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Exuding ease and self-confidence, corporate law professor extraordinaire Charles M. Elson delivered the word last week to members of Delaware’s legal and financial press. This would-be re-shaper of the tenets of corporate governance, this ivy-tower theorist who descended long enough to shoot down the legendary “Chainsaw Al” Dunlap, thinks he has the key to the future management of America’s mega-companies. And he’s willing to share. “Corporate structure and corporate performance are related,” said Elson, who credits former Chancery Court Chancellor William Allen with this perception. “Corporate structure does have an impact on how a corporation performs, but lawyers make the rules for a corporation, rules for governing and board conduct, without any idea of how they affect performance,” he said at a press conference Aug. 24 at the University of Delaware. Allen, Elson said, believed that attorneys should start talking to the business people so that the structure of corporations are no longer drawn up in a vacuum removed from the realities of how a business performs. This need for dialogue is why Elson is in Delaware. He is the first occupant of the Edgar S. Woolard Jr. Chair of Corporate Governance at UD’s College of Business and Economics. In that capacity Elson plans to start the conversation between the legal and business sides of American corporations and along the way perhaps change the rules for corporate governance. If the lawyers and business people are sensitized to each other the two groups together “could do some great things,” Elson said. To that end, Elson will, among other initiatives, hold a series of seminars open to the public with invited guests of the first rank to discuss aspects of Allen’s idea. WHY DO THIS IN DELAWARE? “Chancery Court is the most significant corporate court in America, probably one of the most important in the world,” Elson explained. More than half of the Fortune 500 companies are incorporated in Delaware. Almost as significant, Delaware Chancery Court opinions carry great weight and capture widespread notice outside of the confines of the First State. Delaware judges, Elson said, create corporate structure. Elson himself has already made an impact on corporate organizations. In 1993 he wrote an article saying corporate directors also should be stockholders, because directors will serve stockholder interests better if they own stock. Elson’s ideas had a noticeable affect on corporate America and directors started getting pieces of the businesses they were overseeing. Al Dunlap reportedly used Elson’s ideas when he successfully turned around Scott Paper Co. When Dunlap took on the troubled Sunbeam Corp., he personally brought Elson onto the board. But when Dunlap got the company into more trouble, Elson led the successful revolt against the CEO. A graduate of Harvard University and the University of Virginia Law School, Elson comes from Stetson University College of Law in St. Petersburg, Fla., where he has spent the last 10 years as a corporate law professor. He also has worked with Sullivan & Cromwell in New York. Right now Elson appears to be at home in Delaware. “It was Bill Allen’s brilliance in understanding the link between corporate structure and performance,” he said. “This really is the future of corporate legal education and this really is the place to do it.”

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