Columbia Law School
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Shareholders
How to Punish a Corporation
Start a conversation with a skeptic about the utility of corporate criminal law, and you soon come to an impasse: What could it possibly mean to punish a collective, fictional person? Good responses to this question have been hard to …
Why Corporate Tax Residence Is a Myth
Corporate inversions have captured the imagination of the public and the popular press as well as that of the academic community. The idea is that a little paperwork can convert a U.S. corporation (which pays tax on its worldwide income) …
Wachtell Lipton Offers Thoughts for Boards of Directors in 2018
As 2017 draws to a conclusion and we reflect on the evolution of corporate governance since the turn of the millennium, a recurring question percolating in boardrooms and among shareholders and other stakeholders, academics and politicians is: what’s next on …
It’s Time to Redefine Corporate Social Responsibility
After years of growing concern over the reach and power of multinational corporations (MNCs), there has been increasing interest in a variety of means to improve their transparency and accountability. In particular, many people have focused on the responsibility of …
Lessons from the Evolution of Corporations and Shareholder Rights in China
Although China seems to have taken far longer than Western developed nations such as the UK, the U.S., and Germany to create a modern corporate system, the imperial Qing government promulgated as early as 1904 a corporate law that included …
How Banks Affect Borrowers’ Corporate Governance and Incentive Structures
It is well known that banks play an important role in monitoring borrowing firms (e.g., Diamond, 1984). Yet, how banks choose among alternative mechanisms that reduce agency costs with borrowers is not completely understood. In our paper, “Bank Relations and …
How Executive Compensation Affects Firms’ Choice of Financing
The separation of corporate ownership from control leads to an agency problem caused by the divergent interests of shareholders (the principals) and management (the agent). One area of contention is the level of risk-taking by the firm. Managers’ investment in …
Are Investors Influenced by the Order of Information in Earnings Press Releases?
Research has begun to analyze the tone and narrative structure of earnings announcements after decades of focusing on market reactions to the earnings news itself. One conclusion from this literature is that language matters – the tone (i.e., the excess …
Wachtell Discusses How Capable and Committed Bank Boards Drive Deals and Create Value
Directors of regulated financial institutions have exceedingly difficult jobs with many demands. The aftermath of the financial crisis led to countless new regulatory requirements and expectations, many of these unwritten and evolving based on political currents or varying views at …
How State Competition for Corporate Charters Has Changed the Delaware Effect
An important feature of U.S. corporate law is regulatory competition among various states. Unlike firms in other industrialized countries, American corporations can choose to incorporate in any state, even if they do not do business there. A large body of …
Is It Time to Retire Securities Act Form S-8?
Every securities lawyer knows that offers and sales of securities must either be registered under the Securities Act of 1933 (Securities Act) or made pursuant to an applicable exemption. This rule is so fundamental that we often neglect to think …
The Case for Speeding the Merger Process
Corporate planners and practitioners know well that it takes quite a long time to close a long-form merger, with the shareholder approval requirement accounting for the bulk of the delay in almost half of such mergers. But we have not …
Corporate Governance Beyond Economics
Corporate law and governance are complex and continually changing. Yet, broadly speaking, throughout the 20th century corporate law developed with a focus on the allocation of power between shareholders and boards of directors. And, notwithstanding significant ambiguity and dissent, …
How Nonvoting Shares Can Help Promote Efficient Corporate Governance
Companies that go public with multiple classes of shares will be excluded from the major U.S. stock indexes of S&P Dow Jones Indices, the organization announced in July. A few days earlier, FTSE Russell said it would bar dual-class companies …
Opting Out of Fiduciary Duties and Liabilities in U.S. and U.K. Business Entities
The degree to which business participants ought to be free to limit or eliminate fiduciary duties and associated liabilities remains a hotly contested matter in many jurisdictions. In a new chapter forthcoming in Edward Elgar’s Research Handbook on Fiduciary Law…
The Corporate Governance of National Security
A central goal of corporate law is to make managers accountable to shareholders. So it may come as a surprise that America’s federal government frequently compels companies to “effectively exclude the Shareholder from . . . influence over the Corporation’s …
Dow Jones Erred By Going Nuclear on Dual-Class Shares
In July 2017, Dow Jones, goaded by the reaction to Snapchat having gone public with a class of shares without voting rights, announced that, after extensive consultation, it had decided to henceforth eliminate companies with dual-class shares from its …
Shareholders Deserve Right to Choose Mandatory Arbitration
On July 17, SEC Commissioner Michael Piwowar extended an important invitation to U.S. public companies. “For shareholder lawsuits,” Piwowar offered, “companies can come to [the SEC] to ask for relief to put… mandatory arbitration into their charters.” To some, this …
Law and Corporate Governance
Few research topics over the last two decades have proven as alluring and elusive as corporate governance. Its allure is self-evident: Since the turn of the 21st century, a growing number of pundits, commentators, and scholars have argued that high …