Yearly Archives: 2017

Gender Diversity at Silicon Valley Public Companies 2016

Posted by David A. Bell and Kristine M. Di Bacco, Fenwick & West LLP, on

Tuesday, March 21, 2017

Board composition, Board dynamics, Director qualifications, Diversity, Management, Public firms, Surveys, Tech companies
More from: David Bell, Kristine Di Bacco, Fenwick

David A. Bell and Kristine M. Di Bacco are partners in the corporate and securities group at Fenwick & West LLP. This post is based on portions of a Fenwick publication.

Fenwick & West has released its updated study about gender diversity on boards and executive management teams of companies in the technology and life science companies included in the Silicon Valley 150 Index and very large public companies included in the Standard & Poor’s 100 Index. [1] The Fenwick Gender Diversity Survey uses over 20 years of data to provide a better picture of women’s participation at the most senior levels of public companies in Silicon Valley.

The report reviews public filings from 1996 through 2016 to analyze the gender makeup of boards, board leadership, board committees and executive management teams in the two groups, with special comparisons showing how the top 15 largest companies in the SV 150 fare, as they are the peers of the large public companies included in the S&P 100.

Key observations include:

Pre-IPO Pay for Snap’s CEO Evan Spiegel Outpaced Fellow Tech CEOs

Posted by Dan Marcec, Equilar, Inc., on

Tuesday, March 21, 2017

Dual-class stock, Equity-based compensation, Executive Compensation, Incentives, IPOs, Management, Say on pay, Shareholder voting, Tech companies
More from: Dan Marcec, Equilar

Dan Marcec is Director of Content at Equilar, Inc. This post is based on an Equilar publication by Mr. Marcec which was originally published in the Equilar Knowledge Center.

Snap Inc. recently filed its Form S-1, setting in motion plans for an upcoming initial public offering. The filing included fiscal year 2016 compensation for CEO Evan Spiegel and two other executives, providing the first public disclosure of the company’s top executive compensation.

The company [sought] a valuation that would rank among the largest initial valuations of recent IPOs in the internet and technology space. Equilar examined seven other recently IPO’d companies to see how Snap’s CEO compensation compared in the company’s final year before the offering. Below are the companies included in the study alongside their valuations at IPO.

Standing out from the Crowd via Corporate Goodness: Evidence from a Natural Experiment

Posted by Julie Wu, University of Nebraska, on

Tuesday, March 21, 2017

Corporate Social Responsibility, Executive performance, Hedging, Information environment, Management, Peer groups, Regulation SHO, Short sales, Signaling, Social capital
More from: Jie He, Julie Wu, Lei Gao

Juan (Julie) Wu is Assistant Professor of Finance at the University of Nebraska at Lincoln College of Business Administration. This post is based on a recent paper by Professor Wu; Lei Gao, Assistant Professor of Finance at Iowa State University College of Business; and Jie (Jack) He, Associate Professor at the University of Georgia Terry College of Business.

The past few decades have witnessed increasing awareness of corporate social responsibility (CSR) activities. These corporate goodness activities, where firms commit to giving simultaneous attention to the legitimate interests of all stakeholders, include (but are not exclusive to) employee relations, corporate philanthropy, and environment initiatives. Increases in corporate CSR engagement have generated ever-growing attention from academics of various disciplines, regulators, professional investors, and various other stakeholders. However, despite the continuous academic effort to better understand why firms engage in CSR, we still lack strong evidence on the motives of corporate goodness due to the endogeneity problem, a well-known methodological issue faced by most empirical studies. Our paper overcomes this challenge by using a natural experiment setting and sheds new light on why firms undertake CSR activities.

Long-Term Value Begins at the Board

Posted by Ronald P. O’Hanley, State Street Global Advisors, on

Monday, March 20, 2017

Accountability, Boards of Directors, Diversity, Engagement, Environmental disclosure, ESG, Institutional Investors, Long-Term value, Shareholder value, Stewardship, Sustainability
More from: Ron O'Hanley, SSgA

Ronald P. O’Hanley is President and CEO of State Street Global Advisors and Vice Chairman of State Street Corporation. This post is based on Mr. O’Hanley’s recent remarks at the Weinberg Center 2017 Corporate Governance Symposium at the University of Delaware.

It’s an honor to be here with you today [March 7, 2017], and I am grateful for the opportunity to share our perspectives on corporate governance.

First, I want to acknowledge the important work that Charles and his team do here at the Weinberg Center in promoting corporate governance.

The forum you provide for leaders in business, public policy and the legal community to discuss the governance issues that directly affect the ability of businesses to grow and prosper over the long run is absolutely critical.

These are existential issues not only for shareholders who want to invest in a vibrant future-but for our economy as a whole.

Today, I want to discuss our belief that “Long-Term Value Starts at the Board” and will review several key aspects:

Energy Transfer Equity: Importance of Careful Compliance by General Partner with MLP Requirements

Posted by Gail Weinstein & Philip Richter, Fried, Frank, Harris, Shriver & Jacobson LLP, on

Monday, March 20, 2017

Audit committee, Boards of Directors, Conflicts of interest, Delaware cases, Delaware law, Fiduciary duties, Institutional Investors, Merger litigation, Mergers & acquisitions, Partnerships, Safe harbor, Shareholder suits
More from: Gail Weinstein, Philip Richter, Robert Schwenkel, Scott Luftglass, Steven Epstein, Warren de Wied, Fried Frank

Gail Weinstein is senior counsel and Philip Richter is a partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication by Ms. Weinstein, Mr. Richter, Steven Epstein, Warren S. de Wied, Scott B. Luftglass, and Robert C. Schwenkel. This post is part of the Delaware law series; links to other posts in the series are available here.

In Energy Transfer Equity L.P. Unitholder Litigation (Mar. 1, 2017), the Court of Chancery denied the parties’ cross-motions for summary judgment, and ruled that the plaintiffs’ challenge to the General Partner’s issuance of convertible units to certain (but not all) unitholders, in exchange for their common units (the “Issuance”), required development of a full factual record at trial. The principal issues to be determined, according to the court, were: (i) whether the Conflicts Committee approval of the Issuance was effective (in which case claims of impropriety would be barred) and (ii) whether, in any event, the Issuance was a “distribution” under the partnership agreement (in which case it would have been prohibited, as the agreement provided that all “distributions” must be made pro rata to all the unitholders).

DOJ’s New Guidance for Compliance Programs

Posted by Ryan Rohlfsen and Amanda Raad, Ropes & Gray LLP, on

Sunday, March 19, 2017

Accounting, Compliance & ethics, Compliance and disclosure interpretation, Corporate culture, DOJ, Internal auditors, Management, Misconduct, Securities enforcement, Securities fraud
More from: Amanda Raad, David Rojas, Grant Hodges, Ryan Rohlfsen, Ropes & Gray

Ryan Rohlfsen and Amanda Raad are partners at Ropes & Gray LLP. This post is based on a Ropes & Gray publication by Mr. Rohlfsen, Ms. Raad, David Rojas and Grant Hodges.

On February 8, 2017, the Fraud Section of the U.S. Department of Justice (the “DOJ”) published a guide for companies called “Evaluation of Corporate Compliance Programs” (the “Guidance”). The Guidance is composed of common questions that the DOJ asks when evaluating a company’s compliance program. While the Guidance questions are largely based on familiar sources, such as the United States Sentencing Guidelines and the “Principles of Federal Prosecution of Business Organizations” in the United States Attorney’s Manual, [1] the questions provide a greater degree of detail and insight into the DOJ’s process for evaluating compliance programs.

Systems-Level Considerations and the Long-Term Investor: Definitions, Examples, and Actions

Posted by Steve Lydenberg, The Investment Integration Project, on

Saturday, March 18, 2017

Accountability, Corporate Social Responsibility, Environmental disclosure, ESG, Financial crisis, Institutional Investors, International governance, Social capital, Social networks, Stewardship, Sustainability, Systemic risk
More from: Steve Lydenberg, The Investment Integration Project

Steve Lydenberg is Founder and CEO of The Investment Integration Project (TIIP). This post is based on a TIIP publication by Mr. Lydenberg. The complete publication, including footnotes, is available here.

This post addresses the question of how asset owners and managers can identify environmental, societal and financial systems-level issues relevant to their investment processes. Integration of these systems-level considerations can help investors manage long-term risks and rewards while seeking competitive portfolio-level returns.

The primary questions addressed in this post are:

What are the characteristics of environmental, societal and financial systems-level issues that make them relevant to long-term investors for integration into investment processes?

What are examples of these systems-level issues that rise to the level of significance for such consideration and how in practice can that level of significance be determined?

Four guidelines that can help long-term investors determine the relevance of systems under consideration are proposed:

BlackRock’s 2017-2018 Engagement Priorities

Posted by Abe Friedman and Robert McCormick, CamberView Partners, on

Friday, March 17, 2017

BlackRock, Board composition, Boards of Directors, Diversity, Engagement, Environmental disclosure, ESG, Executive Compensation, Institutional Investors, Long-Term value, Proxy season, Proxy voting, Sustainability
More from: Abe Friedman, Chad Spitler, Rob Zivnuska, Robert McCormick, PJT Camberview

Abe M. Friedman is CEO and Robert McCormick is a partner at CamberView Partners, LLC. This post is based on a CamberView publication by Mr. Friedman, Mr. McCormick, Chad Spitler, and Rob Zvinuska.

On Monday, March 13^th, BlackRock released its engagement priorities for 2017-2018 to help prepare directors and management teams to engage with its Investment Stewardship team over the coming year. BlackRock reiterated its preference to engage privately with companies in a constructive manner, but also reminded companies that it will vote counter to management recommendations when appropriate.

BlackRock’s new engagement priorities address traditional areas of investor engagement such as governance, strategy and compensation alongside developing areas like climate risk and human capital management.

Highlights include:

Financial Crisis, Corporate Governance, and Bank Capital

Posted by Sanjai Bhagat, University of Colorado Boulder, on

Friday, March 17, 2017

Agency costs, Banks, Capital requirements, CHOICE Act, Dodd-Frank Act, Executive Compensation, Financial crisis, Financial institutions, Financial regulation, Incentives, Leverage, Liquidity, Management, Mortgage lending, Risk oversight, Risk-taking, Systemic risk, Too big to fail
More from: Sanjai Bhagat

Sanjai Bhagat is Provost Professor of Finance at the University of Colorado Boulder Leeds School of Business. This post is based on Professor Bhagat’s recent book.

Despite Dodd-Frank’s stated intentions to make “too-big-to-fail” banks a thing of the past, investors and policymakers believe that many big banks are still too big to fail. This issue has come up repeatedly in economic discussions in Congressional hearings, and among senior policymakers in the United States and Europe. In recent work, we propose a solution to the too-big-to-fail problem that can be implemented with minimal or no additional regulations, only the intervention of corporate board members and institutional investors in these big banks.

Weekly Roundup: March 10–16, 2017

Posted by HLS Forum on Corporate Governance and Financial Regulation, on

Friday, March 17, 2017

Weekly Roundup
More from:

This roundup contains a collection of the posts published on the Forum during the week of March 10–16, 2017.

Tags: Audit trail, Beneficial owners, Blockchain, Books and records, Contracts, Corporate disputes, Delaware law, DGCL, Disclosure, Filings, Financial technology, Innovation, Intermediaries, Ownership, Proxy voting, Securities regulation, Transparency

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Yearly Archives: 2017

Gender Diversity at Silicon Valley Public Companies 2016

Pre-IPO Pay for Snap’s CEO Evan Spiegel Outpaced Fellow Tech CEOs

Energy Transfer Equity: Importance of Careful Compliance by General Partner with MLP Requirements

DOJ’s New Guidance for Compliance Programs

BlackRock’s 2017-2018 Engagement Priorities

Financial Crisis, Corporate Governance, and Bank Capital

Weekly Roundup: March 10–16, 2017

The Modern Slavery Act 2015: Next Steps for Businesses

Stock Rising

The Delaware Trap: An Empirical Study of Incorporation Decisions

U.S. Tax Reform: Strategies for Executing Transactions in the Face of Uncertainty

Acting SEC Chair’s Steps to Centralize the Process of Issuing Formal Orders—Are Commentators Drawing the Right Lessons?

Defusing the Antitrust Threat to Institutional Investor Involvement in Corporate Governance

Is Disgorgement a “Forfeiture” for Statute of Limitations Purposes?

Board of Directors Compensation: Past, Present and Future

The Dealmaking State

SEC Enforcement: 2016 in Review and Looking Ahead to 2017

Super Hedge Fund

Diversity Investing

The First Block in the Chain: Proposed Amendments to the DGCL Pave the Way for Distributed Ledgers and Beyond

Delaware Blockchain Initiative: Transforming the Foundational Infrastructure of Corporate Finance

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