Sky Blog
In a new article, we aim to identify the elements and stages that have led to increased attention to corporate social responsibility issues, especially with regard to environmental, social, and governance factors, and to focus on the meaning of each …
In a recent article[1] I explore the history of the law of corporate purpose, a subject recently highlighted by the Business Roundtable’s “Statement of the Purpose of a Corporation.” This August 19 statement was signed by more than 180 …
This year, each of the major index fund managers, the Business Roundtable, the British Academy, the UK Financial Reporting Council, the World Economic Forum and a number of other organizations (both governmental and nongovernmental) announced that they did not support …
Importantly, the Business Roundtable (an influential group of almost 200 CEOs of America’s most influential companies) issued a “Statement on the Purpose of a Corporation,” which has intensified a developing focus on the social …
Tying executive pay to corporate performance has become increasingly important in creating incentives for corporate managers. Theoretical models argue that compensation contracts that reward managers contingent on performance, especially performance relative to peer firms, can increase managerial effort (e.g., Holmstrom, …
Dual class capital structures have spread exponentially in recent years across much of the corporate world, as has previously been reported on this blog. Dual class listed companies today account for around $4 trillion of US total stock market value …
Blockchain-based information storage, retrieval, and tracking have the potential to be more immediate, transparent, and credible means of business recordkeeping than alternatives involving a centralized point of control.[1] As a result it should be unsurprising that corporations have begun …
Corporate boards may wish to adopt a plan of action in response to two recent Delaware decisions suggesting a shift in application of the historically director-friendly Caremark[1] standard for board oversight of a company’s compliance systems. Such a plan …
In hindsight, 2019 may come to be viewed as a watershed year in the evolution of corporate governance. After years of growing alarm about endemic short-termism, the sustainability and competitiveness of businesses over a long-term horizon, and the role of …
Both Glass, Lewis & Co. (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”), the leading providers of corporate governance and proxy advisory services, have now published their 2020 proxy voting guidelines. The Glass Lewis guidelines[1] will take effect for …
The European Union has become more active in addressing EU common foreign and security policy (“CFSP”) objectives with the help of what it calls “restrictive measures,” i.e., EU Financial and Economic sanctions. As indicated in our recent client …
Two recent Delaware decisions may give ammunition to stockholder plaintiffs seeking to assert claims against directors under a Caremark theory for failing to comply with their oversight obligations. The decisions—Marchand v. Barnhill (“Blue Bell”) and In re …
Auditors play a major role in corporate governance and capital markets. They facilitate firms’ access to financing by creating trust among public investors with efforts to prevent misbehavior and financial fraud by corporate insiders. In order to fulfill these goals, …
A recent decision by the Delaware Supreme Court, In re Investors Bancorp, Inc. Stockholder Litigation (“Investors Bancorp”), increased the risk of litigation against directors, bucking a decades-long trend. The decision reversed a Chancery Court …
Following Corwin v. KKR Financial Holdings and other Delaware cases that have reinforced the standards that stockholder suits must meet to survive dismissal, would-be litigants have increasingly invoked Section 220 of the Delaware General Corporate Law (“Section 220”) to try …
In a recent paper, we use new and proprietary micro-data from company-ratings site Glassdoor for the period between 2008 and 2016 to investigate changes in employees’ perception of firms and managers during periods of financial misconduct and after the public …
This post lays out a new approach to shareholder voting designed to increase the voting power of long-term committed shareholders: adding votes to shares based on both long holding periods and high concentrations. Called quality voting, the approach would …
Class action reform could take a lesson from U.S. public company governance, I argue in a new working paper, available here.
Class actions and public companies have a lot in common. Class action scholars routinely explain problems in class …
Breach of the duty of oversight claims against Delaware directors are known as “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.”[1] The plaintiff must successfully argue that the directors …
Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis recently announced updates to their U.S. proxy voting policies for the 2020 proxy season. ISS’s new policies will apply to shareholder meetings held on or after February 1, 2020 and …