Is Social Capital Associated with Corporate Innovation?

By Iftekhar Hasan, Chun-Keung (Stan) Hoi, Qiang Wu and Hao Zhang July 31, 2020 by renholding

Both formal and informal institutions affect economic behavior in important ways, as economist Douglass C. North explained in his 1993 Nobel Prize lecture. Formal institutions include laws and regulations, and informal institutions include culture and norms. In a recent study, …

ResTech: Innovative Technologies for Crisis Resolution

By Giuseppe Loiacono, Alessandro Mazzullo and Edoardo Rulli July 30, 2020 by renholding

The increasing use of financial technologies (FinTech) by market participants has fostered a discussion among public authorities on the use of similar technologies for regulatory (RegTech) and supervisory (SupTech) purposes. Innovative technologies could also be applied to crisis resolution: the …

Sullivan & Cromwell Discusses Amendments to Delaware’s General Corporation Law

By Sullivan & Cromwell July 30, 2020 by renholding

On July 16, 2020, Delaware’s Governor signed House Bill 341 (the “Amendments”),^[1] amending key provisions of Delaware’s General Corporation Law (“DGCL”). Among other things, the Amendments modify existing statutory provisions governing boards of directors’ power to adopt emergency bylaws, …

Gender and Executive Job Mobility: Evidence from Mergers and Acquisitions

By Vishal K. Gupta, Sandra Mortal, Vikram K. Nanda and Xiaohu Guo July 29, 2020 by renholding

While the obstacles women face in moving up the organizational hierarchy (captured in the popular metaphor of the “glass ceiling”) have been well studied, much less attention has been paid to understanding the circumstances women face after they reach senior …

Davis Polk Discusses OCC Letter Confirming that National Banks May Provide Cryptocurrency Custody

By Randall Guynn, Jai Massari, Daniel Newman and Jeremy Sklaroff July 29, 2020 by renholding

The Office of the Comptroller of the Currency (the OCC) issued an interpretive letter (the Letter) confirming that national banks and federal savings associations (together, banks) may provide cryptocurrency custody services.[1] This Letter is the latest …

Lessons from Luckin Coffee: The Underappreciated Risks of Variable Interest Entities

By Jonathan Barnett July 28, 2020 by renholding

On April 2, China’s Luckin Coffee announced that some of its employees, including the chief operating officer, had fabricated over $300 million in reported revenues. On April 21, the Securities and Exchange Commission and the U.S. Public Company Accounting Oversight …

The New Civil Code: ISS and Glass Lewis as Lawmakers

By Neil Whoriskey July 28, 2020 by renholding

ISS and Glass Lewis have arrogated to themselves the power to make law, promulgating a civil code of astounding breadth and detail, ruling over decisions on board composition, director qualifications, term limits, majority voting standards, executive compensation, capital structure, poison …

Why the SEC’s Proposal to Amend Rule 13f-1 Should Fail

By Eduardo Gallardo July 27, 2020 by renholding

On July 10, the Securities and Exchange Commission (SEC) proposed a 35-fold increase – from $100 million to $3.5 billion – in the threshold for requiring institutional investment managers to publicly report their equity holdings on Form 13F.[1] This …

SEC Chairman Speaks on Amendments to Proxy Solicitation Rules

By Jay Clayton July 27, 2020 by renholding

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act. Today we have two items on the agenda, both continuations of our ongoing work to modernize and enhance the

…

A New Case for Human Rights Due Diligence in Supply Chains

By Kish Parella July 24, 2020 by renholding

In a new paper, “Protecting Contract’s Hidden Parties,” I argue that harm to third parties from supply chains offers a compelling reason for requiring human rights due diligence in supply chains. Many scholars have turned to fiduciary duties or negligence …

Exequity Discusses S&P 500 Companies’ Use of “Relative Total Shareholder Return”

By Ben Burney July 24, 2020 by renholding

The economic consequences of the COVID-19 pandemic have upended countless budgets for 2020 and rendered long-term forecasts speculative at best. By now, most companies providing financial guidance have withdrawn it. Uncertainty abounds.

All the while, investors, proxy advisors, and other …

EBITDAC, Civil Liability, and New Paradigms

By Suprotik Das July 23, 2020 by renholding

COVID-19 has led companies to patch-up financial reporting by adding estimates of pre-COVID-19 profits to their EBITDA. Recently, COVID-19 prompted measuring-equipment manufacturer Schenck Process, for example, to add back €5.4 million, resulting in an adjusted EBITDA of €18.3 …

Wachtell Lipton Puts a Spotlight on Boards

By Martin Lipton and Carmen X.W. Lu July 23, 2020 by renholding

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and …

Bank-Fintech Partnerships, Outsourcing Arrangements, and the Case for a Mentorship Regime

By Luca Enriques and Wolf-Georg Ringe July 22, 2020 by renholding

Fintech firms, once perceived as disruptors of the traditional banking industry, are now increasingly seen as attractive partners for established financial institutions. Partnership arrangements between banks and new financial technology startups have therefore mushroomed over the last several years. Such …

Davis Polk Discusses ESG Disclosure Frameworks

By Betty Moy Huber, Joseph Hall and Alexandra Munson July 22, 2020 by renholding

Updates in the past two months to voluntary ESG disclosure frameworks raise questions for companies about these overlapping and arguably competing standards.

GRI Launches Sector-Specific Disclosure Framework

On July 8, 2020, the Global Reporting Initiative (GRI) published an initial draft…

The Specter of Political Bias Is Haunting Corporate Governance

By Stefan Padfield July 21, 2020 by renholding

In 1985, the Delaware Supreme Court, in Unocal Corp. v. Mesa Petroleum Co.,[1] held that the “omnipresent specter” of a conflict of interest sufficiently clouds judicial review of anti-takeover measures to require application of enhanced scrutiny. Notably, the …

Cleary Gottlieb Discusses SEC Proposal to Significantly Change Reporting by Institutional Investors

By Francesca Odell, Jeffrey Karpf, Adam Fleisher, James Langston and Marc Rotter July 21, 2020 by renholding

On July 10, 2020, the Securities and Exchange Commission (the “SEC”) proposed changes that would substantially reduce the number of investors required to file quarterly reports showing their holdings of U.S.-listed equities on Form 13F.^[1] The SEC’s …

Disgorgement After Liu v. SEC: The Game Is On!

By John C. Coffee, Jr. July 20, 2020 by renholding

Experienced litigators know that an adverse appellate decision (even from the U.S. Supreme Court) rarely ends their case. The question is instead: What is the next move? What defenses do we fall back on? So it is likely to be …

Skadden Discusses Schrems II: Court Strikes Down EU-U.S. Privacy Shield

By Stuart D. Levi, Eve-Christie Vermynck and Daniel Millard July 20, 2020 by renholding

On July 16, 2020, the Court of Justice of the European Union (CJEU) struck down the EU-U.S. Privacy Shield as a valid mechanism for transferring personal data from the European Economic Area (EEA) to the United States (Schrems II). The …

Central Bank Digital Currencies and the New World of Money and Payment Systems

By Douglas W. Arner, Ross P. Buckley, Dirk A. Zetzsche and Anton N. Didenko July 17, 2020 by renholding

Three catalysts are causing a fundamental reorientation of domestic and international monetary and payment systems: Facebook’s Libra, China’s central bank digital currency (the Digital Currency / Electronic Payment (DCEP) system), and the COVID-19 pandemic. These catalysts stand in stark contrast …

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The CLS Blue Sky Blog

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

July 2020