Sky Blog
Corporate governance scholars to date have focused almost exclusively on the economic impact of corporate control – specifically the diversion and creation of wealth by controlling shareholders (commonly referred to as “tunneling” and “idiosyncratic vision,” respectively). Analysis of the distinctive …
On March 7, 2017, the eve of International Women’s Day, State Street Global Advisors initiated its “Fearless Girl” campaign, an effort to increase the number of female directors on the boards of its portfolio companies.[1]According to State Street, …
From employee protection to consumer safety, risk management is a central daily duty of corporate management and has become top of the oversight agenda for corporate boards. While managers remain in charge of day-to-day risk management, the board’s oversight role …
In the corporate law community, we too often claim that good corporate governance is a competitive advantage. But what is the social-science evidence for that claim?
We warn clients about Caremark and other sources of liability for poor corporate governance. …
The tremendous growth of institutional investors, particularly large passive funds, has drawn attention to their role in corporate governance. Major investment advisers such as BlackRock, Vanguard, and State Street are among the largest shareholders in many publicly traded firms and …
As institutional investors grow in size and influence, questions arise as to whether they are effective stewards for equity investors. That the three mutual fund families with the most total net assets each holds equity positions in around 5,000 U.S. …
A public company’s certificate of incorporation generally grants the board of directors authority to issue “blank check” preferred stock up to the number authorized in the certificate of incorporation, on terms to be determined by the board. Recently, a number …
Under the pressure of institutional investors, environmental groups, employees, consumers and other stakeholders, many companies have sought to demonstrate their bona fides when it comes to ESG through disclosure about their sustainability efforts, goals and achievements, whether in periodic reports …
How do firms allocate their spending on philanthropic causes or other socially beneficial activities? With 94 percent of large U.S. companies committed to charitable giving and some investors increasingly willing to forego financial returns to advance such activities, this is …
Water means life. More than half of our bodies consist of water, and it is an indispensable resource for production of food and other goods. It is fundamental for societies and ecosystems alike. While water covers approximately 70% of our …
How much – and why – do individual investors value ESG-related activities of firms? In a new working paper, we shed light on these questions by studying how retail investors transact in their personal portfolios around a primary source …
In a recent paper, we examine the economic impacts of a new Texas law to throw light on whether the often-heated political debate over environmental, social, and governance (ESG) issues is empty political rhetoric or a reflection of substantive policy …
Investors are increasingly concerned about a company’s social and environmental impact, but that impact is not as easily assessed as the company’s financial performance, which can be summarized by its “bottom line” (net income) or its stock return. To help …
The recent controversy involving public speech at Stanford Law School suggests an appropriate, and pressing, topic to be addressed by the corporate social voice. Consistent with recent practice, corporations can serve their stakeholders by using the Stanford example to promote …
In a new article, we identify a subtle and unrecognized shift in Caremark[1] cases that changes how the Caremark doctrine actually works. Caremark claims, which accuse corporate directors of breaching the fiduciary duty of loyalty by not making a …
Since the international Paris Agreement on climate change was adopted in 2015, there has been a massive upsurge in corporate net zero pledges. In our new article, we explored the climate commitments of large Australian companies. We wanted to …
The rationale behind a number of recent EU legislation changes focusing on corporate governance has been to prioritise a long-term focus on governance through various transparency measures as well as some concrete requirements for action, and on allowing shareholders and …
Poison pills are one of the most powerful deterrents to hostile takeovers, making a takeover so unattractive and expensive that a potential acquirer declines to pursue it. A pill typically works by triggering the issuance of new shares to “old” …
In a potentially precedent-setting case, 11 directors of global energy company Shell Plc (formerly Royal Dutch Shell Plc) [1] are being sued in their personal capacity over the company’s energy transition strategy. The claim, which has been filed in the …
For more than ten years, Larry Fink, Chairman and CEO of BlackRock, the world’s largest asset manager, has published separate annual letters — one to CEOs and another to BlackRock’s shareholders. This year, Fink combined the two letters into one…