Shareholder Primacy and Basketball

By David H. Webber December 2, 2022 by renholding

I recently participated in a festschrift for retired justice (and noted stakeholderist) Leo E. Strine, Jr., hosted by the University of Pennsylvania Journal of Law and Business. Justice Strine’s interventions in the debate over shareholder primacy have added heft, pragmatism, …

Corporate Governance Beyond the Shareholder and Stakeholder Models

By Dirk Schoenmaker Willem Schramade and Jaap W. Winter November 7, 2022 by renholding

In a new paper, we compare the main models of corporate governance (Schoenmaker, Schramade and Winter, 2022). One is the stakeholder model, which recognizes that companies have responsibilities to society that are broader than just making a profit. A problem …

How Corporate Managers Think about Forward-Looking Guidance

By Andrew C. Call, Paul Hribar, Douglas J. Skinner and David Volant October 17, 2022 by renholding

Headlines during earnings season often focus on the forward-looking guidance corporate managers provide. Yet, questions remain about managers’ perceptions of the guidance process and the tradeoffs they face in deciding whether and what to guide. To gain greater insight, we …

Green Pills

By John Armour, Luca Enriques and Thom Wetzer September 7, 2022 by renholding

Many of the world’s largest firms have recently announced their intention to reduce carbon emissions over the coming decades. The financial sector claims to have mobilized over $130 trillion in support of the net zero transition, and 33 percent of …

How Private Shareholder Engagements on Material ESG Issues Affect Companies

By Rob Bauer, Jeroen Derwall and Colin Tissen August 8, 2022 by renholding

Shareholders have increasingly taken the lead in pushing for corporate sustainability. In 2021, for example, 20 percent of U.S. environmental and social shareholder proposals won over 50 percent of shareholder support, while in 2016 only 3 percent of such proposals …

ISS Discusses Securities Class-Action Settlements in First Half of 2022

By Jeff Lubitz July 18, 2022 by renholding

The value of U.S. shareholder class action settlements in the first half of 2022 totaled $2.32 billion, the exact amount as the same period in 2021. However, the quantity of settlements in the first six months of the year increased

…

Paul Hastings Discusses Japanese Poison Pills Without Shareholders’ Blessing

By Toshiyuki Arai July 8, 2022 by renholding

In many jurisdictions, poison pills are devised and implemented by the board of directors without shareholders being involved. Since the 2007 Supreme Court case^[1] (in re Bulldog Sauce) in Japan, however, courts have largely relied on the …

Rolling Back Dodd-Frank: Investors’ and Banks’ Responses to Financial Market Deregulation

By Michael H.R. Erkens and Ying Gan June 29, 2022 by renholding

In the wake of the 2007-2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Dodd-Frank created a new financial regulatory landscape with intensified federal oversight and an extensive set of regulations on banks, …

The Unsung Upside of Share Repurchases

By Richard A. Booth June 15, 2022 by renholding

Stock repurchases by issuing corporations have always been controversial. But they have become even more so recently because of the perception that the excess funds used to finance buybacks have come from tax cuts and other sources (such as government …

Public Corporations’ Bylaws as Standard Form Contracts

By Eli Bukspan May 13, 2022 by renholding

Vast corporate growth over more than a century has weakened shareholder voting rights, as highlighted by, among other things, the rise of dual-voting stock IPOs. The extent of that growth, and the lack of people’s power to negotiate with …

Stakeholder Capitalism as ESG-Constrained Shareholder Capitalism

By Peter H. Huang March 11, 2022 by renholding

Intense debates are alive and well on the nature and meaning of corporate purpose and corporate personhood. In a new paper, I analyze proposals by the U.S. Securities Exchange Commission to require that all reporting companies make periodic, mandatory …

SPACs and PIPEs as Efficient Tools for Corporate Growth

By Frank Fagan and Saul Levmore March 8, 2022 by renholding

A SPAC can be understood as an alternative to an IPO, with investors using a large investor, a PIPE, to find out whether the SPAC founder has really chosen a good target or is simply rushing to get a big …

ISS Discusses Shareholder Class Actions Related to Covid-19

By Jeff Lubitz February 21, 2022 by renholding

As the world completes a full two years of navigating the perils of the Coronavirus pandemic, U.S. shareholders continue to file class action complaints alleging companies with various acts of fraud related to COVID-19.

As previously reported by ISS Securities

…

ISS Discusses Proposed Shareholder Class-Action Against ING Groep

By Elisa Mendoza February 16, 2022 by renholding

ING Groep N.V. – a company that offers banking services to private clients, small businesses, large corporations, financial institutions, and governments worldwide – is at the epicenter of a proposed shareholder class action. Investors are looking to remediate the significant

…

Skadden Discusses Waiver of Appraisal Rights Upheld by Split Delaware Supreme Court

By Arthur R. Bookout, Peyton V. Carper and Eric M. Holleran January 3, 2022 by renholding

In Manti Holdings, LLC v. Authentix Acquisition Co., Inc., the Delaware Supreme Court affirmed the Court of Chancery’s decision to enforce a waiver of appraisal rights included in a stockholders agreement executed by “sophisticated parties” who owned 100% of the …

Mandatory vs. Voluntary ESG Disclosure, Efficiency, and Real Effects

By Cyrus Aghamolla and Byeong-Je An December 8, 2021 by renholding

In recent years, several countries have imposed disclosure requirements on public firms for environmental, social, and governance (ESG) performance. These mandates have also been accompanied by the European Union’s wide-reaching Non-Financial Reporting Directive, effective in 2018 (Directive 2014/95/EU). Similar legislative …

Rewiring Corporate Law for an Interconnected World

By Luca Enriques and Alessandro Romano November 18, 2021 by renholding

The traditional view of corporate law can be summarized as follows. Shareholders have a single well-defined objective, namely “to maximize the net present value of the firm’s earnings per dollar invested” (Hansmann, 283). Managing companies in the interest …

The Cost (and Unbenefit) of Conscious Capitalism

By Jitendra Aswani, Alona Bilokha, Mingying Cheng and Benjamin Cole October 6, 2021 by renholding

We examine how shareholders and other stakeholders were affected by a quasi-exogenous shock to corporate governance that began to emerge state-by-state across the United States in the 1980s. The shock came from so-called “constituency statutes,” which allow, but do not …

Comparative Corporate Governance

By Afra Afsharipour and Martin Gelter August 16, 2021 by renholding

With the increasing internationalization of law and legal scholarship, comparative corporate governance has seen a burgeoning volume of research from a practical, theoretical, and empirical perspective. Practically speaking, both internationally and within individual countries, most corporate governance research deals with …

Corporate Governance, the Depth of Altruism, and the Polyphony of Voice

By Jeffrey N. Gordon July 27, 2021 by renholding

This post responds to the paper, Exit vs. Voice, by Eleonora Broccardo, Oliver Hart, and Luigi Zingales (BHZ),^[1] a deep engagement with the choice between alternative means by which an “altruistic” investor can influence corporate behavior. An “altruistic” investor …

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