Hillary A. Sale, JD, the Walter D. Coles Professor of Law and professor of management, talks with students. Sale is co-author, with John C. Coffee, of the leading casebook on federal securities regulation, and a recipient of the David M. Becker Professor of the Year Award.
Sale says some of the best moments about being a professor are when, after the class is over, students come and visit and remain in touch even after graduation. At WUSTL, she enjoys building collaborative relationships across campus. Sale is actively involved with the New York City Regulatory and Business Externship and a new entrepreneurship course embedded at a St. Louis tech incubator.
You’re known as one of the nation’s top scholars and teachers in corporate and securities law. What do you consider your main area of expertise?
I focus mainly on corporate governance, which typically is defined as the relationship between shareholders, officers and the board of directors. I look at corporate issues relating to these groups, with a focus, first and foremost, on the board of directors — how the board thinks, acts and manages its tasks.
Because I have a strong securities background, I also think about how federal law and state law interact to build the web of support that the directors need to do their jobs well.
How did you become interested in this field?
You know, it’s interesting. Even in law school, I was interested in corporate governance, but I really didn’t learn much about it until I was in practice with WilmerHale LLP. I did some work with corporate boards and some securities work, and just developed an endless fascination with it.
The board is the locus of power in a corporation in a really interesting way. It’s the place where strategy gets laid out, and there are all kinds of interesting questions that come up.
Securities law and corporate governance issues have been in the news quite a bit. People automatically think of Enron or, even more recently “Too Big to Fail.” What role have corporate boards played in these scandals?
Well, from the perspective of corporate governance, we’ve rocked from one crisis to the next. Even between Enron and 2008, we had stock options backdating, which is also a crisis in governance.
Can we blame the boards of directors for the financial crisis? I think not. What we had was a lot of bad decision-making, and we did not have enough regulatory structure in place to stop some of it.
And the fact is, we had some people who did bad stuff. It’s all of those layers — a lot of incentives going in the wrong direction.
What do you think is next in this field? Could we move to too much regulation?
Well, right now it’s an unknown, because so much of the regulation that’s necessary to implement Dodd-Frank doesn’t exist yet. Arguably, the SEC is way behind in promulgating regulations. On the other hand, the SEC is pretty darn busy. So, I find it hard, really, to blame them. But I think we’ll see more financial regulations coming out now that the election’s over.
I think the crisis proves that some areas that were completely unregulated before do need regulation. The fact is, in some instances, if we had smarter regulations, we wouldn’t be where we are today.
Your interest in corporate boards goes beyond the classroom. Why have you taken on a leadership role with DirectWomen, [a national program designed to develop and position an elite group of exceptional senior women lawyers for service as directors of major U.S. corporations]?
Diversity and the corporate board is one of my great passions, and I do spend a lot of time on it. There are a lot of studies out there showing that diverse groups perform better, and there’s no reason to think that isn’t also true in the boardroom. I’ve certainly heard directors say it. I’ve also heard CEOs say it.
Measurement is a little more complicated though. I’m hoping to do some research with colleagues at Olin to try to get a grip on measuring the impact of diversity on a board.
I’ve been involved with DirectWomen since its first year in 2007, and I started organizing the Institute in 2008. I helped the founders think about the program content and recruit some of the leading academic voices on governance. We’ve helped a sizable group of women join major corporate boards.
Favorite author: St. Louis’ Curtis Sittenfeld
Favorite recipe: “I really like to open Bon Appetit and make something new and different each time.”