ESG, Common Ownership, and Systematic Risk: How They Intersect

By John C. Coffee, Jr. September 14, 2020 by renholding

This brief column will assert that three developments that seem unrelated are in fact closely related and may soon impact U.S. corporate governance with the force of a freight train. This column summarizes a longer article just posted by this …

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

…

How to Address Nonprofit Governance Failures

By Peter Molk and D. Daniel Sokol August 24, 2020 by renholding

Governance failures at for-profit corporations are the topic of frequent media stories, judicial opinions, and academic analyses. Nonprofit governance, however, has received significantly less attention. This lack of attention is not because nonprofits are immune from governance failures, and recent …

Changing the Guard: Improving Corporate Governance with D&O Insurer Rotations

By Andrew Verstein August 19, 2020 by renholding

Insurance companies try to detect and reduce risk. Health insurers encourage preventative care, fire insurers insist on functioning sprinklers, police insurers investigate alleged misconduct and drop departments that tolerate excessive force, and Hollywood insurers flag risky scenes as requiring stunt …

Could Social Media Give Small Investors Greater Say in Corporate Governance?

By James Ang, Charles Hsu, Di Tang and Chaopeng Wu August 5, 2020 by renholding

In a new paper, we ask whether social media could have a role in corporate governance. Prior to the advent of social media, a small shareholder faced prohibitive costs to reach other investors. For example, she would have had to …

Executive Private Misconduct

By Tom C.W. Lin August 4, 2020 by renholding

Over the last few years, misbehavior of corporate executives like Harvey Weinstein, Steve Wynn, Leslie Moonves, and Elon Musk has outraged many people around the world. The misconduct has ranged from the inadvisable to the unethical to the criminal. Almost …

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 …

The Specter of Political Bias Is Haunting Corporate Governance

By Stefan Padfield July 21, 2020 by renholding

In 1985, the Delaware Supreme Court, in Unocal Corp. v. Mesa Petroleum Co.,[1] held that the “omnipresent specter” of a conflict of interest sufficiently clouds judicial review of anti-takeover measures to require application of enhanced scrutiny. Notably, the …

Wachtell Lipton Offers Thoughts for Boards of Directors in 2020

By Martin Lipton, Steven A. Rosenblum, William Savitt, Karessa L. Cain, Hannah Clark and Bita Assad July 8, 2020 by renholding

The past six months have been marked by a profound upheaval that has accelerated the growing focus on both the purpose of the corporation and the role of the board in overseeing and leading the corporation in ways that promote …

Accounting and Convergence in Corporate Governance

By Martin Gelter July 1, 2020 by renholding

Convergence in corporate governance – the adoption by various countries of similar governance laws and practices – and whether it is even occurring have been a hot topic of debate over the past 20 years, particularly in the legal and …

Wachtell Lipton Discusses Using ESG Tools to Help Combat Systemic Racism and Injustice

By Adam O. Emmerich, David M. Silk, Sabastian V. Niles, Elina Tetelbaum and Carmen X.W. Lu June 16, 2020 by renholding

Events of recent weeks and months have starkly illuminated the effects of systemic racism and injustice on Black Americans, including threats to physical safety, psychological trauma and economic disparity. CEOs worldwide and across industries have spoken out, expressing their horror …

Wachtell Lipton on the Purpose of the Corporation

By Martin Lipton, Steven A. Rosenblum, William Savitt and Karessa L. Cain May 27, 2020 by renholding

The growing view that corporations should take into account environmental, social and governance (ESG) issues in running their businesses, and resistance from those who believe that companies should be managed solely to maximize share price, has intensified the focus on …

New Kids on the Block: The Effect of Generation X Directors on Corporate Performance

By Zhaozhao He, Mihail Miletkov and Viktoriya Staneva May 22, 2020 by renholding

Generational identity can influence many aspects of life, from family and work to political views to consumer and corporate behavior. In the United States today, there are four adult generations: Millennials (born 1982 – 2005), Generation X (born 1961 – …

Is Stakeholderism Bad for Stakeholders?

By Martin Petrin May 21, 2020 by renholding

A series of recent papers (here, here, and here, for example) have argued that maximizing shareholder value remains the proper goal of the modern corporation – and in some cases that stakeholderism is in fact harmful…

The Pandemic’s Impact on Board Oversight of Enterprise Risk

By Michael W. Peregrine April 30, 2020 by renholding

One of the most significant corporate governance implications of the pandemic may be its impact on the role and function of a board’s enterprise risk committee. From one perspective, the pandemic may increase that committee’s significance, potentially putting it on …

How Effective Start-up Governance Attracts Investors

By Mircea Epure and Martí Guasch April 24, 2020 by renholding

In a recent paper, we argue that outside investors are cautious about financing start-ups because such companies often lack a track record and tend to be managed in a less-than professional manner, with founders sometimes putting their own interests …

The Risks and Rewards of Shareholder Voting

By Bernard S. Sharfman April 23, 2020 by renholding

[Editor’s Note: This and the following piece offer a point/counterpoint on shareholder voting.] The SEC’s recently proposed rules on proxy advisers and shareholder proposals have made shareholder voting one of the most prominently debated corporate governance issues ever. In a …

The Value of Shareholder Voting

By Ken Bertsch April 23, 2020 by renholding

Recent debates have sometimes obscured the value of shareholder voting, which the Council of Institutional Investors (CII) regards as a key element in the legitimacy and functioning of the corporate governance system in the United States and elsewhere.

A factor …

Corporate Technologies and the Fallacy of Tech Nirvana

By Luca Enriques and Dirk A. Zetzsche April 13, 2020 by renholding

Time and time again, corporate scandals remind us of the importance of the mechanisms aimed to ensure that agents within corporations perform their tasks and duties in line with the long-term interests of their shareholders (and other stakeholders, as the …

Corporate Governance and the Role of Labor

By Lilian K. Ng, Man Pham and Jing Yu April 8, 2020 by renholding

Labor is an important corporate stakeholder and crucial to a company’s wealth and long-term productivity. Yet the investment of human capital in a corporation is not diversified and depends on the company’s profitability. If the corporation collapses and layoffs follow, …

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