Corporate Governance and Human Capital: Evidence from SMBO Boards

By Ranko Jelic, Dan Zhou and Mike Wright April 13, 2018 by renholding

Consistent with predictions made in the late 1980s, the buyout market has grown tremendously and, together with the private equity (PE) model, has become a global phenomenon. One consequence of the maturity of the market is substantial secondary management buyout …

When the Corporation Investigates Itself

By Miriam H. Baer April 11, 2018 by renholding

There may have been a time – say, four or five decades ago – when the internal corporate investigation was viewed with suspicion, if not outright distaste. Today, however, the corporate internal investigation is the norm. Corporations investigate themselves for …

Columbia Law School to Hold 2018 M&A and Corporate Governance Conference in New York City

By Reynolds Holding April 9, 2018 by renholding

On April 20, 2018, Columbia Law School will hold its 2018 Mergers & Acquisitions and Corporate Governance Conference at Convene in midtown Manhattan. The event is co-sponsored by the law firms Gibson, Dunn & Crutcher and Wachtell, Lipton, Rosen & …

Antitrust as Corporate Governance: Why a Firm’s Mission Is to Earn No Profit

By Ramsi Woodcock March 28, 2018 by renholding

BlackRock, the vast asset manager, has been feted for demanding that the boards of its portfolio firms pursue a social purpose, which likely entails spreading corporate profits beyond shareholders to include labor and victims of environmental harm.[1] But despite …

Following the Corporate Governance Canon Pays Off for Chinese Companies

By Say Hak Goo and Bryane Michael February 19, 2018 by renholding

Over the years, a consensus on the best corporate governance practices has emerged. The OECD Guidelines of Corporate Governance epitomize a canon of such practices, including things like having non-executive shareholders on boards, having an audit committee, and following special …

Perpetual Dual-Class Stock: The Case Against Corporate Royalty

By Robert J. Jackson, Jr. February 16, 2018 by renholding

My first few weeks at the Securities and Exchange Commission have been a whirlwind—and just to be clear, I am not talking about the markets.[1] In a few short weeks, I have gotten a crash course on SEC policymaking—and

…

Corporate Governance that Works for Everyone

By Barnali Choudhury and Martin Petrin February 15, 2018 by renholding

Corporate governance has traditionally been viewed as a way to reduce agency costs between shareholders and managers in the context of private ordering. Laws and regulations pertaining to corporate governance have, therefore, typically aimed to enhance long-term wealth for shareholders.…

The Governance Implications of Business Disruption

By Michael W. Peregrine and Kenneth Kaufman January 12, 2018 by renholding

In 2018, corporate boards will increasingly be called upon to respond to how innovative competitors disrupt their companies’ business models. These competitors use technology, scale, and sharp insights into consumers to lower prices, improve products and services, and draw customers …

Corporate Governance, Tax Avoidance, and Finance Constraints

By Onur Bayar, Fariz Huseynov and Sabuhi H. Sardarli January 11, 2018 by renholding

In response to greater financial constraints and more costly external financing, firms may avoid corporate taxes to generate funds for investment. In that sense, outside investors may recognize tax management as a value-increasing activity, especially for a financially constrained firm. …

How Preliminary Examiners Could Improve Corporate Governance for Companies in Bankruptcy

By Stefan Korch December 22, 2017 by renholding

In my article Chapter 11, Corporate Governance and the Role of Examiners, I propose a possible solution to corporate governance problems caused by the debtor-in-possession model of Chapter 11 bankruptcy proceedings.

Agency and Law Enforcement Problems in Chapter 11

…

Wachtell Lipton Offers Thoughts for Boards of Directors in 2018

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Sabastian V. Niles, Vishal Chanani and Kathleen C. Iannone December 5, 2017 by renholding

As 2017 draws to a conclusion and we reflect on the evolution of corporate governance since the turn of the millennium, a recurring question percolating in boardrooms and among shareholders and other stakeholders, academics and politicians is: what’s next on …

How Banks Affect Borrowers’ Corporate Governance and Incentive Structures

By Carlo Maria Gallimberti, Richard A. Lambert and Jason J. Xiao November 14, 2017 by renholding

It is well known that banks play an important role in monitoring borrowing firms (e.g., Diamond, 1984). Yet, how banks choose among alternative mechanisms that reduce agency costs with borrowers is not completely understood. In our paper, “Bank Relations and …

Activism and Informed Trading

By John C. Coffee, Jr. November 1, 2017 by renholding

Hedge fund activism has transformed the corporate governance landscape – possibly for better, possibly for worse. But as activist funds emerge as the newest and most potent players in corporate governance, there is one certainty: New agency costs also arise. …

How to Encourage Dialogue Between Boards and Institutional Investors in the U.S. and the EU

By Giovanni Strampelli October 25, 2017 by renholding

With institutional shareholders playing a growing role in corporate governance, dialogue between boards and shareholders is increasingly common in the U.S. and Europe. Talking with boards is essential to institutional investors’ stewardship functions, and engaging with institutional investors has become …

How General Counsel Are Becoming More Essential in the C-Suite

By Michael W. Peregrine October 9, 2017 by renholding

As organizations continue to evolve and grow, so too does the role of the general counsel. Recent, diverse developments underscore how general counsel are no longer just corporate lawyers but also essential executive officers.

These developments include the emergence and …

How Nonvoting Shares Can Help Promote Efficient Corporate Governance

By Dorothy Shapiro Lund October 4, 2017 by renholding

Companies that go public with multiple classes of shares will be excluded from the major U.S. stock indexes of S&P Dow Jones Indices, the organization announced in July. A few days earlier, FTSE Russell said it would bar dual-class companies …

Another Reason Why Companies Avoid IPOs

By Bernard S. Sharfman September 29, 2017 by renholding

In a recent New York Times article, Steven Davidoff Solomon listed several possible explanations for a significant decline in the number of initial public offerings (IPOs). Among the most interesting was that there are many large and successful high-tech …

Wachtell’s Lipton Reviews the State of Play in Activism

By Martin Lipton September 21, 2017 by renholding

As we approach the start of the 2018 proxy season, developments since January 2015 prompt a brief review of the state of play.

There has been no slowdown in the U.S.; there has been a significant increase in other countries.

…

Settling the Staggered Board Debate

By Yakov Amihud, Markus M. Schmid and Steven Davidoff Solomon September 18, 2017 by renholding

There are two starkly different sides to the heated debate over staggered boards. On one are those who argue, based in part on work by Professors Lucian Bebchuk and Alma Cohen, that the staggered board is value decreasing because it …

Davis Polk Analyzes the Fed’s New Corporate Governance Guidance

By John L. Douglas, Joseph A. Hall, Thomas J. Reid, Margaret E. Tahyar and William L. Taylor September 18, 2017 by renholding

The Federal Reserve’s proposed supervisory guidance on corporate governance is a breath of fresh air that should encourage banking boards to focus on their core responsibilities and avoid blurring the distinctions between executive and non-executive duties. It is also a …

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Corporate Governance