Boards Should Use Diversity as a Defense Against Activists

Many institutional investors have made increasing the diversity of corporate boards a priority, yet activist investors that rely on the support of these institutional investors often make boards less diverse. Boards should take advantage of this divergence between the priorities of institutional investors and the actions of activist investors in resisting activist campaigns, and prepare for those campaigns by increasing board diversity.

Activists’ Effect on Board Diversity

The financial press has highlighted how activists reduce board diversity, [1] and a recent white paper by ISS and the Investor Responsibility Research Center Institute (“IRRCi”) has provided proof.[2] The ISS and … Read more

Insider Trading: Personal Benefit Has No Place in Misappropriation Tipping Cases

The Supreme Court’s decision last December in Salman v. United States[1] settled important issues concerning Rule 10b-5’s reach over trades based on a tip of confidential material information. One important question, however, remains unanswered: In tipping cases based on the misappropriation theory, is it necessary, as some courts have stated, to show that the tipper enjoyed a personal benefit of which the trader was aware? There are commentators who assume the need for such a showing,[2] but in fact the lower courts have split on the issue and the Supreme Court in Salman explicitly said that it was … Read more