Monthly Archives: June 2025

Bob Monks: A Life in Corporate Governance

Posted by Lucian Bebchuk and Stephen Davis (Harvard Law School), on
Monday, June 30, 2025
, , ,
More from: ,

Lucian Bebchuk is the James Barr Ames Professor of Law, Economics, and Finance, and Director of the Program on Corporate Governance, at Harvard Law School; Stephen M. Davis is a Senior Fellow at the Harvard Law School Program on Corporate Governance and a Co-organizer of the Capital+Constitution project.

Robert A.G. Monks, HLS ’58, passed away earlier this spring at the age of 91.  Bob, a lifelong friend of both of us, was a remarkable figure who left a lasting mark on the world of corporate governance. His passing is a moment to reflect on his legacy.

But before proceeding to discuss various contributions that he made to the field in general, we wish to acknowledge his contributions to the Harvard Law School Program at Harvard Law School, with which we are both associated. Bob was an early member of the Program’s Advisory Board, and his advice and encouragement significantly helped the development of the Program.

He also actively participated in some of the Program’s roundtables, and he visited Lucian’s courses several times for presentations that students found both inspiring and intriguing. Program projects that he closely and supportively followed were its Shareholder Rights Project, a clinical program that during three academic years (2011-2012 through 2013-2014) contributed to board declassification at about 100 S&P 500 and Fortune 500 companies, and the Program’s research projects on shareholder rights and on executive compensation.

Robert A.G. Monks would begin his life as a transformer of markets in the unlikely role of a government official in the Reagan administration. In 1984, US institutional investors considered proxy voting to be all but meaningless. Most, according to an IRRC study at the time, routinely either trashed ballots or cast them automatically in favor of corporate management at portfolio companies. So, when retirement savings plan administrators met at a conference dinner that April 5 in Washington, DC, they could hardly have been prepared for the speech that the then-little-known Monks was about to deliver. Bob was the US Department of Labor’s newly-installed pension regulator, giving his first public remarks. The vision he set out from the podium can in retrospect be seen as the foundational manifesto for modern corporate governance and investor stewardship. READ MORE »

An Ode to Robert Monks

Posted by Charles W. Elson (University of Delaware), on
Monday, June 30, 2025
, , ,
More from:

Charles W. Elson is the Founding Director of the Weinberg Center for Corporate Governance and Woolard Chair in Corporate Governance (ret.) at the University of Delaware.

The corporate governance community lost one its most significant and influential members on April 29, 2025. The passing of Robert Monks was a sad but important event that must be noted. Very few of us can claim a substantial impact on the broader communities in which we live. Even fewer can be said to have truly changed the world. Bob Monks was such a man.

His work over forty years dramatically altered the relationships between shareholders, boards and management world-over and led to greater corporate responsibility, accountability and economic success. Directors, though his efforts, achieved a much needed and much more important role in the stewardship of the institutions for which they are fiduciaries than was true for many decades. Rather than being simply “the parsley on the corporate fish” in so many public and private companies, boards assumed the oversight power and responsibilities the position was originally conceived to entail as a result of his efforts.

But how was he so influential and exactly who was he? Monks was born into a wealthy and prominent New England family. He attended St. Paul’s, Harvard, Cambridge and Harvard Law School. He practiced law briefly, but soon turned to the corporate managerial world, making him a very rich man. He chaired to Boston Company, a large asset management firm, until it was sold to Shearson in 1981 and was a respected and influential investor and corporate director. Bob was the consummate corporate insider.

However, he always felt that the most significant problem with the American corporate system was the lack of accountability of company management and boards to the business’s ultimate owners, the shareholders, leading to poor performance and stifling economic progress. Beginning in the mid-1980’s he sought to dramatically reform traditional corporate norms that created such a troubling state. His approach was quite simple. As the Washington Post noted, he “mobilized the power of shareholder blocks to redefine the rules of engagement in American capitalism.”

READ MORE »

Tribute to Bob Monks

Posted by Nell Minow, ValueEdge Advisors, on
Monday, June 30, 2025
, , ,
More from: ,

Nell Minow is the Vice Chair of ValueEdge Advisors.

I was eight months pregnant with my second child in December of 1985 when Bob Monks offered me a job as the first general counsel, and the fourth person on staff at Institutional Shareholder Services (ISS). We had met when he was working for then-Vice President George H.W. Bush and I was working at the Office of Management and Budget. I was immediately impressed with his incisive analysis, his ability to understand the most complex policy conundrums and isolate the key elements, his vigorous intellect, and – quite rare among people of his level of accomplishment and status – his openness to questions and disagreement. He even seemed to relish that.

Bob told me his new company was going to “advise institutional investors on corporate governance issues.” In that sentence, the only words I recognized were “advise,” “on,” and “issues.”  But I was taken with his vision that ERISA, then just 11 years old, had created a category of investor, big enough, smart enough, and, as fiduciaries, obligated to resolve all conflicts in favor of the beneficial holders, that could reverse the separation of ownership and control defined by Adolf Berle and Gardiner Means in 1932.

He explained to me that this change was being accelerated because the creation of securities to finance any size of takeover had led to unprecedented abuses of shareholders by what we then called corporate raiders READ MORE »

Protecting GP Discretion in Valuing Incentive Units: Lessons from Walker v. FRP

Posted by Gail Weinstein, Jeffrey Ross, and Rati Ranga, Fried, Frank, Harris, Shriver & Jacobson LLP, on
Sunday, June 29, 2025
, , ,
More from: , , ,

Gail Weinstein is a Senior Counsel, Jeffrey Ross is a Partner and Chair, and Rati Ranga is a Special Counsel at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Weinstein, Mr. Ross, Ms. Ranga, Steven Epstein, Philip Richter, and Steven J. Steinman, and is part of the Delaware law series; links to other posts in the series are available here.

In Walker v. FRP Investors GP, LLC (Apr. 15, 2025), the Delaware Court of Chancery, in a post-trial opinion, held that the general partner, FRP Investors GP, LLC (“GP”), of a limited partnership, FRP Investors, L.P. (the “Partnership”), breached its obligations under the Limited Partnership Agreement (the “LPA”) when determining the “Threshold Value” of newly issued incentive units (“B Units”) of the Partnership. The B Units permitted key managers of Foundation Risk Partners Corp., a company held by the Partnership (the “Company”), to participate in the growth in value of the Company above the Threshold Value of the B Units issued to them. Private equity firm Warburg Pincus controlled GP, which controlled the Partnership.

The Plaintiff, who was the former CFO of the Company, did not receive any of the newly issued B Units and his existing Partnership stake thus was diluted by the new issuance. He claimed that, as a result of GP’s breach, the Threshold Value for the newly issued units was set too low, which exacerbated the dilution of his stake. The court awarded the Plaintiff damages for the increased dilution that resulted from GP setting the Threshold Value too low.

READ MORE »

Remarks by Commissioner Uyeda at the Executive Compensation Roundtable

Posted by Mark T. Uyeda, U.S. Securities and Exchange Commission, on
Saturday, June 28, 2025
, , ,
More from: ,

Mark T. Uyeda is a Commissioner of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in the post are those of Commissioner Uyeda and do not necessarily reflect those of the Securities and Exchange Commission or the Staff.

Thank you, Chairman Atkins, for convening today’s roundtable. I look forward to engaging in a dialogue with panelists and commenters on whether the executive compensation disclosure framework can be improved. Already, the Commission has received a number of public comment letters on executive compensation, which I found helpful in preparation for today’s roundtable. [1]

At the outset, the Commission has no authority to set or limit compensation paid at public companies, whether with respect to executives, workers, or contractors. SEC disclosures should not drive executive compensation decisions or seek to influence compensation practices. Moreover, it is inappropriate to use SEC regulations with the intent of addressing desired political or social outcomes with respect to income and wealth inequality in the United States. To the contrary, executive compensation disclosures should provide information material to an informed investment or voting decision.

Attempts to control executive pay through indirect means have proven clumsy and often resulted in the exact opposite result. In the 1990s, Congress passed tax legislation to make it less favorable to provide chief executive officer (CEO) salaries in excess of $1 million. Rather than limit CEO pay, the legislation significantly accelerated equity-based forms of executive compensation. In 2006, then-Chairman Christopher Cox described this effort, which backfired: “[w]ith complete hindsight, we can now all agree that this purpose was not achieved. Indeed, this tax law change deserves pride of place in the Museum of Unintended Consequences.” [2]

READ MORE »

Remarks by Chair Atkins at the Executive Compensation Roundtable

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on
Friday, June 27, 2025
, , ,
More from: ,

Paul S. Atkins is the Chairman of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in the post are those of Chairman Atkins and do not necessarily reflect those of the Securities and Exchange Commission or the Staff.

Good afternoon. Welcome to all of you attending in person or watching and listening online to today’s roundtable on executive compensation. I thank the very distinguished group of moderators and panelists who have assembled here today for volunteering their time to contribute their thoughts on this important topic.

As one of the enumerated disclosure items in Schedule A to the Securities Act of 1933, [1] the requirement to provide executive compensation information is as old as the federal securities laws themselves. Over the past ninety years, the Commission has adopted numerous rules requiring more and more information about executive compensation. Some of these rules have come about from Congressional mandates, while others have not. I have been at the SEC in one role or another for a couple of these changes, including the 1992 rulemaking initiated by Chairman Richard Breeden that created the “summary compensation table” [2] and the 2006 rulemaking that introduced “compensation discussion and analysis” and added other compensation tables. [3]

Today, one might describe the Commission’s current disclosure requirements as a Frankenstein patchwork of rules. The volume and complexity of these rules may be just as scary to a law firm associate performing a “form check” of a proxy statement, as the monster was to Dr. Frankenstein himself when the monster opened its eyes.

READ MORE »

Remarks by Commissioner Crenshaw at the Executive Compensation Roundtable

Posted by Caroline A. Crenshaw, U.S. Securities and Exchange Commission, on
Friday, June 27, 2025
, , ,
More from: ,

Caroline A. Crenshaw is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on her recent remarks. The views expressed in this post are those of Commissioner Crenshaw and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Good afternoon. I’m sorry that I can’t be with you for today’s roundtables, which I’m certain will generate some thought-provoking ideas and conversations.

Executive compensation never fails to be a hot topic. It is an issue consistently and prominently invoked in discussions of corporate responsibility and governance. And, it stands out among those topics that marry capital formation to shareholder rights and engagement.

READ MORE »

Weekly Roundup: June 20-26, 2025

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, June 27, 2025

More from:

This roundup contains a collection of the posts published on the Forum during the week of June 20-26, 2025

Disclosure Trends From the 2024 Reporting Season

Posted by Christine Mazor and Doug Rand, Deloitte LLP, on Friday, June 20, 2025
Tags: , , , ,

SEC Considers Narrowing Foreign Private Issuer Definition

Posted by Helena Grannis, Jorge Juantorena, and Sebastian Sperber, Cleary Gottlieb Steen & Hamilton LLP, on Saturday, June 21, 2025
Tags: , , , ,

Delaware Courts Continue to Reject Hypothetical, Unripe Bylaw Challenges

Posted by Charlotte K. Newell and Ram Sachs, Sidley Austin, on Sunday, June 22, 2025
Tags: , , ,

AI Can Draft Board Minutes—But Should It? Considerations for Public Companies

Posted by Charu A. Chandrasekhar, Avi Gesser, and Eric T. Juergens, Debevoise & Plimpton LLP, on Monday, June 23, 2025
Tags: , , ,

Mass Corporate Governance

Posted by Caleb N. Griffin (University of North Carolina School of Law), on Monday, June 23, 2025
Tags: , , ,

Board Effectiveness: A Survey of the C-Suite

Posted by Paul DeNicola, Arielle Berlin, and Carin Robinson, PricewaterhouseCoopers, on Monday, June 23, 2025
Tags: , , , ,

Top 10 Corporate Sustainability Priorities for 2025

Posted by Matteo Tonello, The Conference Board, on Tuesday, June 24, 2025
Tags: , , , ,

Finding an Alternative Disclosure Path: IPO Business Model Targets

Posted by Badryah Alhusaini (Arizona State University), Elizabeth Blankespoor (University of Washington), Bradley E. Hendricks (University of North Carolina at Chapel Hill), and Gregory Miller (University of Michigan), on Tuesday, June 24, 2025
Tags: , , , ,

An Early Look at the 2025 Proxy Season

Posted by Rajeev Kumar, David Farkas, and Amanda Buthe, Georgeson, on Tuesday, June 24, 2025
Tags: , , , ,

DOJ Resumes FCPA Enforcement with New Guidelines

Posted by Theodore Chung, Henry Klehm, and Karen Hewitt, Jones Day, on Wednesday, June 25, 2025
Tags: , , ,

Beyond the Corporate Culture Wars: How Companies Are Revolutionizing Decision-Making on Social Issues

Posted by Gadinis (University of California, Berkeley), on Wednesday, June 25, 2025
Tags: , , ,

Investment Stewardship 2024 Annual Report

Posted by John Galloway, Vanguard, Inc., on Wednesday, June 25, 2025
Tags: , , ,

COSO and NACD Propose New Corporate Governance Framework

Posted by C. Michelle Chen, Robert W. Downes, and Marc Treviño, Sullivan & Cromwell LLP, on Thursday, June 26, 2025
Tags: , , ,

Corporate Director and Officer Liability — “Discretionaries” Not Fiduciaries

Posted by Marc Steinberg (SMU Dedman School of Law), on Thursday, June 26, 2025
Tags: , , , ,

Beyond the Pendulum: Lessons from SEC’s Implementation of Staff Legal Bulletin 14M

Posted by Sanford Lewis and Khadija Foda, Shareholder Rights Group, on Thursday, June 26, 2025
Tags: , , ,

Beyond the Pendulum: Lessons from SEC’s Implementation of Staff Legal Bulletin 14M

Posted by Sanford Lewis and Khadija Foda, Shareholder Rights Group, on
Thursday, June 26, 2025
, , ,
More from: , ,

Sanford Lewis is Director and General Counsel and Khadija Foda is a Legal Consultant at the Shareholder Rights Group. This post is based on their Shareholder Rights Group memorandum.

On February 12, 2025, the Staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) issued Staff Legal Bulletin 14M (“SLB 14M”) introducing significant interpretive changes in its implementation of the shareholder proposal Rule 14a-8’s “ordinary business”(i)(7) and “relevance” (i)(5) exclusions. SLB 14M represents a pendulum swing between administrations, shifting back to some interpretations prevalent between 2017 and 2020 and away from the guidance in effect from 2021 to 2024.

These frequent shifts pose challenges for proponents and issuers alike — but they also provide learning opportunities and the potential to define a workable, middle ground interpretive framework that endures beyond administrative cycles.

Through a review of many of the Staff’s no-action letters, we identified key developments in interpretative approach and takeaways. While some of the new interpretations offer clear, practical guidance, others risk abrogating investors’ rights to raise material concerns with their companies. We suggest areas meriting further attention by the SEC and Rule 14a-8 stakeholders.

READ MORE »

Corporate Director and Officer Liability — “Discretionaries” Not Fiduciaries

Posted by Marc Steinberg (SMU Dedman School of Law), on
Thursday, June 26, 2025
, , , ,
More from:

Marc Steinberg is the Rupert and Lillian Radford Professor of Law at the SMU Dedman School of Law. This post is based on his recent book, and is part of the Delaware law series; links to other posts in the series are available here.

Since my days at the SEC in the 1970s and 1980s and my academic career that started shortly thereafter, it was gospel that corporate directors and officers are fiduciaries. Indeed, that perception has been a fundamental aspect of corporate lore for centuries and remains vibrant today. This belief, however, is not based on reality. Indeed, identifying corporate directors and officers as fiduciaries is a misnomer.

 

My just published Oxford University Press book Corporate Director and Officer Liability — “Discretionaries” Not Fiduciaries seeks to instill reality into the corporate governance framework with respect to the liability of these individuals. Insofar as I am aware, this is the first source to advocate for the removal of fiduciary status for directors and officers. In its stead, these individuals should be deemed “discretionaries.”  This neutral term accurately portrays the status of corporate directors and officers who are held to varying standards of liability depending on the applicable facts and circumstances.

 

That is not to say that fiduciary standards are nonexistent. Indeed, it is true that in certain situations meaningful fiduciary standards apply to director and officer liability exposure. For example, in an interested director transaction that is neither approved by independent directors nor disinterested shareholders, the entire fairness test prevails. As another example, in a going-private transaction where the parent corporation engages in a cash-out merger transaction eliminating its subsidiary’s minority shareholders, the entire fairness test likewise applies unless there was effectively implemented an independent and competent special negotiation committee as well as approval by an adequately informed uncoerced minority vote.

READ MORE »

Page 1 of 8
1 2 3 4 5 6 7 8