Columbia Law School
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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
Corporate Governance
Skadden Discusses ESG in 2022 and Predictions for 2023
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
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?
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
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
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
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
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
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?
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
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
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
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
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 …
Why Passive Investors Care About Audit Quality
In recent decades, the rise of index funds (or passive investors), has caused heated debates over the efficacy of their stewardship role in corporate governance. Passive owners cannot influence the governance of a firm by selling its stock because the …
When Will Investors Vote for Socially Beneficial but Costly ESG Policies?
Investors are increasingly interested in whether firms implement environmental, social, and governance (ESG) policies that, for example, reduce the firms’ carbon footprints, diversify their workplaces, or better protect customers’ private information. Some socially beneficial policies (e.g., improving energy-efficiency) may also …
Wachtell Lipton Discusses Antitrust and ESG
As boards continue to evaluate how environmental, social and governance (“ESG”) considerations factor into corporate operations, some lawmakers and regulators have raised potential antitrust concerns about coordinated efforts. For example, several U.S. Senators sent letters to law firms admonishing them …
A Better Way to Manage Corporate Political Activism
Corporate political activism (CPA) is defined as activities that are visible to stakeholders and that support or oppose issues viewed as politically charged. Social media and press accounts suggest a growing desire among consumers, employees, and shareholders for companies to …
Making Audit Committee Disclosure More Transparent Requires Investor Feedback
The role of the audit committee in a company’s board of directors has changed significantly since the passage of the Sarbanes-Oxley Act of 2002 (SOX). Traditionally, audit committees have overseen the company’s independent auditor, the internal audit function, and other …
Latham & Watkins Discusses 10 ESG Issues to Keep Top of Mind in 2023
Both anticipated and less expected changes occurred across the ESG landscape in 2022. Anticipated changes included regulatory developments across the globe, including in the US, the UK, and the EU. Less expected changes included global and regional political shifts, such …