The Determinants and Consequences of Appointing Activist Directors

By Ian D. Gow, Sa-Pyung Sean Shin and Suraj Srinivasan February 22, 2023 by renholding

In recent years, an increasingly popular strategy among hedge fund activists has been to acquire seats on the boards of target companies. These board seats are held by what we refer to as “activist directors,” who may be affiliated with …

OECD Presents New Research on Corporate Sustainability

By Serdar Çelik, Caio de Oliveira and Adriana De La Cruz February 22, 2023 by renholding

The Organisation for Economic Co-operation and Development (OECD) has published a new report on sustainability policies and practices for corporate governance. It includes a new dataset comparing the main trends and features of corporate sustainability at the global level, …

Board Committee Charters and ESG Accountability

By Lisa M. Fairfax February 16, 2023 by renholding

Increasing corporate focus on environmental, sustainability, and governance (“ESG”) has prompted considerable criticism from across the ideological spectrum. Those who disagree with that focus – viewing it as a breach of fiduciary duty and antithetical to profit maximization – have …

The Effects of SEC Comment Letters on Compensation Contract Efficiency

By Rachel Geoffroy, Sophia Hamm and Brent Schmidt February 14, 2023 by renholding

In a new paper, we examine whether SEC comment letters on deficiencies in compensation disclosure have an impact on executive-compensation “contract efficiency,” meaning the extent to which such contracts align with shareholder interest. The goal of comment letters is not …

Is Social Justice a Corporate Scam?

By Dan Subotnik February 14, 2023 by renholding

Last December, Subaru boasted in TV ads of having donated over $250 million to charity in the last few years. The company specifically claimed that it was the ASPCA’s largest corporate donor. Animal lover that I am, I got a …

Risk-Seeking Corporate Governance

By Brian Broughman and Matthew Wansley February 13, 2023 by renholding

Several developments suggest that venture capitalists (VCs) are retreating from their traditional corporate governance role of monitoring their portfolio companies. Startup founders are retaining more equity and control over their companies, and contrary to past practice, some VCs say they …

ISS Discusses Dual-Class Share Structures in Europe

By Paul Hodgson February 13, 2023 by renholding

While unequal voting structures in the U.S. are commonly associated with technology and media companies, there is no such industry specific tendency in Europe – with its tradition of so-called “loyalty shares” and government ownership. This paper surveying dual class

…

Skadden Discusses ESG in 2022 and Predictions for 2023

By Raquel Fox, Marc S. Gerber, Aurora Luoma, Greg Norman and Simon Toms February 10, 2023 by renholding

Following another year of increasing focus on environmental, social and governance (ESG) considerations by companies, investors and regulators alike, ESG appears to have cemented its position in the corporate landscape. As set out in our 28 July 2022 client alert …

How Companies Evaluate Their Corporate Governance

By Lauren Cunningham, Christie Hayne, Terry Neal and Sarah Stein February 9, 2023 by renholding

Practitioners and academics alike debate best practices in corporate governance, but rarely do companies reveal how they determine what governance practices work best for them. In a new paper, we report the results of interviews on this topic with …

Does ESG Information Affect Individual Investors’ Portfolio Choices?

By Catharina Janz, Rainer Michael Rilke and B. Burcin Yurtoglu February 7, 2023 by renholding

Socially responsible investing (SRI) involves considering environmental, social, and governance (ESG) issues when picking stocks. Once a niche area of fund management, the volume of global sustainable investment in five major markets reached $35.3 trillion at the start of 2020, …

Mayer Brown Discusses Five Steps for Directors to Consider About Risk Governance

By Matt Bisanz, Andrew Noreuil, Jodi Simala, Bill Kucera and Megan Webster February 7, 2023 by renholding

Historically, directors have been protected from personal liability in connection with risk management by the high standard set in the seminal 1996 Caremark[1]case. In recent years, however, courts have held that certain plaintiffs have pled facts sufficient to …

Skadden Discusses Delaware Chancery Decision Questioning Fundamental SPAC Structure

By Howard L. Ellin, Edward B. Micheletti, Gregg A. Noel, Richard C. Witzel, Jr. and Sarah Runnells Martin February 3, 2023 by renholding

With all the SPAC activity and scrutiny over the past several years, it was only a matter of time before the Delaware courts had an opportunity to weigh in on SPAC stockholder litigation.

Early last year, in January 2022, Vice …

How Institutional Ownership and Board Diversity Affect Innovation

By Thi-Thanh Phan and Hai-Chin Yu February 1, 2023 by renholding

In a new paper, we investigate the relationships between institutional ownership, board diversity, and corporate innovation in U.S.-listed firms. Institutional investors play a crucial role in a firm’s operation and exert considerable influence on the efficient monitoring of innovative investment. …

The Corporate Governance Cartel

By Danielle Chaim January 31, 2023 by renholding

In recent years, major institutional investors in the U.S. have combined their efforts on environmental, social, and governance (“ESG”) matters. Large institutional investors now vote in lockstep on a variety of corporate issues, jointly lead governance initiatives, and often adopt …

Debevoise & Plimpton Discusses Delaware Chancery Decision Allowing Caremark Claim Against an Officer

By Susan Reagan Gittes, Gregory V. Gooding, Elliot Greenfield, Maeve O'Connor and William D. Regner January 31, 2023 by renholding

In a January 25, 2023 decision (In Re McDonald’s Corp. S’Holder Litig., C.A. No. 2021-0324-JTL (Del. Ch. Jan. 25, 2023)), the Delaware Court of Chancery declined to dismiss claims that a corporate officer, who led the company’s human …

Can a Greenhouse Gas Disclosure Rule Lead to Emissions Reductions?

By Sorabh Tomar January 30, 2023 by renholding

In response to growing concern about the effects of climate change, different regions of the world have adopted mandatory greenhouse gas (GHG) disclosure rules, including Australia, the European Union, and the United Kingdom. Notably, the U.S. Securities and Exchange Commission …

Cleary Gottlieb Discusses the SEC’s Disclosure Agenda and Corporate Governance

By Helena K. Grannis and Synne D. Chapman January 27, 2023 by renholding

In 2022, public companies witnessed a new kind of corporate governance activism. New rules and regulations from the Securities and Exchange Commission (the SEC) use the lever of mandated disclosure to push for corporate governance actions, and in some cases …

Sustainability, Asset Redeployability, and Board Gender Diversity

By Thunyanee Pothisarn, Pattanaporn Chatjuthamard, Pornsit Jiraporn and Suwongrat Papangkorn January 25, 2023 by renholding

A vital yet surprisingly overlooked aspect of corporate sustainability is asset redeployability. Redeployable assets are those that can be used in several ways. Assets with high redeployability promote sustainability because they can be re-assigned for various purposes as circumstances change, …

How Weakening the Fiduciary Duty of Loyalty Affects Corporate Culture

By Maggie Hu, Cheng Jiang, Kose John and Ming Ju January 24, 2023 by renholding

Corporate culture binds employees together and directs their collective behavior at work. It also has an important impact on the success of organizations. Studying the determinants of corporate culture has been difficult, however, because of its unobservable nature. In a …

A Pressing Topic for the Corporate Social Voice

By Michael W. Peregrine and Kenneth Kaufman January 20, 2023 by renholding

The frightening deficiencies in U.S. public health preparedness are an appropriate, and pressing, topic to be addressed by the recently dormant corporate social voice.

One of the central tenets of the corporate social responsibility movement is a broader perspective on …

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