Sky Blog
On May 11, two of the world’s most valuable private companies all but admitted that the AI private market boom has been built on shaky legal ground.
OpenAI announced that unauthorized transfers of its equity, which were made through special …
Though shareholder activism is a pivotally important corporate governance topic, historical analysis of shareholder engagement with publicly traded companies has generally been cursory. In a recent paper I do much to correct matters for the United States in the first
Environmental, social, and governance (ESG) considerations have moved from the periphery of corporate governance into the heart of fiduciary decision-making. What began as a largely voluntary framework for assessing non-financial risks has become a central point of legal, political, and …
What should fiduciary duty require when new technology allows corporate directors to see risk more clearly? Though corporate law has long assumed that directors must make decisions under conditions of uncertainty, artificial intelligence and emerging quantum-computing tools may change what …
On April 7, the Federal Reserve chair and U.S. Treasury secretary called an emergency meeting with America’s top bank CEOs. The reason: an AI model capable of autonomously hacking major corporations, finding thousands of software vulnerabilities no human ever caught, …
Delaware’s corporate law grants officers and directors broad discretion, subject to one condition: Get the process right. Want to pay the CEO millions of dollars? Go ahead—just be sure you have a compensation committee empowered to negotiate the pay package …
ExxonMobil’s board has recommended that shareholders vote at the May 27 annual meeting to approve the company’s change in domicile from New Jersey to Texas—a move that has triggered debate about whether Texas’s recent corporate-governance reforms weaken shareholder rights relative …
Corporate governance is often described as cooperative. On this account, shareholders, directors, officers, employees, suppliers, customers, communities, and other constituencies are members of a team, each contributing to a common enterprise, and each entitled to some consideration in the distribution …
In its recent decision in Marchner v. B. Riley Financial, Inc., the Delaware Court of Chancery reaffirmed the principle that Caremark cannot be used to repackage hindsight attacks on failed investments as fiduciary breaches. The court explained that directors’ …
Activism remains a persistent and increasingly important feature of the landscape for publicly traded insurance groups.
As we have discussed in prior Debevoise Updates, activist campaigns in recent years fall into two broad categories: institutional investors holding long-term positions and …
Few issues in corporate governance have become as politically charged as environmental, social, and governance (ESG) policies. What began as a framework for integrating ESG factors into investment and risk analysis has, in recent years, turned into a broader ideological …
Corporate short-termism–where companies sacrifice long—term value for transient boosts in short-term stock prices—has long been a hot topic of debate in corporate law and political discourse. Critics argue that activist hedge funds, performance-based compensation, and quarterly reporting have forced public …
When does a shareholder become powerful enough to control a corporate vote?
That question has taken on unusual importance in Delaware. Unlike ordinary shareholders, controlling shareholders are subject to fiduciary duties. And after litigation over Elon Musk’s compensation package, in …
The equitable remedy known as piercing the corporate veil lacks coherence and consistency. No one knows when or why a request to hold shareholders personally liable for a judgment against their corporation might occur. This uncertainty persists despite numerous, comprehensive …
The charters for Boeing and Google, two of the largest corporations in history, run just seven and eleven pages long, respectively. These charters say almost nothing about the nature of the company’s business and do not contain policies on business …
Over the past decade, many companies have embraced the language and practices of stakeholder governance. Corporate mission statements, sustainability reports, and ESG disclosures frequently highlight commitments to employees, communities, and environmental sustainability. Boards authorize charitable-giving programs, diversity initiatives, and policies …
In a significant ruling last month, the Delaware Supreme Court reversed a Chancery Court decision that had invalidated an 18-month, nationwide noncompete agreement at the pleading stage. The decision in Payscale Inc. v. Norman, __ A.3d __, No. 297, …
A corporation is perpetual by default – but its lifespan can easily be limited through either a charter provision or contract. Does anyone actually do that? Indeed they do – and for good reason – as I explain in a …
Delaware is dead, long live Delaware? To a U.S. M&A practitioner, much of the “Dexit” debate about whether corporations should exit Delaware as their jurisdiction of incorporation in favor of another state feels as if it may come full circle …