Sky Blog
We investigate whether the use of humor during public earnings conference calls influences the content and outcomes of the calls. Earnings releases are key events for corporations and the investors and analysts who follow them. In conjunction with the earnings …
In the 2019 proxy season, “overboarding” became a center-stage issue for many companies and investors. Several large asset managers, including Vanguard, BlackRock, and LGIM, enhanced their voting guidelines to apply stricter criteria, while some directors serving on multiple public company …
Mutual funds own approximately 30 percent of the U.S. equity market, and the Big Three fund families – Blackrock, Vanguard, and State Street – are the largest blockholders in the vast majority of large, publicly traded companies. This has made …
In a recent article, I develop a theory of the corporation as a legal entity based upon the foundation of property law, which I call a “property theory of corporate law.” This theory, unlike the contractarian perspective on the corporation, …
Critics of the shareholder-primacy model assert that it is flawed because it encourages managers to adopt a myopic view of profit generation that forgoes necessary investment and creates externalities borne by society. These critics argue that greater attention should be …
Companies are more concerned with the #MeToo movement than they used to be. Why this is the case is obvious, but much about the topic is not clear. What does this concern lead companies to do? What should this concern …
In a recent article, we seek to shed light on several important aspects of measuring and providing data about companies’ performance on environmental, social, and governance (ESG) issues. The article is intended to provide a useful guide for the …
Corporations worldwide are increasingly integrating corporate social responsibility (CSR) into their operations and emphasizing ethical, safe, and sustainable business practices. Also, anecdotal evidence suggests that many of these corporations are concerned about not only their own CSR standards but also …
At the general meeting of Tesla Inc. on June 11, 2019, two management proposals seeking to introduce shareholder-friendly changes to the company’s governance structure failed to pass, despite both items receiving support by more than 99.5 percent of votes cast …
The media, investors, and regulators often consider trading by corporate insiders to be a signal of firm value, given that insiders know their business better than do others. Although trading on material, non-public information can be illegal in the U.S., …
Bank behavior and how it relates to bank fragility and systemic risk have been in the spotlight since the 2007-2009 financial crisis. Regulators claim that bankers’ compensation structures played a role in encouraging behavior which contributed to the financial crisis. …
The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a major public company—not just the legal rules, or the principles published by institutional investors and various corporate …
Corporate leaders may wish to revisit the important yet sensitive topic of reporting relationships in compliance programs following the release of new guidance from the Department of Justice’s Criminal Division.
That guidance, entitled Evaluation of Corporate Compliance Programs[1], …
Private ordering has become a common way to restructure key aspects of public corporation governance. Stockholder activists and boards of directors alike are testing the bounds of the freedom to contract in the charter and bylaws, adopting provisions aimed at …
Law is a reflection of society, and corporate law is no exception. As we wrestle with broader questions around social justice, (very real) environmental risks, and the proper balancing of our long term societal goals, the proverbial corporate pendulum continues …
In a new paper, we analyze the major disconnect between the theory of corporate governance, its legal expression, and the reality of corporate ownership structures, based on an “indirect holding system” (IHS), which has evolved from complex existing technological …
Initial public offerings of companies with dual-class shares have made headlines in recent years. An increasing number of newly listed companies have introduced classes of stock with superior voting rights, which typically allow company founders and top executives to maintain …
Notwithstanding the attention corporate reputation gets as a concept, why it is valued, what it requires, and what is incompatible with a good reputation are given surprisingly short shrift. Institutional investors are increasingly pressuring companies to care about more than …
The general public can be a stakeholder in a firm, even when it does not have direct ownership. And as the public becomes more vested in a firm’s actions, the firm may be more likely to engage in corporate social …
Shareholder activism is growing in popularity across the world and appears to deliver mostly benign results for firms and stockholders. However, testing the effects of activism is problematic. For at least 30 years, researchers have recognized the difficulty of causal …