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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
Joint Statement on Proposed Changes to Regulation S-K
We support sending out for public comment the recently proposed revisions to Regulation S-K, the central repository for non-financial statement disclosure. We’re especially grateful to our colleagues in the Division of Corporation Finance, Director Bill Hinman, Betsy Murphy, Felicia Kung, Lisa Kohl, Elliott Staffin, Sandra Hunter Berkheimer, and Shehzad Niazi for their careful and diligent […]
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Posted in Accounting & Disclosure, Practitioner Publications, Regulators Materials, Securities Litigation & Enforcement, Securities Regulation, Speeches & Testimony
Tagged Accounting, Disclosure, Human capital, Regulation S-K, SEC, Securities regulation, Transparency
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Index Fund Enforcement
Three financial institutions now vote 25% of the stock in the largest U.S. public companies. Soon, the figure may be closer to 40%. Vanguard, BlackRock, and State Street Global Advisors—the so-called “Big Three”—dominate the market for index funds and other passively-managed investment vehicles. As passive investing has grown increasingly popular with investors, these institutions have […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Institutional Investors, Securities Litigation & Enforcement
Tagged Accountability, Agency costs, BlackRock, Common ownership, Engagement, Fund managers, Incentives, Index funds, Institutional Investors, Misconduct, Securities litigation, Shareholder suits, Shareholder value, SSgA, Stewardship, Vanguard
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Economic Value Added Makes a Come Back
It’s like déjà vu all over again. That’s what many directors might have thought after Institutional Shareholder Services (ISS) recently announced its new embrace of economic value added (EVA). Several decades ago, this measure of financial performance—akin to economic profit—climaxed in popularity, championed by Stern Stewart & Co. It then swooned for various reasons, even […]
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Posted in Accounting & Disclosure, Corporate Elections & Voting, Institutional Investors, Practitioner Publications
Tagged Accounting, Accounting standards, Disclosure, Economic value added, Firm performance, Institutional Investors, Institutional Shareholder Services Inc., Pay for performance, Proxy advisors, Shareholder value
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Compensation Committees & Human Capital Management
What’s in a name? For compensation committees, it well might be a change in their identities as they take on new oversight functions for their companies’ boards. New research from Willis Towers Watson confirms the dramatic change in the traditional role of the compensation committee as human capital management (HCM) responsibilities become more prominent. What […]
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Posted in Boards of Directors, Executive Compensation, Practitioner Publications
Tagged Board oversight, Boards of Directors, Compensation committees, Diversity, Executive Compensation, Human capital, Succession
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Shareholder Governance and CEO Compensation: The Peer Effects of Say on Pay
Growth in institutional ownership and activism combined with regulatory changes have led shareholders to play an increasingly important role in the governance of U.S. public firms. While a well-developed literature provides evidence on the direct effects of shareholder governance actions on the firms that are subject to them, there is scant evidence to date on […]
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Posted in Academic Research, Boards of Directors, Corporate Elections & Voting, Executive Compensation
Tagged Boards of Directors, Compensation consultants, Executive Compensation, Information environment, Management, Pay for performance, Peer effects, Say on pay, Shareholder voting
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An Implied Private Right of Action Under the Investment Company Act
In an August 5 holding that could open the door to a new breed of litigation claims involving mutual funds, the United States Court of Appeals for the Second Circuit ruled that the Investment Company Act of 1940 (“ICA”) creates an implied private right of action that several other courts had previously declined to recognize. […]
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Posted in Court Cases, Institutional Investors, Practitioner Publications, Securities Litigation & Enforcement
Tagged Contracts, Investment Company Act, Mutual funds, Securities litigation, Shareholder suits, U.S. federal courts
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Appraisal Claim Waivers and Deal Covenants
On May 15, 2019, Vice Chancellor Slights of the Delaware Court of Chancery issued a ruling addressing important issues related to private company deal litigation. Specifically, the decision addressed when a release of claims and covenant not to sue can bar ensuing appraisal and fiduciary claims by stockholders. The case, In re Altor BioScience Corporation, […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications, Securities Litigation & Enforcement
Tagged Acquisition agreements, Appraisal rights, Boards of Directors, Covenants, Delaware cases, Delaware law, Fiduciary duties, Merger litigation, Mergers & acquisitions, Shareholder suits
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CEO Incentives Shown to Yield Positive Societal Benefits
The negative aspects of large CEO pay and the associated incentives have been a hot political issue in many countries. Our research identifies some positive aspects of CEO incentives in a broader economic/societal context that have been overlooked. In a five-year longitudinal study across major free-market nations in Asia, Europe, and the Americas, we find […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Executive Compensation, International Corporate Governance & Regulation
Tagged Agency model, Executive Compensation, Incentives, International governance, Management
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Mutual Fund Excessive Fee Claims and Market Conditions
In a decisive August 5 ruling that could be the final nail in the coffin for plaintiffs’ efforts to compare advisory and subadvisory fees, a federal court in the Central District of California rejected claims of excessive mutual fund fees asserted against Metropolitan West Asset Management, LLC (“MetWest”) following a bench trial. Finding in MetWest’s […]
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Posted in Court Cases, Practitioner Publications, Securities Litigation & Enforcement
Tagged Investment advisers, Mutual funds, Securities litigation, U.S. federal courts
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Relative Performance and Incentive Metrics
Relative benchmarking is near-universal as companies assess historical pay-for-performance (P4P) alignment, but should relative performance be an explicit incentive plan measure? Most companies provide the majority of their long-term incentive (LTI) award opportunity to senior executives in equity-based awards, which has an underlying value directly aligned to stock price fluctuations. If companies decide this is […]
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Posted in Accounting & Disclosure, Executive Compensation, Practitioner Publications
Tagged Equity-based compensation, Executive Compensation, Firm performance, Incentives, Pay for performance, Performance measures, Say on pay, TSR
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