The Duality of Corporate Purpose

By Dorothy S. Lund and Elizabeth Pollman July 31, 2023 by renholding

In a forthcoming chapter, we explore the duality of corporate purpose, which reflects two sides of corporate law and governance. First, because each corporation must specify a purpose in its charter, corporate purpose can be understood at the level of …

Treasury Should Keep Global Anti-Corruption Efforts in Mind When Drafting Whistleblower Regs

By Stephen M. Kohn July 31, 2023 by renholding

The U.S. Treasury Department and the Financial Crimes Enforcement Network (FinCEN) are in the midst of drafting regulations to implement the anti-money laundering (AML) whistleblower program. The program, established in 2021 by the AML Act of 2020 and reformed in …

The Argument for Strong Board Oversight of Artificial Intelligence

By Michael W. Peregrine and Alya Sulaiman July 28, 2023 by renholding

Corporate governance can play an important role in a company’s approach to machine learning technologies such as artificial intelligence (“AI”) and in the mitigation of risks associated with their use.

A thoughtfully developed governance structure for AI will reflect oversight, …

Pay for Prudence

By Salman Arif, John Donovan, Yadav Gopalan and Arthur Morris July 27, 2023 by renholding

Financial crises are often followed by debates about whether bankers’ incentives helped create distress in the financial sector. We contribute to this debate by documenting the extent to which bankers’ pay contains prudence-related targets, the association between those targets and …

SEC Chair Supports Rules on Public Company Cybersecurity Disclosures

By Gary Gensler July 27, 2023 by renholding

Today [July 26], the Commission is considering adopting final rules regarding cybersecurity disclosures by public companies. I am pleased to support these rules because they will enhance and standardize disclosures to investors with regard to public companies’ cybersecurity practices as

…

SEC Commissioner Peirce Dissents from Rules on Cybersecurity Disclosure

By Hester M. Peirce July 27, 2023 by renholding

Thank you, Chair Gensler. Although better than the proposal, this final cybersecurity disclosure rule continues to ignore both the limits to the SEC’s disclosure authority and the best interests of investors. Moreover, the Commission has failed to explain why we

…

Unbundling Climate Change Risk from ESG

By Jeffrey N. Gordon July 26, 2023 by renholding

Perhaps the most important current development in corporate governance is the growing divide between the United States and the European Union on core questions of fiduciary duty when it comes to ESG. I want to describe this growing divide, to …

Cravath Discusses PCAOB’s Proposed Amendments to Auditing Standards

By Elad Roisman, Michael Arnold, Kimberley Drexler and Lisa Kohl July 26, 2023 by renholding

On June 6, 2023, the U.S. Public Company Accounting Oversight Board (the “PCAOB”) proposed amendments to its auditing standards that would increase auditor obligations in identifying, evaluating and communicating with respect to noncompliance with laws and regulations (“…

How Corporate Law in the Global South Has Pioneered “Heterodox Stakeholderism”

By Mariana Pargendler July 25, 2023 by renholding

How do the corporate laws of Global South jurisdictions differ from their Global North counterparts? Prevailing stereotypes depict the corporate laws of developing countries as either antiquated, mere copies of Global North models or plagued by problems of enforcement. While …

Skadden Discusses New Senate Crypto Bill Limiting SEC Regulatory Role

By David Meister, Chad E. Silverman and Daniel Merzel July 25, 2023 by renholding

A bipartisan bill introduced in the U.S. Senate two weeks ago seeks “to bring crypto assets within the regulatory perimeter” by granting oversight responsibility to the Commodity Futures Trading Commission (CFTC) for most forms of cryptocurrency.

The new bill, sponsored …

How the SEC Uses Information Disclosed on Earnings Conference Calls

By Alina Lerman, Thomas D. Steffen and Kangkang Zhang July 24, 2023 by renholding

Earnings conference calls are an important way for firms to communicate with external stakeholders. Equity shareholders, buy-side and sell-side analysts, debtholders, and other capital market participants view the calls as informative beyond the contemporaneous earnings announcements. Yet, little is known …

Paul Hastings Discusses New Draft Antitrust Merger Guidelines

By Michael Wise, Michael Murray and Noah Pinegar July 24, 2023 by renholding

The Department of Justice Antitrust Division and Federal Trade Commission issued new draft Merger Guidelines on July 19 that aim to significantly increase scrutiny of merger activity. The new Merger Guidelines would replace prior pronouncements of antitrust policy from the …

Sullivan & Cromwell Discusses Delaware Chancery Ruling on Corporate Speech and Business Judgment

By H. Rodgin Cohen, Brian T. Frawley, William B. Monahan, Melissa Sawyer and Marc Trevino July 21, 2023 by renholding

On June 27, 2023, the Delaware Court of Chancery in Simeone v. The Walt Disney Company held that a stockholder’s disagreement with a corporation’s decision to speak on public policy did not constitute a “proper purpose” for making a books …

Wachtell Lipton Revisits the “New Paradigm” for Corporate Governance

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum and Carmen X.W. Lu July 21, 2023 by renholding

In view of the attacks on “woke” corporations, ongoing legislative opposition to the consideration by investors and corporations of environmental, social and governance (ESG) issues, legal challenges to elements of ESG itself (notably, initiatives designed to further diversity, equity and …

New California Legislation Would Be a Major Step Forward for Climate Disclosure

By Michael B. Gerrard and Eric W. Orts July 20, 2023 by renholding

The Securities and Exchange Commission regulations on climate disclosure, first proposed in March 2022 and likely to be issued in final form in October 2023,[1] have drawn considerable controversy and face an uncertain fate in the inevitable litigation.[2]…

On Corporate Social Issues, U.S. Consumers Do Not Put Their Money Where Their Mouths Are

By Hans Bonde Christensen, Emmanuel T. De George, Anthony Joffre and Daniele Macciocchi July 19, 2023 by renholding

Despite an increasing focus on corporations that profit from social injustices and misconduct, governments and international agencies have had limited success in addressing these issues. Advocates for change suggest that stakeholders, particularly retail consumers, could help, given that their purchasing …

SEC Chair Gensler Speaks About the Financial Risks of Artificial Intelligence

By Gary Gensler July 19, 2023 by renholding

Thank you, Mark, for that kind introduction. As is customary, I’d like to note that my views are my own as Chair of the Securities and Exchange Commission, and I’m not speaking on behalf of my fellow Commissioners or the

…

Ripping the Ripple Opinion

By Ilya Beylin July 18, 2023 by ilyabeylin

Last Thursday’s split summary-judgment decision in the case that the Securities and Exchange Commission (SEC) brought against Ripple Labs, Inc. (Ripple) and certain of its senior leaders is bonkers. In partly holding for the defendants, the opinion ignores well established …

SEC v. Ripple: Everyone Loses

By Edwin Hu July 18, 2023 by renholding

On July 13, Judge Analisa Torres handed down a long-awaited decision in SEC v. Ripple. Crypto enthusiasts immediately began celebrating the opinion as holding that XRP, the Ripple token, was not a security. Others welcomed the finding that certain …

How Companies and the Market Respond to the Issuance of Green Bonds

By Sanjai Bhagat and Aaron Yoon July 17, 2023 by renholding

During the past decade, many corporations across the globe have issued green bonds – which are identical to traditional corporate bonds except that their proceeds are dedicated to environmental and climate-friendly corporate investments. Since they were first created in 2013, …

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The CLS Blue Sky Blog

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

July 2023