Last time I flew to California, the skies were so clear that I was able to keep an eye on the changing landscape below all the way across the country. The vastness and great variety was striking. Having grown up
governance
Corporate Governance Reform in Post-Crisis Financial Firms: Two Fundamental Tensions
The manner in which financial firms are governed directly affects the stability and sustainability of both the financial sector and the “real” economy, as the financial crisis and associated regulatory reform efforts have tragically demonstrated. However, two fundamental tensions continue …
Regulation by Prosecutor
There is a quaint perspective from which the prosecutor’s role is limited to investigating crime and advocating for punishment. Of course, prosecutors serve both these functions, but the description is far too narrow to capture the work of the modern …
Cleary Gottlieb Discusses Long Term Investors’ Duty to Revive the Staggered Board
Beyond the cacophonous din of voices calling for companies to serve a “social purpose,” adopt a variety of governance proposals, achieve quarterly performance targets, and listen to (and indeed even “think like”) activists, there is now, most promisingly, a call …
Wachtell Lipton Discusses Labor Department’s Cautionary Tone on ESG-Related Matters
With shareholder proposals regarding ESG and sustainability matters becoming the most common kind of proposal, proxy advisory firm ISS marketing a new “Environmental & Social QualityScore” product for rating public companies, asset managers developing ESG-related guidelines and voting policies, and …
Debevoise Discusses the New SEC Cybersecurity Guidance
On February 21, 2018, the SEC issued new Guidance regarding cybersecurity disclosure and governance requirements applicable to SEC reporting companies. In our earlier Client Update on this topic, we discussed the disclosure considerations addressed in the Guidance. In this Client …
Stock Market Indices: Inside the Black Box
The news that a whistleblower contacted U.S. regulators last month about alleged manipulation of the Chicago Board Options Exchange Volatility Index, or VIX, highlights near universal reliance on information that stock market indices provide. While the VIX is not itself …
Protecting LLC Owners While Preserving LLC Flexibility
Limited liability companies, or LLCs, have emerged as the entity of choice for new businesses. The form attracts many everyday owners and entrepreneurs as an easy way to combine corporation-style limited liability protection with partnership-style tax treatment. LLCs also offer …
Changes in Corporate Governance: Externally Dictated vs. Organically Determined
Several major corporate scandals in the United States during the early 2000s brought attention to corporate governance of large U.S. companies. As a result, Congress passed the Sarbanes-Oxley Act (SOX), and the Securities and Exchange Commission (SEC) announced several regulations …
Financial Supervisors and RegTech: Four Roles and Four Challenges
Financial institutions and their regulators have long been early adopters of new information technologies (IT). In a short essay based on two posts for the Oxford Business Law Blog (available here and here), I first identify four uses of …
SEC Chair Clayton Talks SEC and Market Transparency
Thank you, Keith [Higgins], for that gracious introduction.[1] Let me return the sentiment. Keith – you are a member of an esteemed group of Division Directors, some of whom are here today, who have served the Commission and, most …
PwC Discusses the Fed’s New Rating System for Large Financial Institutions
On August 3, the Federal Reserve (Fed) proposed for comment a new supervisory rating system to assess the safety and soundness of Large Financial Institutions (LFIs).1 This is the first change to the Fed’s supervisory rating system since the …
PwC Discusses Fed’s New Board Expectations Guidance
On August 3, the Federal Reserve (Fed) proposed for comment supervisory guidance for boards
of directors of Fed-supervised institutions1 (i.e., Board Effectiveness (BE) guidance). The proposed BE guidance is the result of a multi-year review by the Fed of …
PwC Explains Why Fraud Governance Means More Than Just Compliance
Fraud incidents have increased by over 130 percent in the past year, resulting in significant monetary and reputational losses for financial institutions. Many of these incidents — including high-profile crimes such as the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) …
The Case Against Passive Shareholder Voting
In the past few years, investors have begun to embrace the reality that academics have been championing for decades—that a broad-based passive indexing strategy is superior to picking individual stocks or actively managed mutual funds. As a result, millions of …
Proxy Delivery Methods Show How Managers Rely on the Retail Shareholder Vote
Previous research on shareholder voting has placed most of the emphasis on the role of institutional shareholders. In our recent study, however, we provide evidence that managers strategically rely on the support offered by retail shareholders to ensure that their …
Cleary Gottlieb Offers Advice on Responding to a Social Media Attack
President Trump has repeatedly used his Twitter account to single out companies for criticism of their business practices, raising the question for a broad range of public companies of how to prepare for and potentially respond to such criticism. Of …
Corporate Governance for a Changing World: Report of a Global Roundtable Series
Between 2014 and 2016, European law firm Frank Bold and the Modern Corporation Project at Cass Business School of City, University of London, hosted a global series of roundtables on corporate governance in which we engaged with over 260 practitioners, …
Gibson Dunn discusses The End of M&A “Disclosure-Only” Settlements With Broad Releases in Delaware
On January 22, 2016, Chancellor Andre Bouchard of the Delaware Court of Chancery issued an important decision in In re Trulia, Inc. Stockholder Litigation—likely hammering the final nail in the coffin of “disclosure-only” settlements with broad releases of liability …
The Governance of Publicly Traded LLCs
The limited liability company (LLC) is not only a widespread business form for non-listed firms but also is used by listed companies. There were twenty publicly traded US LLCs in September 2013—all formed in Delaware. Two more Delaware LLCs have …