Sky Blog
In a recent paper, we use the law protecting directors and officers of Nevada-incorporated firms from liability to study how such laws relate to corporate tax avoidance. Under the 1987 law, those directors and officers are liable only if …
Stock repurchases are popular. Between January 2009 and 2018, S&P 500 firms spent $4.3 trillion to buy back their shares, which is significantly more than these firms spent on dividend payments to their shareholders (Lazonick, Sakinç, and Hopkins, 2020). Stock …
Much of the vast literature on corporate governance focuses on internal issues, such as board characteristics. Yet external governance – the market for corporate control, often known as the takeover market – is critical to determining how well a company …
Directors, officers and other fiduciaries (together, “fiduciaries”) owe two primary duties to a corporation and its shareholders: the duty of loyalty and the duty of care. The duty of loyalty requires that fiduciaries make business judgments in the honest and …
According to conventional wisdom, climate mitigation by governmental regulation should target the reduction of greenhouse gas emissions. Indeed, corporations and industries, including their products and supply chains, are the main source of greenhouse gas emissions, which cause global warming and …
Awareness of the cultural dimension of diversity in corporate boards has been on the rise. Directors’ cultural values can affect how effective corporate boards are in advising and monitoring managers and, ultimately, how well a firm performs. At the same …
Should private social media companies have a free hand in deciding what content to allow on their platforms? Governments from the European Union to India to the U.S. states of Texas and Florida are increasingly answering no, as they seek …
Public versus private status is a common point of differentiation among companies and can determine, for example, how they are regulated and who can invest in them. Yet many private companies increasingly resemble their public counterparts. This blurring of the …
On September 6, 2022, in Construction Industry Laborers Pension Fund on behalf of SolarWinds Corporation, et al. v. Mike Bingle, et al. (“SolarWinds”),[1] the Delaware Chancery Court granted a motion to dismiss a derivative suit against directors …
The basic goals of executive compensation have changed little since the advent of large corporations in the late 19thcentury: Provide strong incentives to increase shareholder value, retain key talent, and limit shareholder cost. The literature of compensation consultants …
Algorithmic trading (AT) is one of the most notable financial innovations in several decades and constitutes a substantial portion of recent trading in stock markets. However, evidence on the economic consequences of AT is mixed. On one hand, prior research …
What is stock market short-termism? It’s important to know the boundaries between stock market short-termism and other economic ills, because in public discourse many social and economic woes are mistakenly attributed to stock market myopia. But when we mistakenly categorize …
Corporate law – and fiduciary law in general – has struggled with how to handle loyalty duties that are harmful to society. For example, a director’s act of loyalty to shareholders that harms the environment, or a director’s effort to …
The independence of corporate boards is a serious concern to shareholders and regulators. The influence CEOs have over director appointments accentuates this concern. It is not uncommon to see CEOs appointing directors with personal or business ties (e.g., relatives, friends, …
Many of the world’s largest firms have recently announced their intention to reduce carbon emissions over the coming decades. The financial sector claims to have mobilized over $130 trillion in support of the net zero transition, and 33 percent of …
The SEC rule requiring a universal proxy card in director election proxy fights becomes effective today [September 1]. The resurgence of activism is already in progress, and the universal proxy card may significantly facilitate some proxy contests in which an …
Since 2020, new retail investors have flooded the securities markets, opening a record number of new brokerage accounts. Due to the ease of investing through commission-free trading apps and the ability to purchase fractional shares, a broader segment of the …
More shareholder resolutions were filed in the 2022 proxy season than in the previous year, with approximately 932 environmental, social, and governance shareholder proposals submitted at U.S. companies so far, compared to 903 proposals submitted in 2021, according to ISS …
Why should corporate managers comply with international law? International agreements, customary international law, and non-binding recommendations are sources of norms that, if adopted, could address many of the harms that corporations create for society and the planet.
Corporations are increasingly …
Activist hedge funds will soon likely have greater leverage in proxy contests, thanks to a new rule from the Securities and Exchange Commission. But will that benefit shareholders who care about long-term value? Our study suggests that it will – …