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 …

The Corporate Objective and Contemporary Shareholders: Is It Time for “Strategic” Corporate Governance?

By Maria Goranova and Lori Verstegen Ryan June 8, 2021 by renholding

The long-standing debate about corporate purpose has stirred multiple thought-provoking articles across various disciplines. Should companies embrace shareholder value maximization or deal with the fuzziness of the goals of multiple constituencies? Instead of contributing to either side of the shareholders …

Is Stakeholder Value an Excuse for Underperfoming Managers?

By Ryan Flugum and Matthew E. Souther November 25, 2020 by renholding

In August 2019, the Business Roundtable released a statement redefining the purpose of a corporation to maximize value “for the benefit of all stakeholders – customers, employees, suppliers, communities, and shareholders.” The statement was signed by 181 CEOs, including Jamie …

Corporations, Directors’ Duties, and the Public/Private Divide

By Jennifer G. Hill November 17, 2020 by renholding

Business history and theory reflect a tension between public and private conceptions of the corporation. This tension and conceptual ambiguity lay close to the surface of The Modern Corporation and Private Property, in which Berle and Means portrayed the …

Wachtell Lipton on the Purpose of the Corporation

By Martin Lipton, Steven A. Rosenblum, William Savitt and Karessa L. Cain May 27, 2020 by renholding

The growing view that corporations should take into account environmental, social and governance (ESG) issues in running their businesses, and resistance from those who believe that companies should be managed solely to maximize share price, has intensified the focus on …

Wachtell Lipton Offers Thoughts for Boards of Directors in 2020

By Steven A. Rosenblum December 12, 2019 by renholding

In hindsight, 2019 may come to be viewed as a watershed year in the evolution of corporate governance. After years of growing alarm about endemic short-termism, the sustainability and competitiveness of businesses over a long-term horizon, and the role of …

On an Expansive Definition of Shareholder Value in the Boardroom

By Eduardo Gallardo October 22, 2019 by renholding

Directors of a Delaware corporation must act in the best interest of the corporation and its shareholders.[1] Other stakeholders – such as employees, creditors, customers, and suppliers – may only be considered by directors to the extent there …

Corporate Purpose and the Dangers of Government-Mandated CSR

By Akshaya Kamalnath September 20, 2019 by renholding

The debate about the purpose of corporations seems to have heated up after Larry Fink’s annual letter to the CEOs of companies in which BlackRock invests and again after the statement from the Business Roundtable. Both Fink’s letter and the …

Wachtell Lipton Discusses Directors’ Duties in an Evolving Risk and Governance Landscape

By Martin Lipton and William Savitt September 19, 2019 by renholding

The stakes for responsible corporate stewardship have never been higher.

Corporations today account for a greater proportion of our collective productivity than ever before. Of the 100 largest economies in the world, 71 are corporations, and only 29 are countries. …

What Comes After Shareholder Primacy? Employee Empowerment

By Grant Hayden and Matthew Bodie September 16, 2019 by renholding

In corporate law, the U.S. academic elite stubbornly clings to shareholder primacy as the foundational principle of the field. The concept is simple, even elegant: Shareholders should be given ultimate control of the corporation because they are entitled to the …

Wachtell Lipton Discusses Stakeholder Governance and the Fiduciary Duties of Directors

By Martin Lipton, Karessa L. Cain and Kathleen C. Iannone September 3, 2019 by renholding

There has recently been much debate and some confusion about a bedrock principle of corporate law – namely, the essence of the board’s fiduciary duty, and particularly the extent to which the board can or should or must consider the …

Business Roundtable’s Statement on Corporate Purposes Has Noble Aims but Creates Uncertainty

By Michael W. Peregrine August 30, 2019 by renholding

The Business Roundtable’s controversial new Statement on the Purpose of a Corporation (“Statement”) is a significant corporate governance development that requires thorough board discussion. The Statement will not only affect corporate purposes generally, but also have a very uncertain impact …

Richards Kibbe & Orbe Discusses Limited Legal Implications of Business Roundtable Statement

By Scott C. Budlong, Lee S. Richards III, Margaret W. Meyers and David B. Massey August 28, 2019 by renholding

The Statement on the Purpose of a Corporation by the Business Roundtable, a one-page document signed by nearly all the organization’s member CEOs,[1] has been dramatically portrayed by the media (with the BRT’s encouragement) as a new commitment by …

Wachtell Lipton Discusses Stakeholder Corporate Governance: Business Roundtable and CII

By Martin Lipton August 26, 2019 by renholding

The failure of the Council of Institutional Investors to join the Business Roundtable in rejecting shareholder primacy and embracing stakeholder corporate governance is misguided. The argument that protection of stakeholders other than shareholders should be left to government regulation is …

Addressing Economic Insecurity: Why Social Insurance Is Better Than Corporate Governance Reform

By Jeffrey N. Gordon August 21, 2019 by renholding

The question that emerges from proposals to elevate a corporation’s “purpose,”[1] the call for co-determination in Senator Warren’s Accountable Capitalism Act and now the Business Roundtable’s purported elevation of stakeholder interests, is whether corporate governance is capable of …

Are Executives Really “Penny Wise and Pound Foolish” About ESG?

By David F. Larcker and Brian Tayan July 26, 2019 by renholding

Critics of the shareholder-primacy model assert that it is flawed because it encourages managers to adopt a myopic view of profit generation that forgoes necessary investment and creates externalities borne by society. These critics argue that greater attention should be …

The Effect of Corporate Visibility on Social Responsibility

By Zhichuan Frank Li, Taylor Morris and Brian Young June 27, 2019 by renholding

The general public can be a stakeholder in a firm, even when it does not have direct ownership. And as the public becomes more vested in a firm’s actions, the firm may be more likely to engage in corporate social …

Initial Crypto-asset Offerings, Tokenization, and Corporate Governance

By Stéphane Blemus and Dominique Guégan May 1, 2019 by renholding

Blockchain and other types of distributed ledger technology pose various new legal and economic questions for companies. Are crypto-asset holders a new kind of corporate stakeholder? If so, are they like shareholders or bondholders, and how can they participate in …

Wachtell Lipton Discusses Capitalism at an Inflection Point

By Martin Lipton February 20, 2019 by renholding

Dissatisfaction with corporations is near the top of the political agenda for both the left and for the right.

The Accountable Capitalism Act, a bill that would make all corporations with $1 billion or more of annual revenue subject to …

SEC Commissioner Airs Her Beef With Stakeholders

By Hester M. Peirce September 26, 2018 by renholding

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

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

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