The Hidden Cost of Going Public: Why Employees Become Less Happy After IPOs

By Meng Li and Jedson Pinto October 8, 2025 by renholding

Going public represents a milestone in corporate evolution, opening doors to capital markets and enabling expansion. Yet what if this achievement comes with hidden costs for the people who work at these companies? Our recent analysis of millions of Glassdoor …

How Co-Opted Boards Lead to Anti-Takeover Provisions – and Weaker Governance

By Mohammad Dulal Miah, Rashedul Hasan and Sabur Mollah July 18, 2025 by renholding

In a new paper, we explore the relationship between co-opted directors and firms’ anti-takeover provision (ATPs). We argue that the relationship can be viewed through traditional agency theory, which highlights the potential conflict of interests between firm managers and owners. …

Unflexed Muscle: SEC Enforcement of CEO and CFO SOX Certifications

By Marc I. Steinberg and A.B. Steinberg March 27, 2025 by renholding

In a new article, we focus on the Securities and Exchange Commission’s enforcement of the CEO and CFO certification requirement pursuant to the Sarbanes-Oxley Act (SOX). The article analyzes the appropriate interpretation of the statute’s reach, the SEC enforcement proceedings …

Does Being Ethical Pay for Firms?

By Saurabh Ahluwalia, Linda Ferrell, O.C. Ferrell and Priyank Gandhi April 19, 2024 by renholding

Most businesses follow an explicit or implicit code of conduct that guides their operations, their relations with the public, and their treatment of customers, employees, and other stakeholders. These rules often go beyond what is legally required, and businesses often …

Ropes & Gray Discusses Supreme Court Ruling on SOX Retaliation Claims

By Greg Demers, Doug Brayley, Brendan Kearney and Jack Shaffery March 5, 2024 by renholding

Plaintiffs bringing retaliation claims under the Sarbanes-Oxley Act do not have to prove their employers’ “retaliatory intent,” only that their whistleblowing activity contributed to their termination, according to a recent ruling by the U.S. Supreme Court. In a unanimous opinion …

Do Meritless Whistleblower Claims Hurt Companies and Shareholders?

By Yangyang Fan, Gilles Hilary and Mark (Shuai) Ma November 7, 2023 by renholding

A number of regulations encourage whistleblowers to provide tips on corporate financial misconduct. For example, as a part of the 2011 Dodd-Frank Act, Congress enacted a whistleblower program to reward eligible individuals with up to 30 percent of the monetary …

How Institutional Ownership and Board Diversity Affect Innovation

By Thi-Thanh Phan and Hai-Chin Yu February 1, 2023 by renholding

In a new paper, we investigate the relationships between institutional ownership, board diversity, and corporate innovation in U.S.-listed firms. Institutional investors play a crucial role in a firm’s operation and exert considerable influence on the efficient monitoring of innovative investment. …

Assessing the SEC’s Role As Enforcer Against Financial Misconduct

By Chuan Chen, Yanrong Jia, Xiumin Martin and Bernardo Silveira January 10, 2023 by renholding

The Securities Exchange Act grants the SEC ample authority and discretion to investigate and seek sanctions related to violations of the securities laws, with the goal of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation (SEC, …

The Effect on Dividend Payouts of Board Independence

By Pandej Chintrakarn, Sirimon Treepongkaruna, Pornsit Jiraporn and Sang Mook Lee December 6, 2022 by renholding

In a new paper, we use agency theory to explore the effect of board independence on dividend policy. Over the past few decades, many studies have incorporated several market imperfections into their model of capital markets, such as transaction costs, …

Paul Weiss Discusses Second Circuit Ruling on Intent Element of a SOX Whistleblower Claim

By Geoffrey R. Chepiga, Andrew J. Ehrlich, Lorin L. Reisner, Audra J. Soloway and Daniel S. Sinnreich August 19, 2022 by renholding

On August 5, 2022, the Second Circuit held that individuals claiming they were terminated in retaliation for protected whistleblower activities under Sarbanes-Oxley must prove that their employer acted with retaliatory intent. Murray v. UBS Securities LLC, No. 20-4202 (2d …

How Auditors Helped Spread Stock-Option Backdating

By Aharon Mohliver August 17, 2022 by renholding

Stock-option backdating, the practice of changing the reported date of a stock-option grant to an earlier date, proliferated in the 1990s and early 2000s, with nearly one-third of public corporations engaging in it, according to some estimates (Heron and Lie, …

Davis Polk Discusses Reopening of Comment Period for SEC’s Dodd-Frank Clawback Rule

By Kyoko Takahashi Lin and Jennifer S. Conway June 14, 2022 by renholding

On June 8, 2022, the Securities and Exchange Commission announced that it is again reopening the comment period for its proposed clawback rule, a rule that has been required to be promulgated since the enactment of the Dodd-Frank Wall …

How Accounting Employees’ Incentives Affect Financial Reporting Quality

By Christopher S. Armstrong, John D. Kepler, David F. Larcker and Sean X. Shi June 7, 2022 by renholding

An extensive body of literature that spans accounting, corporate finance, management, and other adjacent disciplines examines the relationship between senior executives’ contractual incentives (e.g., bonus plans, stock and option holdings) and various properties of their firms’ financial reporting and disclosures. …

The Innovation and Reporting Consequences of Financial Regulation for Young Life-Cycle Firms

By Abigail M. Allen, Melissa F. Lewis-Western and Kristen Valentine April 19, 2022 by renholding

Over the last several decades, financial regulators have increaAdd Newsed governance and reporting requirements for publicly listed firms, frequently with the goal of improving the reliability of financial information available to investors. The implicit assumption in such regulation …

Corporate Law Professors on Public Company Boards

By Lawrence A. Cunningham February 13, 2020 by renholding

Since passage of the Sarbanes-Oxley Act of 2002, public companies have been more enthusiastic than ever about appointing independent directors with specific expertise. They have often reached into the academy to recruit university professors, where expertise and independent thought thrive. …

The Costs of Complying with SOX’s Internal-Controls Audit Requirement

By Jenny McCallen, Roy Schmardebeck, Jonathan E. Shipman and Robert Lowell Whited July 29, 2019 by renholding

Section 404(b) of the Sarbanes Oxley Act (SOX) requires auditors to test and report on the effectiveness of internal control over financial reporting (ICFR) for accelerated and large accelerated filers. Although Iliev (2010) documents substantial costs to initially comply with …

SEC Proposes to Exempt More Firms from Required Attestation of Internal Controls

By Colleen Honigsberg and Shivaram Rajgopal July 15, 2019 by renholding

The Securities and Exchange Commission has proposed changes to its rules requiring companies to obtain attestation on their internal controls from an independent public accountant. The proposal rests on the idea that attestation’s costs often exceed its benefits. The SEC’s …

SEC Chairman Clayton Comments on Proposed Amendments to Sarbanes-Oxley

By Jay Clayton May 10, 2019 by renholding

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act. Our only item on the agenda today is a recommendation from the Division of Corporation Finance to propose amendments

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SEC Commissioner Jackson Dissents from Proposed Amendments to Sarbanes-Oxley

By Robert J. Jackson, Jr. May 10, 2019 by renholding

Thank you, Mr. Chairman, and thank you to the Staff in the Division of Corporation Finance, including John Fieldsend, Elizabeth Murphy, Felicia Kung, Lindsay McCord, and Director Bill Hinman, for their work in developing today’s release. I also appreciate the

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Can Companies and M&A Law in Europe Adapt to the Market for Corporate Control?

By Matteo Gatti October 29, 2018 by renholding

Takeover regimes in Europe have been under persistent scrutiny by the public, politicians, and market participants. Sometimes, that is just the nature of the game: Takeovers create winners and losers, and the latter (with the help of their champions and …

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