Columbia Law School
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Corporate Governance
How Institutional Investor Objectives Affect Firm Valuation and Governance
Over the last 30 years, institutional investors have dramatically increased their stakes in U.S. companies. In the 1980s, they held approximately 20 percent to 30 percent of the average firm in the U.S. By 2010, they held over 65 percent. …
Making Sense of Corporate Governance in U.S. Firms
Corporate governance has become even more important since the collapse of major firms in the 1990s and the global financial crisis of 2007-2008, and the relationship between financial reporting and the capital markets is a big reason why. The debate …
Sullivan & Cromwell Reviews and Analyzes 2016 U.S. Shareholder Activism
Shareholder activism remains a major force in corporate decision-making in 2016 but is increasingly operating in an environment of robust, multi-faceted shareholder engagement, particularly at large companies. The time and effort that companies and institutional investors have spent developing a …
Corporate Culture: Evidence from the Field
Why do some firms generate great wealth for investors and offer innovative solutions to problems, while seemingly similar firms are much less successful? Why do employees at some firms repeatedly act unethically, shocking their leaders with scandals, while seemingly similar …
Fool’s Gold? Equity Compensation and the Mature Startup
The Silicon Valley ecosystem has changed profoundly since the dizzying heights of the dot-com era. Consider two of that era’s iconic companies: Yahoo! and eBay. At the time of their IPOs, both of these companies were mere infants by today’s …
Does CEO Succession Planning Matter?
In September 2009, Bank of America CEO Ken Lewis suddenly announced his intention to retire by the end of the year. The company’s board was taken by surprise as it scrambled to find a successor and was further embarrassed as …
Gibson Dunn Discusses Proxy Advisers’ 2017 Voting Guidelines
The two most influential proxy advisory firms–Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis)–recently released their updated proxy voting guidelines for 2017. The key changes to the ISS and Glass Lewis policies are described below along with …
Staggered Boards and Long-Term Firm Value, Revisited
For a long time, the academic literature has largely supported the view that staggered boards — which require challengers to win at least two election cycles to gain a board majority — entrench directors and managers to the detriment of …
An Efficient Investment-Risk Model of Compliance
Corporate compliance — the internal processes that firms use to ensure that their employees do not violate applicable laws and regulations — has become big business. Regulation of business continues to grow, punctuated by landmark laws that have re-shaped the …
Sullivan & Cromwell Discusses Hacking and Cyber Threats to Director Communications
The growth in cybersecurity threats combined with the increasing demands placed on outside directors create challenges that often go beyond the risks that public companies face from employee and client communications. If public companies cannot communicate quickly with directors or …
Why Public Benefit Corporations?
Of all the social and economic challenges to the current state of Delaware corporate law, perhaps the most potentially revolutionary is the shift in attitudes about the very purpose of corporations. Delaware corporate law holds as a core precept that …
Weil, Gotshal Discusses Universal Proxy Cards in a Trump Administration
On October 26, 2016 the U.S. Securities and Exchange Commission proposed proxy rule amendments that would require, in a contested election of directors, the public company and the shareholder activist to each use a “universal” proxy card – i.e., a …
What Corporate Law’s Emphasis on the Long Term Might Mean
To read influential corporate lawyers, legal academics, and jurists, shareholders are an alarmingly myopic bunch who demand that corporate directors and managers make short-term decisions that sacrifice long-term value. The group receiving the most scolding of late is hedge fund …
Shareholder Activism in the Era of Trump: What Strategy Works?
Ropes & Gray Discusses Recent Proxy Access Developments
To date, nearly 300 companies have adopted proxy access bylaws, including over 40 percent of S&P 500 companies. Given the widespread adoption of proxy access by large U.S. companies, it was only a matter of time before a shareholder actually …
Director Networks and Credit Ratings
In the aftermath of the most recent financial crisis, credit rating agencies (CRAs) once again received a portion of the blame. Similar to the negative CRA attention that followed the Asian Financial Crisis in 1997 and the dot.com bubble of …
Corporate Governance for a Changing World: Report of a Global Roundtable Series
Between 2014 and 2016, European law firm Frank Bold and the Modern Corporation Project at Cass Business School of City, University of London, hosted a global series of roundtables on corporate governance in which we engaged with over 260 practitioners, …
Enterprise Without Entities
Scholars and practitioners of the law generally agree that any large enterprise must be run through a legal entity such as a corporation. Entities reduce transaction costs to coordinate an enterprise’s many patrons, limit liability for shareholders, and protect a …
A Comparative Analysis of Dual Class Share Structures
The efficiency of dual class share structures is controversial, and whether to allow them is a difficult choice. Though much has been written about this topic, no comprehensive picture of dual class structures’ governance effects has emerged.
Although dual class …