Sky Blog
Environmental, Social, and Governance (ESG) activity at real-world firms is largely about disagreements among shareholders over optimal corporate decisions and not about conflicts between shareholders (as a group) and stakeholders (e.g., customers, suppliers, and employees) who have transactional or contractual …
I remember that day in 2006 at my OECD office in Paris when a colleague told me he had received a call from the Saudi government. The gentleman on the other end of the line had been inquiring about circuit-breaker …
Corporate governance research has historically focused on agency costs (imposed by professional managers) or principal-principal expropriation (imposed by dominant shareholders). We seek to reverse this theoretical focus on private benefits of control, and its preoccupation with the principal/shareholder and agent/manager …
In recent years, scholars and other observers have expressed starkly different understandings of the political landscape of corporate America. While the conventional wisdom has cast large American businesses as a conservative stronghold, others have reached the opposite conclusion, arguing that …
Firms’ green claims have become ubiquitous in recent years. Products are “recycled” or “responsibly sourced,” financial instruments are “green” or “ESG,” firms promise to become “carbon neutral” or “net-zero,” and so on. But can the recipients of such claims assess …
Taking into account – and even seeking to influence –Environmental, Social and Governance (ESG) factors in investments in private assets has become significantly more common in recent years. However, the way in which investors can and should think about these …
In recent years, Environmental, Social, and Governance (ESG) metrics have become important factors in determining executive compensation as companies, investors, and regulators aim to align executives’ interests with broader societal goals. But are these metrics effective in generating incentives for …
A great deal of space has been devoted by the media to discussions relating to the pay of Elon Musk, CEO of Tesla. The media outrage centers around his 2018 pay package, with many of the headlines reporting a whopping …
Last week, California Governor Gavin Newsom signed into law Senate Bill 219, which applies broadly to public and private companies “doing business” in California. The law will require companies that have total annual revenues of over $1 billion dollars …
The standard explanation for the division along party lines on the role of ESG in corporate governance is this: Liberals think ESG factors are important in investment and business decisions. Conservatives think ESG is a harmful distraction, presumably because corporate …
In 2020, the Nasdaq stock market filed a proposal with the U.S. Securities and Exchange Commission seeking permission to adopt a board diversity-related disclosure requirement for its listed companies. In 2021, the SEC approved the proposal, making Nasdaq the most …
In corporate governance, the focus is increasingly shifting toward non-financial stakeholders, particularly employees, as important contributors to a firm’s competitive advantage and long-term success. Historically, investment in labor has been a big topic in corporate finance, especially within agency theory. …
It appears a new item must soon be added to the list of life’s certainties: “death, taxes and the CTA.”
Effective January 1, 2024, the Corporate Transparency Act (“CTA”) requires many entities to report information about their beneficial owners, senior …
The relationship between directors’ fiduciary duties and shareholder wealth maximization under Delaware law has long been a prickly topic. Some commentators argue the relationship is merely a default capable of adjustment through private ordering.[1] Others, pointing to cases like …
Private firms are the backbone of our economies, influencing everything from investment levels to job creation to market competition. Given their collective significance, various regulatory agencies outside the U.S. impose financial disclosure (and sometimes audit) requirements on these firms. In …
It is well-known that equity is a central part of corporate law, and courts do not hesitate to remind litigants of that fact. Yet, a fuller appreciation of what equity means for corporate law is still lacking. In a recent …
The 2024 proxy season was characterized by a high volume of shareholder proposals submitted to companies, including proposals relating to topical issues such as artificial intelligence (“AI”) and political lobbying and spending. In addition, the number of no-action requests submitted …
Since the 1990s, regulatory reforms worldwide have significantly increased the independence of corporate boards. By 2023, nearly all of the top 50 equity markets had implemented minimum requirements for board or board committee independence. While extensive literature highlights the benefits …
The Criminal Division is on the front lines of the Justice Department’s efforts to hold culpable individuals and companies accountable for corporate crime. We also develop innovative policies both to encourage companies to be good corporate citizens and to enhance …
On August 28, 2024, the Financial Crimes Enforcement Network (FinCEN) issued a final rule to add “investment adviser” to the definition of “financial institution” under the regulations implementing the Bank Secrecy Act (BSA). The final rule defines the term “investment …