Business Roundtable

How Policymakers Respond to CEO Activism

By Christopher Poliquin and Young Hou December 11, 2023 by renholding

CEOs are increasingly stepping into the limelight, not as business leaders but as activists. From advocating for LGBTQ+ rights to speaking out on gun control and police use-of-force, CEOs now engage on many polarizing social and political issues. Scholars have …

How Companies and the Market Respond to the Issuance of Green Bonds

By Sanjai Bhagat and Aaron Yoon July 17, 2023 by renholding

During the past decade, many corporations across the globe have issued green bonds – which are identical to traditional corporate bonds except that their proceeds are dedicated to environmental and climate-friendly corporate investments. Since they were first created in 2013, …

Wachtell Lipton Discusses Larry Fink’s Annual Letters to Investors

By Martin Lipton, Adam O. Emmerich, Kevin S. Schwartz, Sabastian V. Niles, Carmen X. W. Lu and Anna M. D'Ginto March 17, 2023 by renholding

For more than ten years, Larry Fink, Chairman and CEO of BlackRock, the world’s largest asset manager, has published separate annual letters — one to CEOs and another to BlackRock’s shareholders. This year, Fink combined the two letters into one…

The New NACD Governance Principles Promote More Engaged and Committed Boards

By Michael W. Peregrine October 21, 2022 by renholding

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 …

Purpose Proposals 

By Jill E. Fisch May 16, 2022 by renholding

The shareholder proposal has long been an effective tool for shareholders to bring emerging corporate governance issues to the attention of a company’s board of directors, its managers, and their fellow shareholders. Over time, shareholder proposals have driven a variety …

Strategic Leadership in Corporate Social Responsibility

By Rui A. Albuquerque and Luis M. B. Cabral November 29, 2021 by renholding

Why do corporations, in particular public corporations, adopt corporate social responsibility (CSR) policies? The CSR adage of “doing well by doing good” suggests that a firm can achieve higher financial returns by balancing the goals of different stakeholders. There are …

The Cost (and Unbenefit) of Conscious Capitalism

By Jitendra Aswani, Alona Bilokha, Mingying Cheng and Benjamin Cole October 6, 2021 by renholding

We examine how shareholders and other stakeholders were affected by a quasi-exogenous shock to corporate governance that began to emerge state-by-state across the United States in the 1980s. The shock came from so-called “constituency statutes,” which allow, but do not …

Wachtell Lipton Puts a Spotlight on Boards

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain and Hannah Clark September 9, 2021 by renholding

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and …

Wachtell Lipton Discusses Myths About Advances in Stakeholder Governance

By Martin Lipton and William Savitt August 25, 2021 by renholding

Two years ago, the Business Roundtable (BRT) issued a “Statement on the Purpose of a Corporation,” signed by the CEOs of 184 major U.S. corporations, that rejected shareholder primacy, declared “a fundamental commitment to all [corporate] stakeholders” and linked corporate …

Corporate Vote Suppression: The Anti-Activist Pill in The Williams Companies Stockholder Litigation

By Jeffrey N. Gordon August 19, 2021 by renholding

The Delaware Supreme Court has before it a case that could dramatically reshape corporate governance in the United States.  The case, The Williams Companies Stockholder Litigation, addresses the legitimacy of an “anti-activist pill” whose particularly aggressive features would severely …

The Financialization of Corporate Governance

By Roberta S. Karmel February 3, 2021 by renholding

Members of the academic community, the business world, and law firms have long been debating shareholder primacy, stakeholder governance, and corporate purpose. In a forthcoming essay, I outline these arguments but suggest that reform of corporate governance should be focused …

The Myth of Corporate Governance

By Stephen F. Diamond January 13, 2021 by renholding

In late 2019, somewhat surprisingly, the Business Roundtable issued a brief statement advocating “a fundamental commitment to all of our stakeholders,” thus ending its decades long singular commitment to shareholder value.

The statement triggered an intense global debate about the …

Rethinking Corporate Purpose … But Not as One Might Expect

By Paul B. Miller December 23, 2020 by renholding

Corporate purpose is having a moment, as it seems to do each generation or so. The Business Roundtable made waves last year by pivoting away from shareholder centrism in its “redefinition” of corporate purpose. Directors, officers, institutional investors, and others …

Is Stakeholder Value an Excuse for Underperfoming Managers?

By Ryan Flugum and Matthew E. Souther November 25, 2020 by renholding

In August 2019, the Business Roundtable released a statement redefining the purpose of a corporation to maximize value “for the benefit of all stakeholders – customers, employees, suppliers, communities, and shareholders.” The statement was signed by 181 CEOs, including Jamie …

Why Corporate Purpose Will Always Matter

By Lyman Johnson October 26, 2020 by renholding

Business persons and lawyers have long debated whether a business corporation does or should have a purpose other than advancing shareholder interests.  In a democratic, pluralist society, the issue of corporate purpose remains important and will not (and should not) …

Milton Friedman’s Essay and the True Purpose of the Business Corporation

By Martin Lipton September 18, 2020 by renholding

From a practical standpoint, the most significant part of the 1970 Milton Friedman essay in the New York Times was the headline: “The Social Responsibility Of Business Is to Increase its Profits.”  For a half-century, that phrase has …

SEC Commissioner Peirce Speaks on Corporate Governance

By Hester M. Peirce August 28, 2020 by renholding

We are here today to talk about excellence in corporate governance.  Before I begin, I have to remind you that the views I represent are my own and not necessarily those of the Securities and Exchange Commission or my fellow

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The False Dichotomy of Corporate Governance Platitudes

By Jeffrey M. Lipshaw August 12, 2020 by renholding

Last August, the Business Roundtable (an organization of around 200 corporate CEOs) announced it was amending its Principles of Corporate Governance to eliminate the statement that the “primary purpose” of a corporation was to serve its shareholders.  The CEOs wanted …

Wachtell Lipton Discusses the Purpose and Objective of the Corporation

By Martin Lipton, Steven A. Rosenblum, William Savitt, Karessa L. Cain, Hannah Clark and Bita Assad August 7, 2020 by renholding

As we approach the first anniversary of the Business Roundtable’s abandonment of shareholder primacy and embrace of stakeholder governance, and the fourth anniversary of our development for the World Economic Forum of The New Paradigm:  A Roadmap for an Implicit …

Wachtell Lipton Puts a Spotlight on Boards

By Martin Lipton and Carmen X.W. Lu July 23, 2020 by renholding

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and …