Sky Blog
For years, activist investors and corporate governance advocates have fought to eliminate classified boards at public companies. Classified (or staggered) boards, which only allow a portion of directors to be replaced at each annual meeting, are sometimes seen as a …
Classified boards, which divide directors into staggered classes with only one class standing for reelection annually, have long been considered a powerful defense against hostile corporate takeovers. Despite their widespread use, they remain a topic of intense debate. While studies …
Debates about corporate governance ultimately rest on empirical studies that evaluate whether a particular type of governance enhances shareholder value. In recent years, lawyers have increasingly engaged with these studies, by either criticizing or praising them, and given them greater …
Do companies adopt optimal governance arrangements when they go public? This question has been a hotly debated topic in corporate law and governance and one that I examine in a recent paper.
At the time of an initial public offering …
Professor Lucian Bebchuk has engaged in two rounds of law-review-article duels with Professor Martijn Cremers and Professor Simone Sepe over classified boards. The weapons were statistics (and common sense). Cremers and Sepe wore the classified-board-stakeholder colors; Bebchuk, the agency-model-shareholder-democracy colors. …
For the last 40 years, the problem of managerial agency costs—corporate managers shirking duties and diverting resources—has dominated the study of corporate law and governance. Many scholars treat the reduction of agency costs as the essential function of corporate law …
For a long time, the academic literature has largely supported the view that staggered boards — which require challengers to win at least two election cycles to gain a board majority — entrench directors and managers to the detriment of …