Toward a Dynamic View of Corporate Purpose

By Dorothy S. Lund January 9, 2024 by renholding

What is the purpose of the corporation in society? Whose interests are corporate managers supposed to advance? How can corporate law and governance best promote social welfare? For the past 50 years, most scholars and business leaders would have answered …

Dual-Class IPOs Offer Solution to Unicorn Governance Failure

By Ofer Eldar December 18, 2023 by renholding

Dual-class stock structures have proliferated in recent years. In 2017-2019, almost 30 percent of IPOs in the U.S. had a dual-class structure, and most of them were founder-controlled technology firms (Aggarwal, Eldar, Hochberg and Litov, 2020). Their increasing popularity has …

How Board Diversity Compares in Private and Public Firms

By Johan Cassel, James Weston and Emmanuel Yimfor December 14, 2023 by renholding

In today’s rapidly evolving corporate landscape, the composition of boards is not just a matter of compliance or social responsibility; it’s a strategic imperative that shapes the future of firms. Amidst growing public scrutiny and socio-economic shifts, particularly following the …

Is It the End of Entire Fairness as We Know It?

By Kyle Wagner Compton, Lauren Murphy Pringle and Justin Morse December 12, 2023 by renholding

Striving to better, oft we mar what’s well — William Shakespeare, King Lear (1606)

The Delaware Court of Chancery has, for more than a century, honed unparalleled expertise in a unique body of corporate law based on equity – and …

How Policymakers Respond to CEO Activism

By Christopher Poliquin and Young Hou December 11, 2023 by renholding

CEOs are increasingly stepping into the limelight, not as business leaders but as activists. From advocating for LGBTQ+ rights to speaking out on gun control and police use-of-force, CEOs now engage on many polarizing social and political issues. Scholars have …

Delaware Vice Chancellor Travis Laster Says Bill Barr Could Use Some Help on Delaware Law

By Travis Laster December 7, 2023 by renholding

The universe regularly provides reminders to remain humble, including reminders that having expertise in one area does not make you an expert in adjacent areas. Former Attorney General Bill Barr recently provided one of those reminders with his opinion column

…

How It Matters Who Makes Corporate Rules

By Jonathan Chan and Ernest Lim December 5, 2023 by renholding

When it comes to corporate law and governance, substantially similar rules can be implemented and enforced by a wide range of entities. For example, regulatory agencies, legislatures, stock exchanges, and private bodies have all issued rules on climate-related risk disclosure,…

Have CEOs Changed?

By Yann Decressin, Steven N. Kaplan and Morten Sorensen November 29, 2023 by renholding

In recent years, as corporate ESG (Environmental, Social and Governance) goals have gained prominence and so-called “Millennials” and “GenZers” have entered the workforce, a sense has emerged in the media and among some academics that CEOs and other top executives …

Will Systematic Stewardship Save the Planet?

By Zohar Goshen and Assaf Hamdani November 28, 2023 by renholding

The convergence of environmental urgency and the rising power of “universal owners” – asset managers with broad-based portfolios, such as BlackRock – has kindled the hope among academics and activists that universal owners will leverage their power to push companies …

What Many Financial Economists Misunderstand About Divestment Campaigns

By Emilio Marti, Martin Fuchs, Mark R. DesJardine, Rieneke Slager and Jean-Pascal Gond November 27, 2023 by renholding

Sustainable investing is becoming a hot topic in financial economics. However, when it comes to the impact of divestment campaigns and related tactics on promoting sustainable investing, financial economists miss an important point. Many assume that shareholders can create impact …

Columbia Law School to Hold 2023 Conference on M&A and Corporate Governance

By Reynolds Holding November 27, 2023 by renholding

On December 8, 2023, Columbia Law School will hold its 2023 Conference on Mergers & Acquisitions and Corporate Governance. The event is co-sponsored by the school’s Ira M. Millstein Center for Global Markets and Corporate Ownership, the Columbia Law School …

Do Private or Public Firms Invest More Efficiently?

By Pantelis Kazakis, Woon Sau Leung and Steven Ongena November 20, 2023 by renholding

In a new paper, we examine the differences between private and public firms to see whether one outshines the other when it comes to investment efficiency. Our analysis begins with three theories.

The Agency Theory: Although going public offers …

Making Sense of Multi-Metric Vesting Schemes for Executive Compensation

By Francesca Franco and Oktay Urcan November 10, 2023 by renholding

In the ever-evolving world of corporate governance, executive compensation packages are increasingly tied to specific performance metrics and goals. The leading forces behind this trend are institutional investors, major shareholders, and influential proxy advisers such as Institutional Shareholder Services and …

ISS Discusses Where ESG Performance Matters Most for Company Valuation

By Loic Graindorge, Karsten Greye, Roberto Lampl, Gavin Thomson, Casey Lea and Disha Malara November 9, 2023 by renholding

The January 2023 report 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 …

Addressing Climate Change Requires Creating Utilities With Purpose

By Joel B. Eisen and Heather E. Payne October 31, 2023 by renholding

Environment, social, and governance (ESG) reporting has become a mainstay of corporate and investment decision-making. Corporations are increasingly making ESG disclosures to assess and limit risks, bolster their reputations, and attract and keep customers. In a new paper, we focus …

Debevoise & Plimpton Discusses Fifth Circuit Decision to Uphold Nasdaq Board Diversity Rule

By Matthew E. Kaplan, William D. Regner, Simone S. Hicks, Ashley Yoon and Andrew Hong October 31, 2023 by renholding

On October 18, 2023, the Fifth Circuit, in Alliance for Fair Board Recruitment v. SEC, upheld Nasdaq’s board diversity rule. [1]

The rule, approved by the Securities and Exchange Commission in August 2021, requires Nasdaq-listed companies to disclose board-level …

Debevoise Discusses Proposed FDIC Guidelines for Corporate Governance and Risk Management

By Gregory Lyons, Caroline Novogrod Swett, Courtney Bradford Pike, Tejas Dave and Tara Holzer October 30, 2023 by renholding

On October 11, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) published in the Federal Register for comment a notice of proposed rulemaking to establish new guidelines (the “Proposed Guidelines”) for governance and risk management at FDIC-supervised insured depository institutions …

Big Three (Dis)Engagements

By Dhruv Aggarwal, Lubomir Litov and Shivaram Rajgopal October 24, 2023 by renholding

Large asset managers play an outsized role in the corporate governance of the largest U.S. public firms. The Big Three (BlackRock, Vanguard, and State Street) collectively manage trillions of dollars of assets and own about a fifth of the average …

Does “Wedge” Size in Dual-Class Firms Matter?

By Rimona Palas, Dov Solomon, Dalit Gafni and Ido Baum October 19, 2023 by renholding

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 …

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