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Should the Modern Corporation Maximize Shareholder Value?

By Sanjai Bhagat and R. Glenn Hubbard May 18, 2020 by renholding

Fifty years ago this year, Milton Friedman, later to be a Nobel laureate in economics, famously argued that corporate governance should focus solely on shareholder value maximization, while conforming to applicable laws and regulations. That view was controversial then. After …

Wachtell Lipton on Lessons From the Future – The First Contested Virtual Annual Meeting

By Igor Kirman, Sabastian V. Niles, Oliver J. Board, Natalie S.Y. Wong and Loren Oumarova May 14, 2020 by renholding

The 2020 proxy season has been anything but routine, with the COVID-19 pandemic and the resulting state shelter-in-place orders requiring many companies to make the shift from physical to virtual annual meetings, and state corporate laws being amended to allow …

More Than Meets the Eye: Reassessing the Empirical Evidence on U.S. Dual-Class Stock

By Bobby V. Reddy May 12, 2020 by renholding

Since Google (now Alphabet) issued dual-class stock at its IPO in 2004, the subject has been vigorously debated throughout the world. Unlike firms whose shares all have equal voting rights (“one-share, one-vote firms”), companies with dual-class stock allow a founder …

How Corporate and Securities Laws Affect Social Responsibility and Corporate Purpose

By Thomas Lee Hazen May 8, 2020 by renholding

For nearly 90 years, scholars have debated whether the sole purpose of the business corporation is to maximize profits. This debate has been reframed over the past 50 years and now seems to have settled on a middle ground: Corporate …

Davis Polk Discusses Reductions in Executive Pay Due to Covid-19

By Kyoko Takahashi Lin and David Mollo-Christensen May 8, 2020 by renholding

The coronavirus (COVID-19) pandemic and the ensuing market uncertainty, as well as recently enacted legislation, have upended the compensation and benefit programs of many companies. This is the fifth memorandum in a series of client memoranda that we are preparing …

Why Delaware Dominates Incorporations and the Creation of Other Forms of Business

By Peter Molk May 6, 2020 by renholding

Delaware’s success in attracting corporate formations is well known, but explanations for it vary. In a recent paper, I test these explanations as well as the reasons for Delaware’s success in attracting other types of business formation I find evidence …

Debevoise Discusses Private Equity Options in Face of Liquidity Crunch

By Andrew Rearick, Andrew Ahern, Gavin Anderson, Katherine Ashton and Ezra Borut May 6, 2020 by hdh2120

As significant economic sectors grind to a halt around the world due to coronavirus-related lockdowns and travel restrictions, many portfolio companies will face liquidity crunches, raising concerns for private equity fund managers and their investors. Uncertainty around the duration and …

Nuveen Previews 2020 Proxy Season: Environmental and Social Practices

By Nuveen Responsible Investing Team May 1, 2020 by renholding

Companies recognize the importance of environmental and social (E&S) factors and are giving consideration to a broader group of stakeholders to help mitigate risk. However, new regulations bring uncertainty to the future of environmental, social and governance (ESG) proposals.

The …

Why Proxy Advice Might Be Slanted

By John G. Matsusaka and Chong Shu April 30, 2020 by renholding

In the last two decades, the proxy advice market has consolidated into two companies that some believe control as much as 97 percent of that market, leaving little diversity in available advice. The companies, ISS and Glass Lewis, are opaque …

The Pandemic’s Impact on Board Oversight of Enterprise Risk

By Michael W. Peregrine April 30, 2020 by renholding

One of the most significant corporate governance implications of the pandemic may be its impact on the role and function of a board’s enterprise risk committee. From one perspective, the pandemic may increase that committee’s significance, potentially putting it on …

Should Corporations Have a Purpose?

By Jill E. Fisch and Steven Davidoff Solomon April 29, 2020 by renholding

Purpose is currently one of the hottest topics in corporate governance. Commentators are demanding not only that corporations formally articulate a purpose, but that the corporate purpose embrace the interests of non-shareholder stakeholders or society more generally. In August 2019, …

Columbia’s Program in the Law and Economics of Capital Markets Anticipates Hiring a Post-Doctoral Research Fellow

By Merritt B. Fox April 27, 2020 by renholding

Columbia Law School and Columbia Business School’s Program in the Law and Economics of Capital Markets is seeking a full-time Capital Markets Research Fellow. The appointment is anticipated to run from July 1, 2020, to June 30, 2022.

This position …

How Effective Start-up Governance Attracts Investors

By Mircea Epure and Martí Guasch April 24, 2020 by renholding

In a recent paper, we argue that outside investors are cautious about financing start-ups because such companies often lack a track record and tend to be managed in a less-than professional manner, with founders sometimes putting their own interests …

The Risks and Rewards of Shareholder Voting

By Bernard S. Sharfman April 23, 2020 by renholding

[Editor’s Note: This and the following piece offer a point/counterpoint on shareholder voting.] The SEC’s recently proposed rules on proxy advisers and shareholder proposals have made shareholder voting one of the most prominently debated corporate governance issues ever. In a …

The Value of Shareholder Voting

By Ken Bertsch April 23, 2020 by renholding

Recent debates have sometimes obscured the value of shareholder voting, which the Council of Institutional Investors (CII) regards as a key element in the legitimacy and functioning of the corporate governance system in the United States and elsewhere.

A factor …

Columbia Law Professors Write Two of Top Corporate and Securities Articles

By Reynolds Holding April 22, 2020 by renholding

John C. Coffee, Jr., Zohar Goshen, and Joshua R. Mitts were among the authors of two of the best corporate and securities articles last year, the Corporate Practice Commentator has announced. The Columbia Law School professors were joined by Robert

…

How Committed Are Active-Investment Managers to ESG?

By Soohun Kim and Aaron S. Yoon April 21, 2020 by renholding

Using environmental, social, and governance (ESG) factors to evaluate investments in companies has in recent years become increasingly popular and controversial. One of the most notable and influential initiatives for ESG investing is the United Nations Principles for Responsible Investment …

Wachtell Lipton Discusses UK and EU Regulators’ Latest Moves on ESG

By David M. Silk, David A. Katz, Sabastian V. Niles, Carmen X. W. Lu and Ram Sachs April 16, 2020 by renholding

Amid the ongoing push for standardized, comparable and decision-useful ESG disclosures, regulators in the United Kingdom and the European Union have proposed additional disclosures and benchmarks to promote sustainable economic activity. The United Kingdom’s Financial Conduct Authority (FCA) has published …

Exequity Offers a Framework for Discretion in Executive Incentive Plans

By Chad Mitchell April 15, 2020 by renholding

The impact of COVID-19 on business has been profound and sudden. Strategic plans, business forecasts, and operating budgets set before the current crisis are likely to bear no semblance to plans that might be set today. Moreover, plans set today …

Conference Board Discusses Areas for Board Attention During Pandemic

By Matteo Tonello and Paul Washington April 14, 2020 by renholding

Just as with the financial crisis of 2008, corporate boards of directors are facing the combination of increased responsibility, scrutiny, and uncertainty as their companies grapple with the COVID-19 pandemic.

In the wake of the Great Recession, The Conference Board …

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