Sky Blog
A board of directors performs essential strategic and oversight roles that maximize the value of the shareholders’ residual claim. However, despite careful selection of board members, too often boards neither reach their full potential nor perform their necessary governance obligations. …
In a new article, I discuss how investment advisers like Blackrock, State Street, and Vanguard, can become adequately informed prior to voting their proxies without having to read massive amounts of information about the hundreds or thousands of companies …
There is substantial debate about the role of outside (i.e., non-employee) directors in enhancing corporate governance. Most of the research on this topic has focused on public corporations, which are required by law to have adequate representation of outside directors …
In a recent study, we examine whether a director’s “diversity” explains two employment outcomes: being retained on the board and being promoted to board leadership positions. We define diversity as the director’s dissimilarity to the other members of the board …
Regardless of industry, size or performance, no company should consider itself immune from hedge fund activism. No company is too large, too popular, too new or too successful. Even companies that are respected industry leaders and have outperformed the market …
Activist campaigns are on the rise on both sides of the Atlantic. Even large-cap companies are increasingly targeted by activists—particularly hedge funds—with remarkable success. A big reason for that success is the support that activist proposals attract from traditional institutions, …
Board Was Required to Disclose the Chairman’s Reasons for Abstaining From a Board Vote on the Sale of the Company
On February 20, 2018, the Delaware Supreme Court reversed dismissal of a shareholder action alleging that the board of directors …
Just as the Mamas & the Papas pioneered the folk-rock scene of the 1960s as one of the first truly gender diverse music group, their native state of California is breaking ground for increased board gender diversity in the United …
In recent years, it has become increasingly evident that the activism-driven corporate world is relatively fragile and is proving to be unsustainable, particularly when viewed in the broader context of rapidly changing political and social norms and increasing divisiveness across …
While director independence has become a topic of global importance, the definition of independence and the role of independent directors remain unsettled, depending largely on ownership patterns, industry structure, and regulatory goals. The main agency problem in diffusely owned firms …
The ever-evolving challenges facing corporate boards prompt an updated snapshot of what is expected from the board of directors of a major public company—not just the legal rules, but also the aspirational “best practices” that have come to have equivalent …
The debate over board leadership does not seem to go away especially in the U.S. where market participants have long agreed on the need for greater independence in principle, while largely disagreeing on the measures required to put it into …
A recent decision of the Delaware Court of Chancery highlights the need for boards of directors of Delaware publicly traded companies to develop heightened awareness and vigilance in responding to shareholder activists, particularly those following a short-term agenda of putting …
On October 23, 2018, the Division of Corporation Finance of the Securities and Exchange Commission (the SEC) issued new Staff Legal Bulletin 14J[1], following up on previous bulletins clarifying issues arising under Exchange Act Rule 14a-8. The new …
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 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 …
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 …
Issuers, investors, and regulators are paying increasing attention to corporate sustainability. Commentators have proffered a variety of explanations for this attention ranging from the argument that corporations are morally obligated to act in a socially responsible manner to the claim …
The manner in which financial firms are governed directly affects the stability and sustainability of both the financial sector and the “real” economy, as the financial crisis and associated regulatory reform efforts have tragically demonstrated. However, two fundamental tensions continue …