Sky Blog
As a capital allocation decision, share buybacks intersect all three of the main corporate finance activities of investing, financing, and dividends[1]. Buybacks continue to be very divisive, evoking comments like “derangement syndrome” by Cliff Asness, “economic illiterates” by …
In a recent post on the Harvard Law School Forum on Corporate Governance, three partners at Skadden, Arps, Slate, Meagher & Flom LLP give practical advice to companies in preparing for and responding to a short attack. With respect …
The debate over short-term thinking at corporations has so far focused largely on companies in the U.S. and the UK. The fact that controlling shareholders are less common in those countries than in many others may explain why the extensive …
Knowledge spillovers between firms are a key driver of important economic phenomena such as technological progress (Griliches, 1979), growth in international trade (Grossman and Helpman, 1991), and industrial innovation (Bloom, Schankerman, and Van Reenen, 2013). Although prior research has examined …
The importance of environmental, social, and corporate governance (ESG) is on the rise, with legislators, regulators, and non-governmental actors around the world creating laws and standards on ESG. Though most of the action has occurred in Europe, ESG is gaining …
From employee protection to consumer safety, risk management is a central daily duty of corporate management and has become top of the oversight agenda for corporate boards. While managers remain in charge of day-to-day risk management, the board’s oversight role …
Plaintiff stockholder litigation against announced M&A deals continues to be a common feature of the U.S. M&A landscape, despite the prevalence of forum selection bylaws, the demise of disclosure only settlements and general skepticism by the Delaware courts. Over the …
Financial theory suggests that a firm with strong corporate governance (e.g., an effective board of directors), keeps a CEO exactly as long as is optimal for the firm. When the firm’s board and other corporate governance mechanisms are ineffective, however, …
In recent years, an increasingly popular strategy among hedge fund activists has been to acquire seats on the boards of target companies. These board seats are held by what we refer to as “activist directors,” who may be affiliated with …
The frightening deficiencies in U.S. public health preparedness are an appropriate, and pressing, topic to be addressed by the recently dormant corporate social voice.
One of the central tenets of the corporate social responsibility movement is a broader perspective on …
While the world recovers from the worst of the pandemic, the economic, political and social repercussions will continue to play out in ways that, while unpredictable, are in some respects characterized by observable patterns of cause-and-effect and cyclicality. The pendulum …
Board-shareholder engagement plays an important role in corporate governance. In the last decade, investors have increasingly influenced business decisions, and their activities have extended beyond the formal submission of shareholder resolutions for voting at annual meetings. On their part, directors …
The new report by the National Association of Corporate Directors (“NACD”), A Framework for Governing into the Future (the “NACD Report”), is a valuable contribution to corporate governance discourse. Among its primary offerings are a forward-looking perspective on governance and …
Military strategy and takeover strategy share a few things in common. At some point, generals and M&A lawyers each must recognize that the old technology no longer works as it did in the past and can no longer dominate the …
The economic benefits of corporate social responsibility (CSR) and workplace gender diversity are areas of growing interest for business leaders and regulators. Research shows that socially responsible activities enhance firm value while irresponsible social activities destroy value and that firms …
Boards are regularly called upon to guide management teams in answering the age-old strategic question: build or buy? But the already complex business calculus has become increasingly complicated in the past several years because of stepped up scrutiny of mergers …
The independence of corporate boards is a serious concern to shareholders and regulators. The influence CEOs have over director appointments accentuates this concern. It is not uncommon to see CEOs appointing directors with personal or business ties (e.g., relatives, friends, …
Many of the world’s largest firms have recently announced their intention to reduce carbon emissions over the coming decades. The financial sector claims to have mobilized over $130 trillion in support of the net zero transition, and 33 percent of …
Activist hedge funds will soon likely have greater leverage in proxy contests, thanks to a new rule from the Securities and Exchange Commission. But will that benefit shareholders who care about long-term value? Our study suggests that it will – …
If a U.S. firm is a takeover target, it is almost entirely up to its board to decide whether to offer resistance, i.e., to formally reject a specific bid, and potentially take financial or operational actions to defend against the …