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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
SEC Proposal on Pro Forma Synergy Disclosures
The SEC recently proposed amendments to its financial disclosure requirements relating to business acquisitions and dispositions. In general, the proposals reflect a welcome comprehensive review and update, balancing the need for providing relevant information to investors with the costs and burdens of disclosure requirements. Among other things, the proposed amendments would: revise the “significance” tests […]
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Posted in Accounting & Disclosure, Mergers & Acquisitions, Practitioner Publications, Securities Regulation
Tagged Accountability, Disclosure, Financial reporting, Mergers & acquisitions, Regulation S-X, SEC, Securities regulation
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Solving Banking’s “Too Big to Manage” Problem
One of the enduring ironies of the 2008 financial crisis is that nearly everyone now dislikes big banks, but no one can agree what to do about them. Policymakers as diverse as Bernie Sanders, Elizabeth Warren, John McCain, Newt Gingrich, and even President Donald Trump, have called for shrinking the largest financial firms. In fact, […]
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Posted in Academic Research, Banking & Financial Institutions, Comparative Corporate Governance & Regulation, Financial Crisis, Financial Regulation
Tagged Banks, Divestitures, Dodd-Frank Act, Federal Reserve, Financial crisis, Financial institutions, Financial regulation, Glass-Steagall, Incentives, Moral hazard, Systemic risk, Too big to fail
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Glass Lewis, ISS, and ESG
With some help from leading investor groups like Black Rock and T. Rowe Price, environmental, social, and governance (“ESG”) issues, once the sole purview of specialist investors and activist groups, are increasingly working their way into the mainstream for corporate America. For some boards, conversations about ESG are nothing new. For many directors, however, the […]
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Posted in Accounting & Disclosure, Boards of Directors, Institutional Investors, Practitioner Publications
Tagged Boards of Directors, Climate change, Environmental disclosure, ESG, Glass Lewis, Institutional Investors, ISS, Proxy advisors
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Task Force on Climate-Related Financial Disclosure 2019 Status Report
Executive Summary In June 2017, The Task Force on Climate-related Financial Disclosures (Task Force or TCFD) released its final recommendations (2017 report), which provide a framework for companies and other organizations to develop more effective climate-related financial disclosures through their existing reporting processes. In its 2017 report, the Task Force emphasized the importance of transparency […]
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Posted in Accounting & Disclosure, Corporate Social Responsibility, Practitioner Publications
Tagged Climate change, Disclosure, Environmental disclosure, Risk, Risk assessment, Risk management, Sustainability
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Shareholder Protection and the Cost of Capital
Do the legal environment and the level of shareholder protection meaningfully influence the cost of capital? To shed some light on this issue, our recent article Shareholder Protection and the Cost of Capital (which is forthcoming in the Journal of Law and Economics) explores how changes in shareholders’ rights affect their required risk premium, which […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research, Securities Litigation & Enforcement, Securities Regulation
Tagged Agency costs, Capital markets, Cost of capital, Derivative suits, Disclosure, Information environment, Insider trading, Investor protection, Risk-taking, Securities litigation, Shareholder rights, Shareholder suits, State law
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SEC Staff Guidance on Shareholder Proposals: A Murky Path Forward
In November 2017, the staff of the Division of Corporation Finance (Staff) of the Securities and Exchange Commission (SEC) issued guidance concerning companies’ ability to exclude shareholder proposals from their proxy statements under the “ordinary business” and “relevance” grounds of Rule 14a-8. In particular, Staff Legal Bulletin No. 14I (SLB 14I) invited companies to include […]
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Posted in Boards of Directors, Corporate Elections & Voting, Executive Compensation, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Boards of Directors, Executive Compensation, Incentives, No-action letters, Rule 14a-8, SEC, SEC rulemaking, Securities regulation, Shareholder proposals, Shareholder voting
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How Boards Govern Disruptive Technology—Key Findings from a Director Survey
Technology can enable innovation and disrupt existing business models. Many corporate leaders are increasingly considering how technology can improve operational efficiencies, create new products and services, and help their organizations enter untapped markets. They are also surveying the landscape for competitive entrants seeking to disrupt their industry. Of course, adopting new technology can be challenging […]
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Posted in Accounting & Disclosure, Boards of Directors, Practitioner Publications
Tagged Cybersecurity, Innovation, Risk management, Surveys, Tech companies
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Deal Insurance: Representation & Warranty Insurance in M&A Contracting
Parties to M&A transactions now commonly purchase insurance against breaches of the reps and warranties. In a forthcoming article, I study Representation and Warranty Insurance (“RWI”) in the U.S. market using two empirical methodologies. First, I survey nearly 100 market participants in the market—insurers, brokers, lawyers, and private equity managers. And second, I analyze the […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Empirical Research, Mergers & Acquisitions, Private Equity
Tagged Adverse selection, Agency costs, Insurance, Mergers & acquisitions, Moral hazard, Private equity, R&W insurance, Risk management
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SEC Rules and Guidance for Broker-Dealers and Investment Advisers
On June 5, 2019, the Securities and Exchange Commission (the “SEC”) voted 3-1 to adopt the highly anticipated rulemaking package addressing investment adviser and broker-dealer standards of conduct. The package includes final versions of (i) the SEC’s interpretation of the standard of conduct for investment advisers (“Final Interpretation”), (ii) new rules to require registered advisers […]
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Posted in Accounting & Disclosure, Legislative & Regulatory Developments, Practitioner Publications, Securities Regulation
Tagged Broker-dealers, Compliance & ethics, Conflicts of interest, Disclosure, Fiduciary duties, Investment advisers, Regulation Best Interest, SEC, SEC rulemaking, Securities regulation
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Irrelevance of Governance Structures
The central theme in the theory of corporate governance is that allocating more control rights to shareholders will allow them to hold disloyal managers accountable and reduce agency costs. The common empirical prediction that follows is that a weak governance structure will be associated with weak firm value and performance due to high agency costs. […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Empirical Research, Institutional Investors
Tagged Accountability, Agency costs, Common ownership, Control rights, Firm performance, Institutional Investors, Management, Ownership, Shareholder rights, Shareholder value
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