Sky Blog
The structure of dual-class stock, where one class of shares confers more votes per share than the other, creates a gap (“wedge”) between voting rights and cash flow rights that allows insiders to raise capital without relinquishing effective control of …
Over the past 30 years, private equity firms and hedge funds have reshaped the landscape of corporate ownership. By 2022, firms under private equity management employed over 11 million people, nearly 10 percent of the U.S. workforce, while, in 2021, …
The Federal Deposit Insurance Corporation (FDIC) has proposed enforceable guidelines on corporate governance and risk management that would apply to all state non-member banks with assets greater than $10 billion (the Proposed FDIC Guidelines). The proposal was issued over two …
Four score and twelve years ago, Adolf Berle and Merrick Dodd debated the fundamental role of corporations within society. We have engaged in that debate ever since. In a nation conceived in liberty and dedicated to the proposition that all …
A ground-breaking study provides new data about diversity on the boards of directors of 3,031 companies (representing 2,503 U.S. and 528 foreign firms) listed on the NASDAQ stock exchange.
The demographic information in the study is based on voluntary self-identification …
In a new essay, I examine public company wrongdoing by focusing on securities fraud.
In general, there are two main reasons why companies commit wrongful acts. The first is that managers have incentives to further their own interests. They may …
There have been dozens – and probably hundreds – of client alerts, briefs, white papers and other thought leadership pieces on the California bills awaiting signature that will require greenhouse gas emissions (SB 253) and climate risk (SB 261) disclosures. …
Robo-voting occurs when an investment fund mechanically follows the voting recommendations of its proxy adviser in corporate elections. The practice has become easier for funds with the development of online voting platforms that a proxy adviser can complete in advance …
In a significant corporate governance development, the National Association of Corporate Directors (“NACD”) has released a new report addressing the important role that culture plays in promoting effective governance discourse.
NACD describes the report as a “call to action” for …
Corporations have a history of using deceptive tactics to enhance their public image on environmental compliance while advancing their profit-focused objectives. This phenomenon began in the late 1980s, along with the rise of environmental consciousness. A new generation of environmentally …
A while ago, the National Center for Public Policy Research – a conservative organization that focuses its advocacy in the corporate and securities space – filed a lawsuit against Starbucks, arguing that its diversity equity and inclusion program ran
The U.S. Supreme Court’s historic ruling on affirmative action is limited to college admissions and not directly applicable to private employers. But the June 29, 2023, decision has already emboldened those who are seeking to challenge private sector diversity, equity …
In a recent post on the Harvard Law School Forum on Corporate Governance, three partners at Skadden, Arps, Slate, Meagher & Flom LLP give practical advice to companies in preparing for and responding to a short attack. With respect …
In corporate governance circles, the clash between the different philosophies of shareholder primacy and stakeholderism rages on. In a recent article in the Columbia Law Review, Professor Aneil Kovvali challenged what he calls the “stark choice hypothesis,” which suggests …
Delaware General Corporation Law § 220 permits shareholders to inspect a corporation’s books and records for a proper purpose, such as investigating managerial misconduct, valuing shares, or communicating with other shareholders. The Delaware case law interpreting this statute has created …
Over the past four decades, the share of U.S. public firms held by institutional investors who concurrently invest in other firms within the same industry – common ownership – has increased fivefold. While some argue that common ownership has anticompetitive …
On June 6, 2023, the Public Company Accounting Oversight Board (PCAOB), the nonprofit corporation established by Congress to oversee the audit of public companies, proposed new auditing standards designed to further its “investor-protection mandate.”[1]These standards, if adopted, would …
Companies’ diversity and inclusion (D&I) practices have attracted widespread attention and support from investors, policymakers, and the public. Yet while they may advance social justice, these practices’ impact on a company’s operations remains unclear.
Conventional wisdom is that a diverse …
When assessing the legality of actions by boards of directors, corporate officers, and shareholders, judges use five standards of review: the business judgment rule, Unocal, Revlon, the entire fairness standard, and, to some degree, Blasius.[1]
These …
With (minority) shares now concentrated in the hands of a relatively small number of institutions, institutional investors are expected to play an ever-increasing role in the governance of listed companies worldwide. However, it is uncertain whether institutional investors can actually …