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.

Key Facts:

The comment period closed on February 9, 2024
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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 …

Why Prosecuting Executives for Securities Fraud Is So Difficult

By James J. Park October 12, 2023 by renholding

In a new essay, I examine public company wrongdoing by focusing on securities fraud.

In general, there are two main reasons why companies commit wrongful acts. The first is that managers have incentives to further their own interests. They may …

The Perils of Reforming Corporate Law to Favor Stakeholders

By Matteo Gatti and Chrystin Ondersma September 22, 2023 by renholding

In corporate governance circles, the clash between the different philosophies of shareholder primacy and stakeholderism rages on. In a recent article in the Columbia Law Review, Professor Aneil Kovvali challenged what he calls the “stark choice hypothesis,” which suggests …

Aligning Business Efforts to Combat Corruption and Respect Human Rights

By David Hess September 11, 2023 by renholding

Over the past 25 years, there has been a significant evolution in businesses’ obligations both to combat corruption and to respect human rights. The late-1990s saw the emergence of a global anti-corruption norm, which resulted in the 2003 United Nations …

Do Corporations Care about ESG Ratings?

By Jess Cornaggia and Kimberly Cornaggia August 23, 2023 by renholding

While environmental, social, and governance (ESG) ratings provide useful information to stakeholders, it’s unclear whether firms care about them. On the one hand, ESG activities may not align with the traditional goal of maximizing shareholder wealth. Further, ESG ratings often …

The Duality of Corporate Purpose

By Dorothy S. Lund and Elizabeth Pollman July 31, 2023 by renholding

In a forthcoming chapter, we explore the duality of corporate purpose, which reflects two sides of corporate law and governance. First, because each corporation must specify a purpose in its charter, corporate purpose can be understood at the level of …

How Corporate Law in the Global South Has Pioneered “Heterodox Stakeholderism”

By Mariana Pargendler July 25, 2023 by renholding

How do the corporate laws of Global South jurisdictions differ from their Global North counterparts? Prevailing stereotypes depict the corporate laws of developing countries as either antiquated, mere copies of Global North models or plagued by problems of enforcement. While …

Wachtell Lipton Revisits the “New Paradigm” for Corporate Governance

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum and Carmen X.W. Lu July 21, 2023 by renholding

In view of the attacks on “woke” corporations, ongoing legislative opposition to the consideration by investors and corporations of environmental, social and governance (ESG) issues, legal challenges to elements of ESG itself (notably, initiatives designed to further diversity, equity and …

On Corporate Social Issues, U.S. Consumers Do Not Put Their Money Where Their Mouths Are

By Hans Bonde Christensen, Emmanuel T. De George, Anthony Joffre and Daniele Macciocchi July 19, 2023 by renholding

Despite an increasing focus on corporations that profit from social injustices and misconduct, governments and international agencies have had limited success in addressing these issues. Advocates for change suggest that stakeholders, particularly retail consumers, could help, given that their purchasing …

How Companies and the Market Respond to the Issuance of Green Bonds

By Sanjai Bhagat and Aaron Yoon July 17, 2023 by renholding

During the past decade, many corporations across the globe have issued green bonds – which are identical to traditional corporate bonds except that their proceeds are dedicated to environmental and climate-friendly corporate investments. Since they were first created in 2013, …

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The CLS Blue Sky Blog

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

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