Sky Blog
Critiques of both ESG and anti-ESG shareholder proposals[1] provide a valuable opportunity to clarify what matters in modern corporate governance: active shareholder participation, empirical evidence, and a holistic understanding of risk. While Michael Levin and others rightly highlight the …
Proxy advisers play a pivotal role in corporate governance by providing institutional investors with recommendations on how to vote at shareholder meetings. These firms influence key corporate decisions, including the election of directors, executive compensation, and governance policies, thereby exerting …
In an era of heightened political uncertainty – from gridlock in Washington to changes within the European Union – political risk has become a top concern for many boards of directors. Firms often cultivate political connections to mitigate these risks …
The rise of work-from-home following the COVID-19 pandemic sparked vigorous debate about its impact on productivity. While other studies have focused on routine tasks like call center operations or data entry, our recent study examines a high-skilled group: equity analysts, …
The underrepresentation of women in the top executive ranks of U.S. corporations is well-documented. Less understood is what happens after women reach the C-suite: Do they keep these jobs as long as men?
Our research examines this question in depth, …
Corporate culture matters. A flawed culture can lead to disaster even when a company boasts an elaborate compliance program. Yet scholars and practitioners still know surprisingly little about what legal mechanisms can generate accountability for corporate culture gone wrong.
In …
Proxy advisers exercise immense influence through their voting recommendations to shareholders. Corporations, aware of the importance of those recommendations, expend valuable resources to ensure that the recommendations align with management’s preferences by hiring governance consultants to influence outcomes. These consultants …
While climate change poses clear threats to corporate financial health, from disrupted supply chains to higher insurance costs, our new research shows that climate risks don’t always lead to lower credit ratings. In fact, we find, firms that increase transparency …
Following a string of high-profile data breaches and other cybersecurity failures, investors and regulators increasingly expect corporate directors to monitor cyber risk. But what does board oversight of cybersecurity look like in practice, and is it effective? In a recent …
Over the past two decades, investor demand for firms’ non-financial information, particularly Environmental, Social, and Governance (ESG) data, has surged. This has led to the emergence of numerous ESG rating agencies, which assimilate and transform complex, non-financial disclosures into more …
While shareholder proposals on governance are perennial favorites that win majority support from shareholders, advisory proposals that continue to receive significant support from a bloc of investors highlight areas in which enhanced corporate disclosure could be material to a significant …
Delaware occupies a central place in American corporate governance. Its corporate code, judiciary, and bar are widely respected for their expertise and responsiveness. Over the years, Delaware has earned a reputation as the jurisdiction of choice for public companies and …
In response to fears that companies would reincorporate in states like Texas or Nevada, the Delaware legislature recently enacted a controversial bill (SB-21) that makes the state’s law friendlier to persons controlling corporations. Many writers have commented on the Delaware …
Corporate law requires the directors of ordinary, for-profit corporations to manage firms in the best interests of shareholders, forbidding directors from sacrificing corporate profits in service of other goals. There has been longstanding debate, even amid proponents of this rule, …
In a new paper, I examine the potential of sunset clauses – legal provisions that automatically phase out enhanced voting rights over time or upon certain events – to mitigate the imbalances and entrenchment risks associated with tenure-based voting structures, …
The recent federal court ruling in Bartz v. Anthropic PBC has significantly shifted the legal terrain for corporate governance and artificial intelligence. While the case directly addresses copyright issues, it has implications boards of directors, compliance departments, and AI policy.…
In a recent paper, we offer fresh insights into how climate-related communication can materially influence corporate finance. We find that firms whose earnings calls contain positive climate change sentiments (effectively communicating firms’ contribution to protecting the environment) tend to have …
In a new paper, we explore the relationship between co-opted directors and firms’ anti-takeover provision (ATPs). We argue that the relationship can be viewed through traditional agency theory, which highlights the potential conflict of interests between firm managers and owners. …
Each year numerous surveys, reports, and analyses assess boards of directors, or BoDs. One from PwC landed about the same time as another from SquareWell Partners in the past couple of months, inviting a comparison.
PwC has surveyed CEOs and …
Board structure sits at the heart of corporate governance, but its optimal form remains a subject of debate. A longstanding view – championed by Jensen (1993) and Yermack (1996) – advocates for smaller boards, arguing they are more efficient and …