Professor John C. Coffee Jr. Addresses United Nations on Reforming Sustainable Development
New York, December 10, 2014—Columbia Law School Professor John C. Coffee Jr., a renowned expert on corporate governance and securities law, spoke Dec. 8 before the United Nations’ Economic and Social Council (ECOSOC) as part of that body’s continuing review of the obstacles to sustainable development. He was part of a panel focusing on the impact of credit-rating agencies (CRAs) on sustainable development.
Coffee argued that although credit-rating agencies can reduce the cost of capital, particularly to companies in emerging markets, their ability to do so is compromised by the serious conflicts of interests rooted in the “issuer pays” model that continues to dominate the credit-rating industry. As a feasible alternative, Coffee proposed a model under which major debt investors would establish an advisory body that would select a “lead” rating agency for each offering, thereby making the CRAs accountable to end users who rely on them.
Coffee, the Adolf A. Berle Professor of Law and director of the Center on Corporate Governance, frequently provides high-level testimony on securities issues. In October, he appeared before the U.S. Securities and Exchange Commission’s Investor Advisory Committee on “fee-shifting” bylaws. Last year, he addressed the U.N. General Assembly on CRAs.