Sky Blog
Large firms today are rarely organized as a single legal entity, but rather as corporate groups with numerous subsidiaries that have separate legal personalities. A debate has long raged over how to treat the legal boundaries between companies belonging to …
The January 2023 study “ESG Performance and Enterprise Value: Do Firms with Stronger ESG Performance Have Higher Valuation Ratios?” investigated the relationship between the ISS ESG Performance Score (a normalized version of the ISS ESG Corporate Rating) and two …
On May 1, 2023, the Delaware Court of Chancery addressed an unsettled question under Delaware law—whether a fully informed, uncoerced vote of disinterested stockholders (so-called “Corwin cleansing”[1]) can be applied to defeat claims to enjoin defensive measures …
Global supply chains (GSCs) have become increasingly complex and fragmented over the last few decades due to advances in transportation and production technology, economic globalization, and the emergence of multinational corporations (MNCs). Despite their benefits, GSCs present significant risks of …
The importance of environmental, social, and corporate governance (ESG) is on the rise, with legislators, regulators, and non-governmental actors around the world creating laws and standards on ESG. Though most of the action has occurred in Europe, ESG is gaining …
It is a common refrain, mostly on the political right, that considering environmental, social, and governance (“ESG”) factors when investing is probably illegal.[1] The basis for this argument derives from the fiduciary duty of loyalty and its corollary, the …
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 …