But but the the idea was is that you're right. But there th the idea that you were kind of you know, in in the actual, you know, practical applied end of this probably informs some of your teaching and scholarship and so forth. I mean, yeah, you probably weren't I d I'm guessing you weren't all a practicing lawyer for, you know, a very long time. Probably went back to Ha ha ha. You know. So Mike, you know, I never thought about that particular instance, but you're absolutely right, because in there was one particular company that with with which we worked on multiple rounds of financing. And, you know, after the third round, they were so used to us, and I have to say to me in particular, that they were calling me about random things. like whatever sometimes legal, but also not strictly legal. Yes. But things that you could expect a lawyer might have a sense of what the outcome, the correct outcome should be. And I think that this is a little bit of what drove me to the idea that it's not all about what the law in the books is, but it's also about how people think about the law. Interesting. wow. So, all right. So from there then you then you came into the ac into the academy and then went to I came into the academy. I was you know, I I I'm one of those people that actually like practice and I miss it. Yeah, okay. whoa. I'm ki yeah, I know. I'm kind of an adrenaline junkie, I think, so I miss that part of it. So that's why I like Podcast, so thank you very much for having me. But Yeah. you you're welcome. That's that's that's great. Well it's what a story. That's really kind of fun. So, all right, I think Ann, you got any more questions for Starverse or should we let him let him go let him go on to his to the rest of his day? All right. This is this has been great. So again, the book, we're here to talk about that for a minute, is corporate ordering out from Cambridge in sometime soon. We don't know exactly when. Sometime in the next couple of months. No, it sounds like a good place. Yeah. When they recover from their hack. Mm-hmm. and it should be should be a f you can pre-order it. I've already I saw galleys to prepare for this, so it's it's it's pretty fun. Pretty fun, pretty interesting. So so thanks Stavros for joining us. This is Shareholder Primacy, hosted by Ann Lipton and me, Mike Levin. We've been talking with Stavros Gadenis. Thanks, Stavros, for joining us. You can pre order it. Thank you very much for having me. he is the George R. Johnson Professor of Law at the University of Colorado. You see okay, Matt, I'm gonna read see, I told you Stavros, we have to do this again. I'm gonna I'm gonna do that again. Stavros is the George R. Johnson Professor of Law at the University of California at Berkeley. I am an independent investor and advisor to investors about their activist situations. Anne is the professor of law and Lawrence W. Demouth, Chair of Business Law at the University of Colorado Law School. Ha You can find me Mike at the activistinvestor.com. You can find Anne at law.colorado.edu. And of course, you can find stavros at law.berkeley.edu, where you can probably figure out where his book is at that point. Our podcast is produced and distributed by Free Float Media. Thanks for listening. We'll talk again soon. Now here's Stavros. Let's see if this works. Yeah.