Managerial Activism and Its Role in the Corporate Sector

By Senay Agca and Asli Togan Egrican May 31, 2019 by renholding

While shareholder activism has drawn close attention, the activism of managers has been largely overlooked. One way CEOs may engage in activism is through collective action in business groups. This type of activism allows managers to coordinate among themselves and …

SEC Commissioner Talks a Quarter Century of Exchange-Traded Fun

By Hester M. Peirce May 31, 2019 by renholding

Since the first exchange-traded fund (“ETF”) launched in 1993, ETFs have proven to be one of the most useful and successful innovations in the registered fund space under the Investment Company Act (“Act”) of 1940. The innovation did not stop

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“Centros,” California’s ‘Women on Boards’ Statute, and the Scope of Regulatory Competition

By Jill E. Fisch and Steven Davidoff Solomon May 30, 2019 by renholding

It has been 20 years since the European Court of Justice issued its decision in Centros Ltd. v. Erhvervs – og Selskabsstyrelsen (Centros). Since that time, Centros has been widely understood as shifting the European Union (EU) from …

Regulatory Arbitrage, Unclear Terminologies: A Challenge to Global Cryptoasset Regulations

By Apolline Blandin, Michel Rauchs and Hatim Hussain May 29, 2019 by renholding

Few innovations in finance have emerged in recent years that are as controversial or present as many challenges to regulators and policymakers as cryptoassets. A key question for regulators and market participants is the extent to which the difference between …

Wachtell Lipton Discusses the Corporate Form for Social Good

By David A. Katz and Laura A. McIntosh May 29, 2019 by renholding

State legislation allowing the establishment of benefit corporations—for-profit companies with a stated public purpose—has become widespread over the past decade. This increasingly available corporate form provides a mandate, and a safe harbor, for corporate leaders to pursue societal good along …

How to Craft Policies on Innovative Corporate Law Provisions

By Benjamin Edwards May 28, 2019 by renholding

Although states stand to earn significant revenue from developing a system of corporate law and encouraging companies to incorporate under it, most tend not to make the necessary investments. That may be perfectly rational. After all, a state may not …

ISS Discusses the Seven Venial Sins of Executive Compensation

By John Roe May 24, 2019 by renholding

Compensation disclosures have grown significantly over the last decade (mostly for the better), and they continue to evolve with the ongoing engagement between companies and shareholders. Certain compensation practices are known for raising investor concerns, leading to difficult conversations between …

Blockchain Solutions for Agency Problems in Corporate Governance

By Wulf Kaal May 23, 2019 by renholding

As a foundational technology, blockchain creates the infrastructure for decentralized networked governance that, over time, creates the environment that enables the removal of internal and external monitoring mechanisms previously necessitated by agency problems in corporate governance. Blockchain technology facilitates a …

SEC Commissioner Peirce on the Need to Reexamine Rules

By Hester M. Peirce May 23, 2019 by renholding

Thank you, Peter [Easton] for that kind introduction. I appreciate the chance to be with you at today’s conference to discuss Hot Topics at the Securities and Exchange Commission. It is a small population of people who would describe anything

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Executive Compensation: Is It Corrupted?

By Martijn Cremers, Saura Masconale and Simone M. Sepe May 22, 2019 by renholding

There is a general view that executive compensation in corporate America is inefficient and corrupted. Discontent with executive pay is not a recent trend; rather, “scrutinizing, criticizing, and regulating high levels of executive pay has been an American pastime for …

SEC Chairman Announces Roundtable on Management, Reporting, and Regulation

By Jay Clayton May 22, 2019 by renholding

Our capital markets benefit from a level of retail investor participation that is unparalleled among the world’s large industrialized countries. Our Main Street investors who, day in and day out, put their hard-earned money to work for the long term

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Directors’ Ties to Non-CEO Executives: Information Advantage or Entrenchment?

By Udi Hoitash and Anahit Mkrtchyan May 21, 2019 by renholding

Understanding factors that facilitate or inhibit boards’ ability to monitor the chief executive officer (CEO) is central to corporate governance. In a recent paper, we analyze how informal relationships between directors and non-CEO executives (hereafter, internal ties) affect board effectiveness.…

Did Boeing’s Compensation Committee Play a Role in the 737 Max Scandal?

By Dov Fischer May 20, 2019 by renholding

The Boeing 737 Max scandal is one of the most serious corporate crises in U.S. history. While companies like Enron, Arthur Andersen, and Lehman Brothers were replaceable, Boeing is not. Consumers and airlines around the world now view the 737 …

Debevoise Discusses When to Disclose a European Deal

By James C. Scoville, Pierre Clermontel, Vera Losonci and Philippe Tengelmann May 20, 2019 by renholding

In Europe, when negotiating a transaction which may affect the market price of listed instruments of the parties, a key question arises: when to disclose it to the market? The short answer is as soon as possible unless you have …

SEC Commissioner Peirce Talks Digital Assets: How We “Howey”

By Hester M. Peirce May 17, 2019 by renholding

One year ago, I gave a speech—appropriately in Southern California—called “Beaches and Bitcoin.”[1] At that time—not so long ago in analog time but eons ago in digital time—the burning question was how to decide when issuing tokens constituted an

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Paul Weiss Offers M&A at a Glance for April 2019

By Matt Abbott, Scott Barshay, Angelo Bonvino, Ariel Deckelbaum, Jeffrey Marell, Robert Schumer and Taurie Zeitzer May 17, 2019 by renholding

M&A activity in the U.S. and globally generally fell in the month of April. The number of U.S. deals decreased by 15.6%, to 622, and the number of global deals decreased by 10.3%, to 2,530. However, the total value of …

The Future of Financial Institution Resolution

By Paul L. Lee May 16, 2019 by renholding

One of the principal lessons learned from the 2007-2009 financial crisis was the need for new legal regimes to facilitate the rapid and orderly resolution of systemically important financial institutions without a government bailout. In the final part of a …

Emergency Guarantee Authority: The Pros and Cons

By Reynolds Holding May 15, 2019 by renholding

Today, we present a debate among preeminent scholars about Columbia Law School Professor Kathryn Judge’s proposal for an emergency guarantee authority that could help contain the fallout from another financial crisis. The first piece is Professor Judge’s summary of her …

Why We Need a Guarantor of Last Resort

By Kathryn Judge May 15, 2019 by renholding

More than a decade has passed since the worst of the 2007-2009 financial crisis. In that time, we have learned that some of the gravest consequences of the crisis were not the economic fallout, but the political backlash it triggered. …

Guarantor of Last Resort: Is There a Better Alternative?

By Morgan Ricks May 15, 2019 by renholding

Larry Summers, who was one of President Obama’s key economic advisors when the Dodd-Frank Act of 2010 was enacted, recently decried what he called “excessive populism” in portions of that legislation. This might seem surprising; Dodd-Frank’s technocracy-on-steroids approach (848 pages! …

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The CLS Blue Sky Blog

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

May 2019