Sky Blog
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 …
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 …
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 …
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 …
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 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 …
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 …
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 …
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, …
In a new book, I argue that the conversation about diversity in corporations (legal rules, policy discussions, academic writing, and media narratives) is missing some vital pieces. This means that we are making rules without understanding the full picture …
Since the launch of ChatGPT in November 2022, there’s been an exponential surge in the use of generative AI tools. Anecdotal evidence suggests that these tools are also of considerable interest to financial firms. As a case in point, Ken …
For more than ten years, Larry Fink, Chairman and CEO of BlackRock, the world’s largest asset manager, has published separate annual letters — one to CEOs and another to BlackRock’s shareholders. This year, Fink combined the two letters into one…
Corporate political activism (CPA) is defined as activities that are visible to stakeholders and that support or oppose issues viewed as politically charged. Social media and press accounts suggest a growing desire among consumers, employees, and shareholders for companies to …
The debate over the corporation’s purpose is today a central topic of corporate law scholarship. So far, the discussion has advanced little beyond a two-sided view, considering only the approaches known as shareholder primacy and corporate social responsibility (CSR). In …
I recently participated in a festschrift for retired justice (and noted stakeholderist) Leo E. Strine, Jr., hosted by the University of Pennsylvania Journal of Law and Business. Justice Strine’s interventions in the debate over shareholder primacy have added heft, pragmatism, …
In a new paper, we compare the main models of corporate governance (Schoenmaker, Schramade and Winter, 2022). One is the stakeholder model, which recognizes that companies have responsibilities to society that are broader than just making a profit. A problem …
Corporate governance guidelines (“CGGs”) are a relatively recent addition to the corporate governance framework of public companies. In 2003, in response to accounting scandals at Enron Corporation and several other large public companies, the NYSE created rules to improve the …
Employees at U.S. public corporations have increasingly demanded that their concerns be heard at the very senior levels of management. If current trends continue, boards of directors could also be challenged to accommodate “worker voice” more formally. Rather than being …
Regulation affecting managers’ disclosure of news in U.S. organizations has been affected by three main changes over the past three decades: (a) The Private Securities Litigation Reform (PSLR) Act, 1995, which protected managers from litigation arising from the disclosure of …
The shareholder proposal has long been an effective tool for shareholders to bring emerging corporate governance issues to the attention of a company’s board of directors, its managers, and their fellow shareholders. Over time, shareholder proposals have driven a variety …