Sky Blog
While external whistleblowing—reporting misconduct to regulators or members of the media— has captured much attention, the impact of reporting misconduct anonymously to management, known as internal whistleblowing, is relatively unknown. Our new study, Evidence on the Use and Efficacy of …
We are constantly reminded of the urgency to act as we witness the impact of climate-related events on peoples’ lives and their communities around the world.
The signing of the Paris Climate Agreement in 2016 was a watershed moment as …
On October 18, Institutional Shareholder Services Inc. (“ISS”) announced that the comment period for its 2019 benchmark voting policy is open until 5:00 PM ET on November 1, 2018. For U.S. companies, ISS is soliciting comments on proposed changes relating …
Public pension funds have great influence over corporate governance because of the size and nature of their portfolios: They manage more than $3 trillion in assets and often invest in a large number of companies. Besides largely unobservable private negotiations, …
Our new academic study examines the long-term effects of interventions by activist hedge funds. Prior studies document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that activism is beneficial to shareholders. We challenge and …
Auditors issue going concern opinions when they have substantial doubts about a client’s ability to continue as a going concern for one year beyond the financial statement date. Abundant anecdotal evidence shows that companies that received these opinions went through …
According to the Securities and Exchange Commission (SEC) release establishing the Proxy Voting Rule, an investment adviser “is a fiduciary that owes each of its clients duties of care and loyalty with respect to all services undertaken on the client’s …
Institutional owners have traditionally been thought of as passive investors that have little concern for or influence on corporate policies and decisions. In contrast, recent literature shows that while many institutions are passive in terms of their investment choices and …
The process of replacing key individuals is crucial to organizations’ performance. This is as true for presidents of countries as it is for CEOs. When a firm announces the departure of a CEO without announcing a successor, the incumbent CEO …
On September 30, 2018, only hours before the deadline, California Gov. Jerry Brown signed bill SB 826, making his state the first in the U.S. to adopt board gender quotas for public companies.
The law requires listed companies headquartered in …
As we approach the 2019 proxy season, developments since September 2017 prompt a brief updated review of the state of play.
On September 30, 2018, Governor Brown of California signed into law a bill, SB-826, to require female representation on the boards of directors of publicly traded companies who identify as being headquartered in the state. SB-826 makes California the first …
As private equity funds approach the end of their lives, a fund’s general partner is often encouraged by the fund’s limited partners and third-party buyers to consider secondary liquidity solutions. Liquidity solutions can involve fund extensions, asset sales to third-party …
The Delaware courts have recently rendered a series of decisions, culminating with the Delaware Supreme Court’s December 2017 holding in In re Investors Bancorp, Inc. Stockholder Litigation, No. 169 (Del. 2017) (“Bancorp”), limiting the extent to which the business judgment …
Related party transactions (RPTs) involve the transfer of resources, services, or obligations between a reporting company under the Securities Exchange Act and a related party (SFAS 57; IAS 24). Some of the highest profile accounting scandals, such as the ones …
Proponents of shareholder voting argue that restricting it would reduce the ability of shareholders to hold management accountable. The implication of this argument is that mandating equal voting rights for all shares will benefit shareholders. However, the evidence as to …
Elon Musk came close to doing something truly unique. No, not his electric car. Rather, he was about to roll the dice with his shareholders’ equity.
Securities analysts estimate that somewhere between 25 and 35 percent of the value of …
On September 18, 2018, Institutional Shareholder Services (ISS) released the results of the first half of its Annual Policy Survey. The Annual Policy Survey is designed to gather feedback from stakeholders, including institutional investors, companies, corporate directors and other market …
Corporate social responsibility (CSR) is defined as “actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (McWilliams and Siegel, 2001). According to this definition, CSR activities not only …