Sky Blog
After every crisis, academics, policymakers and other observers reflect on what went wrong and what could have been done differently. This in turn leads to some reforms to laws and regulations. In the wake of widespread, multi-country corporate governance failures …
Contractarians, who believe that fiduciary relationships are a species of contract, and anti-contractarians, who believe those relationships are sui generis, have long debated what fiduciary duties are and how they should be applied. Contractarians frame the fiduciary duty as one …
A Delaware bankruptcy court has invalidated a lender’s attempt to prevent a borrower from filing bankruptcy by having the borrower amend its operating agreement to require unanimous consent among its members to file bankruptcy and then issuing one “golden share” …
Companies confer the title of “Vice President” on a wide range of employees, from senior executives, in some cases, to line-level personnel, in others. While distinguishing someone functioning as a senior executive from someone in a lower-level position may be …
In March 2016, the Nasdaq Stock Market LLC (“Nasdaq”) proposed new rules regarding disclosure of third-party compensation of directors. This third-party compensation, which may not be publicly disclosed, arises when a party other than the issuer, such as an activist …
Academics who profess expertise in corporate governance sometimes find themselves on very strange turf. That has been my status for the last two years, serving as an adviser to the U.S. Commerce Department in connection with the Obama Administration’s efforts …
On July 13, 2016, the Securities and Exchange Commission (“SEC”) adopted important amendments updating its rules of practice governing its administrative proceedings.[1] These changes concern, among other things, the timing of hearings in administrative proceedings, depositions, summary disposition, the …
Last week, news emerged that China had hacked the FDIC on several occasions during the past few years. This revelation renews concerns about the security of America’s financial institutions and comes on the heels of the third bank hacking through …
The Securities and Exchange Commission proposed Regulation Fair Disclosure (Reg FD) on December 20, 1999. The motivation behind the proposal was concern that an informational advantage provided by selective disclosures to certain market participants was resulting in a loss of …
Despite substantial judicial and public scrutiny, non-prosecution agreements (“NPA”) and deferred prosecution agreements (“DPA”) have retained their prominence as vehicles to resolve complicated corporate investigations, particularly for companies operating in regulatory environments. In the first half of this year, NPAs …
Since the Volkswagen story first broke in September 2015, most observers have just scratched their heads and muttered to themselves in amazement: “What were they thinking? How could you place ‘defeat devices’ in 11 million cars worldwide and expect that …
In Rule v. Massachusetts Mutual Life Insurance Company,[1] our client challenged MassMutual’s 2014 Proxy Statement seeking to change its company bylaws. The Proxy told the over 1 million policyholder-owners that the proposed bylaw changes were consistent with the …
The rise of shareholder activism has become a global phenomenon. Shareholder activists are not only present–as they started–in the US, but also in European and Asian Markets.[1] This situation has generated a vast literature about the desirability (or not) …
The corporate board is commonly seen as a crucial governance device that operates to both monitor corporate management and provide strategic advice. Recent corporate governance research has discovered a broad range of evidence of internal board monitoring and advisory activities; …
They say that one should not look a gift horse in the mouth. We decided to go against this proverb and look carefully in the mouth of one such gift horse. After all, we still remember from high school reading …
Because most outsiders learn about a firm from news articles written about it, firms have incentives to manage how they are covered by media so that they are presented in the most favorable light possible. Our study examines whether the …
A corporate inversion involves the relocation of a corporation’s legal domicile to a lower-tax nation (host country) while retaining its material operations in its higher-tax country of origin (home country). Corporations have been engaging in inversions for over three decades. …
There has been a recent surge in scholarship on the issue of concentration of power in the CEO, and the subsequent consequences for shareholder wealth maximization and board primacy. There is a general consensus among scholars that, in general, more …
Corporate governance scholarship has long considered the problems that arise in public companies with dispersed ownership. But the automaker Volkswagen does not suffer from a dispersed ownership structure. In fact, it has several strong and highly active owners. The Porsche …
Hedge fund activism is the latest rave in corporate governance. Activist hedge funds build stakes in target firms in order to press management for various changes. When managers are uncooperative, they may just be forced to step down. Lest you …