Law is a system of rules and principles that governs human behavior. It is a social institution created and enforced by public or private organizations, which serves as a means to protect the rights and freedoms of individuals. It is the basis for any society and provides a framework for the conduct of businesses. It is a broad concept, encompassing many different areas of study. The precise definition of law is the subject of a long-running debate. The most commonly accepted definition is that law refers to a set of social and governmental norms.
Laws serve a variety of purposes, including maintaining peace and order in societies, protecting individual rights, preventing discrimination and corruption, and promoting social change. Some legal systems are more effective than others in achieving these goals. For example, while an authoritarian regime may keep the peace and maintain the status quo, it also oppresses minorities and promotes social injustice. Conversely, a democratic regime may be more likely to provide justice and uphold individual rights but lacks the power to enforce its laws or make changes in society.
The nature of law is one of the central issues in philosophy of law and legal studies. Some philosophers have argued that it is an expression of the divine will. Others have emphasized that it is an instrument of human freedom and social development. Still others have argued that it is a complex system of norms that must be balanced in order to be successful.
A key feature of modern law is its judicial process, which provides a mechanism for the resolution of disputes. In antiquity, this was achieved by a system of three levels: eternal or divine law (lex aeterna), natural or positive law (lex naturalis), and human or positive law (lex humana).
The role of legal institutions in modern society has been greatly changed with the advent of new technologies and a growing global economy. These changes have increased the need for international cooperation in addressing global challenges and developing new policy solutions. However, despite these trends, some fundamental challenges remain. Among them are the challenges of institutional change and the need to address global imbalances. This article focuses on the latter challenge by proposing a new approach to legal stewardship that we call “outcasting.” Outcasting would be a way for courts to reduce the imbalances caused by the concentration of ownership in certain stocks in reorganized firms. The proposal involves a process called senior dilution, whereby the reorganized firm issues additional shares to disperse the ownership of the company. Using this mechanism, we show that the concentration of ownership can be reduced without disrupting a firm’s financial and operational performance. We also suggest that outcasting could have other societal benefits, such as promoting transparency and accountability in corporate governance. Copyright 2020, Yale University Press. All Rights Reserved. Reproduction of any material in this publication without written permission is prohibited unless otherwise authorized by law. This includes, but is not limited to, extracts from databases or websites.