Do Boards Have Style? Evidence from Director Style Divergence and Board Turnover

By Robert C. Bird, Paul Borochin, John D. Knopf and Luchun Ma March 15, 2019 by renholding

A board of directors performs essential strategic and oversight roles that maximize the value of the shareholders’ residual claim. However, despite careful selection of board members, too often boards neither reach their full potential nor perform their necessary governance obligations. …

The Effect of SEC Comment Letters on M&A Outcomes

By Bret A. Johnson, Ling Lei Lisic, Joon Seok Moon and Mengmeng Wang March 14, 2019 by renholding

Recent research on the effectiveness of the SEC’s filing review and comment letter process has focused almost exclusively on reviews of Forms 10-K and other periodic filings. Reviews of filings involving transactions such as mergers and acquisitions (M&A) have received …

Cleary Gottlieb Discusses FSOC Proposal to Change SIFI Designation Process

By Katherine Mooney Carroll, Patrick Fuller and John Lightbourne March 14, 2019 by renholding

On March 6, 2019, the Financial Stability Oversight Council (“FSOC”) issued new proposed guidance (the “Proposal”) regarding the designation of nonbank financial companies as “systemically important financial institutions” (“SIFIs”).[1] The Proposal makes substantial …

Can Corporate Governance Be Commoditized?

By Joseph A. Franco March 13, 2019 by renholding

Shared series trusts – an entity structure of recent vintage used in organizing mutual funds or exchange traded funds – are a strange species in the world of business entities. Simply put, such entities are designed to provide governance in …

Skadden Discusses UK Antitrust Authority’s Proposals for More Scrutiny and Weaker Judicial Review

By Bill Batchelor and Tom Selwyn Sharpe March 13, 2019 by abirvarma

On February 21, 2019, the U.K. Competition and Markets Authority (CMA), at the U.K. government’s request, set out “wide-ranging and radical” proposals to reshape U.K. competition enforcement and consumer protection regime.¹

These are proposals at the very earliest stage, …

The Neglected Role of Justification Under Conditions of Uncertainty

By Claire A. Hill and Alessio M. Pacces March 12, 2019 by renholding

A hot topic in corporate governance is the so-called short-termism of publicly held companies. In response to actual and anticipated pressure from activist hedge funds, companies are, some say, focusing too much on short-term gains by, for instance, shunning research …

Equity Market Structure 2019: Looking Back and Moving Forward

By Jay Clayton and Brett Redfearn March 12, 2019 by renholding

Chairman Clayton

Thank you, Dean Rapaccioli, for your kind introduction and for the invitation to Director Redfearn and me to speak about equity market structure.[1]

I’m delighted that my good friend Craig Phillips was able to take time to

…

Listing Gaps, Merger Waves, and the Privatization of U.S. Equity Finance

By Gabriele Lattanzio, William L. Megginson and Ali Sanati March 11, 2019 by renholding

The number of U.S. listed companies declined by almost half between 1996 and 2012, from 8,090 to 4,102, and had risen only slightly, to 4,336, by year-end 2017. However, the real market valuation of these listed companies tripled over the …

SEC Commissioner Speaks to Council of Institutional Investors

By Hester M. Peirce March 11, 2019 by renholding

Thank you, Mary [Francis], for that kind introduction and for the opportunity to be here today. Before I begin, I will give my standard disclaimer. The comments I make today represent my own views and not necessarily those of the

…

Poison Pills and the 20 Percent Rule—a Dangerous Cocktail?

By Andrew G. Khanarian March 8, 2019 by renholding

Amidst the clamorous and wide-ranging debate over poison pills, few commentators have addressed whether these corporate defenses are consistent with NYSE’s and NASDAQ’s well-known prohibitions against large issuances absent shareholder approval (the “20 Percent Rule”). While poison pills are often …

How to Enhance the Value of Shareholder Voting Recommendations

By Bernard S. Sharfman March 8, 2019 by renholding

In a new article, I discuss how investment advisers like Blackrock, State Street, and Vanguard, can become adequately informed prior to voting their proxies without having to read massive amounts of information about the hundreds or thousands of companies …

Top Executives’ Compensation and Firm Survival

By Dimitrios Gounopoulos, Georgios Loukopoulos and Panagiotis Loukopoulos March 7, 2019 by renholding

Executive compensation elicits strong opinions from shareholders, practitioners, and the public alike. Ideally, compensation packages should be designed to attract, retain, and motivate executives to perform in accordance with the objectives of their companies’ shareholders. This idea is consistent with …

Debevoise Discusses Third Circuit’s New Limits on FTC Enforcement Powers

By Luke Dembosky, Ted Hassi, Paul D. Rubin, Leah Martin and Melissa B. Runsten March 7, 2019 by abirvarma

On February 25, 2019, the United States Court of Appeals for the Third Circuit upset decades of Federal Trade Commission (FTC) practice by significantly limiting when the FTC can bring competition and consumer protection enforcement actions in federal court.

In…

The Social Costs of Dividends and Share Repurchases

By J.B. Heaton March 6, 2019 by renholding

On December 9, 2002, UAL Corporation, which operated as United Airlines, filed for bankruptcy protection, leading to huge losses by UAL’s creditors. Those creditors included UAL’s pensioners when UAL’s pension plans were terminated and taken over by the Pension Benefit …

Skadden Discusses Delaware Trends Affecting M&A and Corporate Litigation

By Edward Micheletti, Jenness Parker and Sarah Runnells Martin March 6, 2019 by abirvarma

On February 20, 2019, Skadden held a webinar focused on a number of important developments in Delaware corporate law in 2018 and how such developments might affect M&A litigation in 2019. Specifically, the discussion focused on (i) the increasing importance …

U.S. Corporate DPA Program: International Embarrassment?

By Peter Reilly March 5, 2019 by renholding

In a forthcoming paper in Arizona State Law Journal, I argue two main points regarding Deferred Prosecution Agreements (DPAs) negotiated between federal prosecutors and corporations accused of misconduct: First, since the recent appellate court ruling in United States v.…

ISS Takes an Early Look at 2019 Shareholder Proposals

By Kosmas Papadopoulos March 5, 2019 by renholding

In the U.S., shareholder proposal filings have historically played an important role in advancing corporate governance and in highlighting key risks related to environmental and social issues. Some of the major shifts in governance practices during the past two decades …

Outside Directors at Early-Stage Startups

By Buvaneshwaran Venugopal and Vijay Yerramilli March 4, 2019 by renholding

There is substantial debate about the role of outside (i.e., non-employee) directors in enhancing corporate governance. Most of the research on this topic has focused on public corporations, which are required by law to have adequate representation of outside directors …

Debevoise & Plimpton Discusses the Rise of Secured Bonds in M&A Deals

By Jeffrey E. Ross, Scott B. Selinger, Ramya S. Tiller and Kevin R. Grondahl March 4, 2019 by pss2150

Early 2019 has seen a wave of issuances of secured bonds to finance large acquisitions. The likelihood of slower rate increases by the Fed has led to an uptick in investor demand for secured bonds while making the pricing on …

March Madness – Brexit Edition

By Amy Hutchings March 1, 2019 by renholding

The countdown to Brexit on March 29 brings new twists and turns every day. On Wednesday, the UK’s House of Commons voted on amendments to the Brexit process, establishing a March timetable for decisions on whether to seek a deal, …

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

March 2019