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Program on Corporate Governance Advisory Board
- Peter Atkins
- David Bell
- Kerry E. Berchem
- Richard Brand
- Daniel Burch
- Paul Choi
- Jesse Cohn
- Arthur B. Crozier
- Renata J. Ferrari
- Andrew Freedman
- Ray Garcia
- Joseph Hall
- Jason M. Halper William P. Mills
- David Millstone
- Theodore Mirvis
- Philip Richter
- Elina Tetelbaum
- Sebastian Tiller
- Marc Trevino
- Steven J. Williams
Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation
Why and How Capitalism Needs to Be Reformed
Before I explain why I believe that capitalism needs to be reformed, I will explain where I’m coming from, which has shaped my perspective. I will then show the indicators that make it clear to me that the outcomes capitalism is producing are inconsistent with what I believe our goals are. Then I will give […]
Click here to read the complete postThe Business Roundtable’s Purpose Statement, One Year On
It’s been just over a year since over 180 CEOs signed on to the Business Roundtable’s (BRT) statement on the purpose of a corporation, committing to lead their companies for the benefit of all stakeholders, not just shareholders. This statement formally set a new vision for corporate action and drew a lot of attention from media, businesses, […]
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Posted in Accounting & Disclosure, ESG, Institutional Investors, Practitioner Publications
Tagged Business Roundtable, Climate change, Corporate purpose, ESG, Institutional Investors, Shareholder primacy, Shareholder value, Stakeholders, Sustainability
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Treasury Issues Final Rule Updating CFIUS Regulations
On September 15, 2020, the Office of Investment Security of the U.S. Department of the Treasury (“Treasury”) published a final rule modifying the Committee on Foreign Investment in the United States’ (“CFIUS” or the “Committee”) regulations relating to its mandatory declaration provisions. The most significant amendments pertain to the mandatory filing requirements for certain foreign […]
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Posted in Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged CFIUS, International governance, Securities enforcement, Securities regulation, Tech companies, Treasury Department
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SEC Increases Rule 14a-8 Thresholds
The U.S. Securities and Exchange Commission (“Commission”) has adopted amendments to the proxy rules to increase the threshold requirements for shareholders to access a company’s proxy materials. These new rules will make it more difficult for certain shareholders seeking to submit shareholder proposals for inclusion at a company’s special or annual meeting of shareholders. Previously, […]
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Posted in Corporate Elections & Voting, Legislative & Regulatory Developments, Practitioner Publications, Securities Regulation
Tagged Exchange Act, Proxy materials, Proxy voting, Rule 14a-8, SEC, Securities regulation, Shareholder proposals, Shareholder voting
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Short-Termism Revisited
Improving fundamental analysis by considering agency problems Since at least the 1980s, economists have discussed agency problems: when agents such as managers at a company act in their own interest rather than in the interests of their principals, the shareholders. CFA Institute is interested in learning how to address agency problems through better fundamental analysis […]
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Posted in Accounting & Disclosure, ESG, Practitioner Publications
Tagged Accounting, Agency costs, Climate change, Engagement, Environmental disclosure, ESG, Incentives, Institutional Investors, Long-Term value, Short-termism, Stakeholders, Sustainability
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Board Diversity: No Longer Optional
Research finds correlation between board diversity and company’s financial performance Several studies have established that there is a correlation between diversity and companies’ financial performance. In 2018, McKinsey’s report stated: “Diverse companies are 33% more likely to have greater financial returns than their less-diverse industry peers.” In another study, BCG reported that companies with above-average […]
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Posted in Boards of Directors, ESG, Institutional Investors, Practitioner Publications
Tagged Board composition, Board dynamics, Boards of Directors, California, Diversity, ESG, Stakeholders, State law
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Reclaiming “Value” in the True Purpose of the Corporation
As corporate boards have increasingly embraced broad stakeholder governance and sustainable value creation in confronting today’s urgent environmental and social challenges, some critics have sown confusion by claiming that stakeholder governance stands at odds with a duty to promote shareholder value. Remarkably, some now even argue that those directors who view their fiduciary duty as […]
Click here to read the complete postNew Law Requires Diversity on Boards of California-Based Companies
In a move that continues California’s push for increased diversity on corporate boards, Governor Gavin Newsom on September 30, 2020 signed into law a bill that requires publicly held companies headquartered in the state to include board members from underrepresented communities. The action follows passage of a similar law in 2018 mandating that public companies […]
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Posted in Boards of Directors, ESG, Practitioner Publications
Tagged Board composition, Boards of Directors, California, Diversity, ESG, State law
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Market Forces Already Address ESG Issues and the Issues Raised by Stakeholder Capitalism
Stakeholders versus Shareholders There is currently much discussion of stakeholder capitalism, the proposition that firms should be run in the interests of all their stakeholders, including workers, and various types of securityholders, and not just shareholders. My theme is that contract structures—the contracts negotiated among a firm’s stakeholders—address stakeholder interests. Contract structures are an important […]
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Posted in Academic Research, Corporate Elections & Voting, Corporate Social Responsibility, ESG
Tagged Contracts, Corporate Social Responsibility, ESG, Incentives, Market efficiency, Shareholder activism, Shareholder value, Social contract, Stakeholders
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2020 Proxy Season Review
This post covers our Stewardship Engagement Guidance to companies in response to COVID-19, the integration of R-Factor™ into our Proxy Voting and Engagement Guidelines, the enhancement of our Proxy Voting Guidelines on board quality and composition, the impact of our Fearless Girl Campaign following its third anniversary, the launch of our new Stewardship Platform to […]
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Posted in Corporate Elections & Voting, ESG, Institutional Investors, Practitioner Publications
Tagged Board composition, Climate change, COVID-19, Diversity, Engagement, ESG, Institutional Investors, Proxy season, Shareholder proposals, Shareholder voting, Sustainability
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