Sky Blog
Ethan Allen and its management prevailed a few weeks ago against an intense hedge fund activist campaign to remove its entire board of directors.
An analyst of one of our larger shareholders, the Gabelli funds, observed “I’ve never seen a …
As political spending surges toward record levels in 2016, post-Citizens United changes in the funding of American political campaigns will require directors to oversee a dramatically deregulated political environment. Corporate money will play a large role in the election, heightening …
A recent scholarly article questioning the realistic financial liability exposure of corporate directors serves to prompt a larger discussion on the broad range of risks faced by directors, and actions that can be taken to mitigate those risks.
In the …
On October 28th, the Delaware Chancery Court, in Espinoza v. Zuckerberg, et al. (“Espinoza”)[1], held that stockholder ratification of a transaction that was approved by an interested board of directors must be accomplished formally through a vote …
A trio of opinions from the Delaware Supreme Court, each authored by Chief Justice Leo E. Strine, Jr., has reaffirmed Delaware’s deference to the business judgment of disinterested corporate decision-makers and restored important protections for directors that had been weakened …
The term “corporate governance”, while now ubiquitous, was largely unknown in the U.S. until the 1970s and the rest of world until the 1990s. There has been little research done on why corporate governance rose to prominence when it did…
Companies today face increasing pressure from stakeholder groups to become more transparent and involved in addressing various economic, environmental, governance and social issues. Due to the changing corporate environment, not only are companies expected to maximize long-term shareholder value and …
On July 2, 2015, in Hill International, Inc. v. Opportunity Partners L.P., No. 305, 2015, the Delaware Supreme Court affirmed a Court of Chancery decision that Opportunity Partnership L.P. (the “Fund”), a stockholder in Hill International, Inc. (“Hill” or …
Our paper titled “The Power of Shareholder Votes: Evidence from Director Elections” aims to answer the question: Do shareholder votes matter in uncontested director elections? In principle, shareholders who own a firm should be free to pick the board members …
A recent Delaware Chancery Court decision confirms that, as the court held three years ago in Seinfeld v. Slager, there is no shareholder ratification defense for self-awarded director compensation granted under a stockholder-approved option or bonus plan that lacks …
Emerging markets are increasingly important destinations for international capital flows. Yet these markets pose important risks for investors, in addition to the business risks present in every market. For example, in some countries, many public firms are part of family …
Some legal rights and obligations are so venerated and longstanding that they have become virtual absolutes—categorical imperatives that trump other less urgent considerations. But what happens when two such absolutes collide? This was a question that the US District Court …
In a recent post, Some Lessons from DuPont-Trian, Martin Lipton identified shareholder voting in a proxy contest as a problem with hedge fund activism. According to Mr. Lipton, “ISS and major institutional investors will be responsive to and support …
On May 4, 2015, Vice Chancellor Travis Laster of the Delaware Court of Chancery issued an opinion providing a thoughtful analysis of when the creditors of an insolvent corporation have the right to bring derivative claims, such as those alleging …
We recently published a paper on lessons that for-profit and nonprofit directors can learn from one another about improving organizational governance. The full paper is available here.
For-profit and nonprofit organizations exist for different reasons: for-profits to generate a …
It has long been assumed that shareholders’ rights in the United States diminished considerably through the 20th century as a result of a competition among states to attract and retain corporations. More recently, various commentators have disputed the significance …
How does corporate law matter? My recent paper suggests that the main impact of corporate law is not in imposing sanctions, but rather in producing information. The process of litigation or regulatory investigations produces information on the behavior of defendant …
In Stewart v. Wilmington Trust (March 26, 2015), the Delaware Chancery Court characterized the outside auditor and the administrative management company for certain captive insurance companies as having a “gatekeeping role” for the companies. On that basis, the court …
To fully understand the modern corporation’s ownership, shape, and distribution of authority, one must attend to politics. Because basic dimensions of corporate organization can affect the interests of voters, because powerful concentrated interest groups seek particular outcomes that deeply affect …
Our study examines whether gender disparity exists disproportionately along the conservative and liberal geographical division. We investigate whether female board representation depends on the location of company headquarters in “red” states (which tend to vote for Republican candidates) or in …