Greenwashing: Do Investors, Markets, and Boards Really Care?

By Erdinc Akyildirim, Shaen Corbet, Steven Ongena and Les Oxley November 7, 2024 by renholding

In a new paper, we investigate the financial implications of greenwashing, focusing on stock market responses to identifiable greenwashing events and accounting for the heterogeneity of global regulatory landscapes.1 Greenwashing is a deceptive advertising and marketing technique that organizations use …

ESG, Corporate Piracy, and Coasian Contracting Efficiency

By Harry DeAngelo October 30, 2024 by renholding

Environmental, Social, and Governance (ESG) activity at real-world firms is largely about disagreements among shareholders over optimal corporate decisions and not about conflicts between shareholders (as a group) and stakeholders (e.g., customers, suppliers, and employees) who have transactional or contractual …

How Prior Links Between Private Equity Sponsors and Law Firms Affect LBO Loans

By Yijia (Eddie) Zhao, Ruiyuan (Ryan) Chen, Douglas J. Cumming and Binru Zhao October 23, 2024 by renholding

In leveraged buyouts (LBOs), a private equity (PE) sponsor acquires controlling ownership of a target company, typically by using a significant amount of bank loans. In a new study, we focus on a controversial issue: Many PE sponsors have prior …

Is Financial Disclosure Worth It for Private Firms?

By Joachim Gassen and Maximilian Muhn October 2, 2024 by renholding

Private firms are the backbone of our economies, influencing everything from investment levels to job creation to market competition. Given their collective significance, various regulatory agencies outside the U.S. impose financial disclosure (and sometimes audit) requirements on these firms. In …

How Board Independence Can Affect Employee Safety and Health

By Lixiong Guo and Zhiyan Wang September 30, 2024 by renholding

Since the 1990s, regulatory reforms worldwide have significantly increased the independence of corporate boards. By 2023, nearly all of the top 50 equity markets had implemented minimum requirements for board or board committee independence. While extensive literature highlights the benefits …

A Broader Corporate Purpose Requires Sharing Corporate Power

By Grant Hayden and Matthew Bodie September 18, 2024 by renholding

Can we speak of a “purpose” for corporations or, more broadly, corporate law? The doctrine of shareholder primacy has long had an easy answer: Both individual corporations and corporate law should strive to maximize shareholder wealth. But this reductive and …

Corporate Purpose, Social Enterprise Law, and the Future of the Corporation: A UK Perspective

By J S Liptrap August 7, 2024 by renholding

The U.S. debate on corporate purpose centers on whether corporations should prioritize shareholders’ interests over the well-being of non-shareholder constituencies. Though the debate dates back at least to the 1930’s Berle-Dodd exchange in the Harvard Law Review, it is …

The Impact of the Global Financial Crisis on Board Gender Diversity

By Shibashish Mukherjee and Sorin M.S. Krammer August 2, 2024 by renholding

The 2008-2009 global financial crisis (GFC) has cast a pall over several corporate governance mechanisms in many firms worldwide. Nonetheless, how the firms treated their female directors in the aftermath and whether they maintained gender diversity on their boards remain …

A New Corporate Governance Regime for Carbon Majors

By Matteo Gatti, Suren Gomtsian and Sandro Romano July 24, 2024 by renholding

The debate on corporate purpose is often grounded on an assumption that there is one right model of corporate purpose for all companies. Yet some companies have a much more significant impact on stakeholder groups than others. Just 90 corporations, …

The Dark Side of Safe Harbors

By Susan C. Morse June 24, 2024 by renholding

Safe harbors are useful and nifty. Consider the SEC’s accredited investor safe harbor under Rule 506 of Regulation D, which allows private securities offerings to sufficiently wealthy investors. Rule 506 facilitates capital formation and promotes efficient markets. Yet …

The Millennial Corporation: Strong Stakeholders, Weak Managers

By Michal Barzuza, Quinn Curtis and David H. Webber March 20, 2024 by renholding

After several years of dramatic growth, ESG investing seems to have entered a period of retrenchment. While it is impossible to predict the future trajectory of ESG, the movement has revealed important structural features of our financial system and the …

Why Should Corporate Executives Care About International Law?

By Kish Parella March 19, 2024 by renholding

What relevance does international law have for corporate governance? Why should corporate executives pay attention to it? The short answer is because their stakeholders do. In two separate articles, I explore the ways in which corporate stakeholders – including consumers, …

Davis Polk Analyzes Comment Letters to FDIC Corporate Governance Proposal

By Margaret E. Tahyar, Luigi L. De Ghenghi, Ledina Gocaj, Randall D. Guynn and David L. Portilla March 18, 2024 by renholding

In October 2023, the FDIC proposed enforceable guidelines on corporate governance and risk management that would apply to all state non-member banks with $10 billion or more in assets.

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Getting Serious About Stakeholders

By William O. Fisher March 7, 2024 by renholding

For whom should the corporation be run? The Business Roundtable proclaims the answer to be “for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.” Asset managers, both private and public, use their voting power to pressure …

Cleary Gottlieb Discusses How Companies Can Meet Fiduciary Duties When Speaking on Public Issues

By Lillian Tsu and Jonathan R. Povilonis February 13, 2024 by renholding

Companies today face more pressure to speak on social and political issues than ever before. With the constant barrage of issues, the consequences of any course of action can be hard to predict. Speaking up can risk backlash for saying …

Wachtell Lipton Discusses Key Issues in Corporate Governance for 2024

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain and Carmen X.W. Lu January 10, 2024 by renholding

Over the past year, expectations for directors have continued to evolve, bringing new challenges and responsibilities to the boardroom. The remarkable speed, volume and proliferation of channels through which information travels today continue to place more scrutiny on boards and

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Toward a Dynamic View of Corporate Purpose

By Dorothy S. Lund January 9, 2024 by renholding

What is the purpose of the corporation in society? Whose interests are corporate managers supposed to advance? How can corporate law and governance best promote social welfare? For the past 50 years, most scholars and business leaders would have answered …

Is It the End of Entire Fairness as We Know It?

By Kyle Wagner Compton, Lauren Murphy Pringle and Justin Morse December 12, 2023 by renholding

Striving to better, oft we mar what’s well — William Shakespeare, King Lear (1606)

The Delaware Court of Chancery has, for more than a century, honed unparalleled expertise in a unique body of corporate law based on equity – and …

Delaware Vice Chancellor Travis Laster Says Bill Barr Could Use Some Help on Delaware Law

By Travis Laster December 7, 2023 by renholding

The universe regularly provides reminders to remain humble, including reminders that having expertise in one area does not make you an expert in adjacent areas. Former Attorney General Bill Barr recently provided one of those reminders with his opinion column

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Stakeholder Governance as Governance by Stakeholders

By Brett McDonnell October 16, 2023 by renholding

Four score and twelve years ago, Adolf Berle and Merrick Dodd debated the fundamental role of corporations within society. We have engaged in that debate ever since. In a nation conceived in liberty and dedicated to the proposition that all …

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