Latin American exponential economic growth in recent years has brought to surface a host of legal challenges. More than ever before, international and domestic investors as well as national governments recognize the importance of the legal framework to enable sustainable growth within the region and project it globally. Throughout Latin America, the swift growth has placed the spotlight on the legal structure of financial markets and corporations as a way to foster long-term and fair economic development. At the heart of the debate is the relationship between capital structure and governance. Entrepreneurs and investors need to have a solid understanding of the financial and governance framework as implicit determinants of business failure or success.

This seminar will introduce students to corporate governance theory and practice in Latin America, focusing on Argentina, Brazil and Mexico. The course will explore how and why corporate law shapes and constrains corporate governance structures. Many topics will be approached within an agency cost framework, focusing upon conflicts between stockholders, managers, and other constituencies. Students will be encouraged to analyze and discuss the real-world problems faced by parties, legal counselors and courts called upon to judge such transactions.

Some of the issues to be covered will be: different understandings of corporation objectives and its relations with the theory firm; mechanisms that generate and constrain private benefits and agency costs, including public regulation, disclosure requirements, shareholder voting, derivative suits, takeovers; the role of debt and stock in corporate governance, and the impact of the growing role of derivatives on how corporations are or should be governed; how securitization is shaping the finance structure; various types of financing available to business corporations and related legal issues (issuance of equity and debt, commercial loans and bonds, instruments of mezzanine financing, intra-group cash management, derivatives, etc); private practices such as board independence and monitoring mechanisms; corporate distress private and public treatment.