Sky Blog
In determining how much to pay their CEOs, U.S. companies typically use “benchmarking,” setting compensation at or above the median of what peer firms pay their CEOs. This practice is designed to enable firms to retain talented CEOs and to …
In recent years, one of the most significant developments in corporate governance has been the adoption and expansion of voting choice programs by the largest institutional investors. Such changes have come in response to growing scrutiny and pressure from asset …
In recent years, boards of directors have confronted a strategic dilemma: whether to appoint specialized directors or engage external consultants to advise them on various aspects of their business. This decision has significant implications for a board’s accountability, the application …
Does the rise of artificially intelligent corporations threaten the integrity and legitimacy of democracy? This question looms large as the 2024 presidential election approaches. A growing number of academics, business leaders, and politicians warn that unchecked development and dissemination of …
Yesterday’s news that Tesla’s chief executive, Elon Musk, asked a supplier to redirect scarce chips needed for artificial-intelligence development from Tesla to other Musk-owned companies followed reports that Donald Trump is considering Musk for a role in a new administration. …
Classified boards of directors (BoD) remain one of the sorest of sore spots about portfolio companies. Investors complain about them endlessly. Proxy advisors loathe them. Shareholder proposals to de-classify tend to succeed.
Sure, many new IPOs and de-SPAC companies start …
Since the global financial crisis of 2007-2008, the corporate finance markets have been dramatically transformed. Most notable has been the rise of non-traditional providers of debt finance such as private credit funds, which now aggressively compete with traditional finance providers …
Independent directors were originally conceived as guardians of shareholder interests who could safeguard a corporate board’s ability to check management’s power. They have since become a marquee feature of modern corporate governance. What, though, makes a director independent? Scholars, regulators, …
For decades, advocates of “shareholder primacy” as the North Star of corporate governance have steered our leading corporations and our Nation’s economic engine perilously off-course. Since the 1970s, when the work of Milton Friedman, Michael Jensen, and Frank …
Corporate boards will be called upon to renew their oversight of corporate compliance following the recent announcement of several new corporate fraud enforcement initiatives by the U.S. Department of Justice (DOJ). Most notably, these include a new whistleblower program and …
What relevance does international law have for corporate governance? Why should corporate executives pay attention to it? The short answer is because their stakeholders do. In two separate articles, I explore the ways in which corporate stakeholders – including consumers, …
In a new book chapter I evaluate contemporary corporate law, especially Delaware corporate law, from a classical liberal perspective—i.e., the view of politics and economics that derives from the English and Scottish Enlightenment, underlies the American founding, and has been …
Active and retired top executives are prime candidates for outside director positions. Conventional wisdom suggests that these individuals’ experience equips them to serve effectively as monitors and advisers to management. Nevertheless, the business press has revealed that some executives remain …
What is the purpose of the corporation in society? Whose interests are corporate managers supposed to advance? How can corporate law and governance best promote social welfare? For the past 50 years, most scholars and business leaders would have answered …
When it comes to corporate law and governance, substantially similar rules can be implemented and enforced by a wide range of entities. For example, regulatory agencies, legislatures, stock exchanges, and private bodies have all issued rules on climate-related risk disclosure,…
On October 11, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) published in the Federal Register for comment a notice of proposed rulemaking to establish new guidelines (the “Proposed Guidelines”) for governance and risk management at FDIC-supervised insured depository institutions …
Large asset managers play an outsized role in the corporate governance of the largest U.S. public firms. The Big Three (BlackRock, Vanguard, and State Street) collectively manage trillions of dollars of assets and own about a fifth of the average …
The Federal Deposit Insurance Corporation (FDIC) has proposed enforceable guidelines on corporate governance and risk management that would apply to all state non-member banks with assets greater than $10 billion (the Proposed FDIC Guidelines). The proposal was issued over two …
Four score and twelve years ago, Adolf Berle and Merrick Dodd debated the fundamental role of corporations within society. We have engaged in that debate ever since. In a nation conceived in liberty and dedicated to the proposition that all …