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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
Soft Shareholder Activism
The modus operandi of a typical activist investor is to target a public company and propose major changes to its strategy, financial policy, operations, and personal. To defend themselves against these proposals, companies use poison pills, staggered boards, dual-class structures, and other measures. Securities regulation and disclosure requirements also limit the power of activists. In […]
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Posted in Academic Research, Boards of Directors, Corporate Elections & Voting, Empirical Research, Institutional Investors, Mergers & Acquisitions
Tagged Board communication, Boards of Directors, Engagement, Exit, Information environment, Shareholder activism, Shareholder communications
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Roundup of Key Federal Securities Litigation Developments
The Scope of “Scheme Liability”: Supreme Court Grants Cert to Determine the Extent of Rule 10b-5 On June 18, 2018, the Supreme Court granted certiorari in Lorenzo v. Securities and Exchange Commission (Docket No. 17-1077), a case that considers the potential liability for a false statement that is not “made” by a person under the […]
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Posted in Accounting & Disclosure, Court Cases, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Regulation S-K, Rule 10b-5, SEC, SEC enforcement, Securities enforcement, Securities fraud, U.S. federal courts
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Audit: Radical Change on the Horizon?
Audit committee chairs may find resonance in the phrase “tragedy of the horizon”, an expression coined in 2015 by Bank of England governor Mark Carney, which refers to the paradox that arises when market actors must take urgent action to address a long-term risk—but have no observable short-term incentive to do so. Carney was talking […]
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Posted in Academic Research, Accounting & Disclosure, Boards of Directors, HLS Research, International Corporate Governance & Regulation
Tagged Accounting, Accounting standards, Audit committee, Audits, Boards of Directors, Compliance and disclosure interpretation, Environmental disclosure, ESG, Financial reporting, International governance, Oversight, PCAOB, SOX, Transparency
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Mutual Fund Board Connections and Proxy Voting
Mutual funds own 24 percent of the U.S equity market and are dominant players in proxy voting. If mutual funds were to vote their proxies to maximize firm value, they would play an important role in corporate governance. However, many funds may not find it optimal to invest resources to get informed about specific votes. […]
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Posted in Academic Research, Boards of Directors, Corporate Elections & Voting, Empirical Research, Institutional Investors
Tagged Boards of Directors, Conflicts of interest, Information asymmetries, Information environment, Institutional Investors, Management, Mutual funds, Proxy advisors, Proxy voting, Shareholder voting, Social networks
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ISS and Glass Lewis Policy Updates for the 2019 Proxy Season
Institutional Shareholder Services (ISS) and Glass Lewis & Co. (Glass Lewis) have updated their proxy voting policies for shareholder meetings held on or after February 1, 2019 (ISS) or January 1, 2019 (Glass Lewis). This post (i) summarizes the changes in proxy voting policies that apply to U.S. companies, (ii) discusses the practical implications of […]
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Posted in Boards of Directors, Corporate Elections & Voting, Institutional Investors, Practitioner Publications
Tagged Board composition, Boards of Directors, Director compensation, Diversity, Glass Lewis, Institutional Investors, ISS, Proxy advisors, Shareholder voting
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The Lifecycle Theory of Dual-Class Structures
We have recently placed on SSRN an academic presentation, The Lifecycle Theory of Dual-Class Structures, that we prepared for delivery as Lucian Bebchuk’s keynote address at the December 2018 ECGI-BIU conference on differential voting structures. The presentation focuses on the structure and influence of the lifecycle theory of dual-class structure introduced in Bebchuk and Kastiel, […]
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Posted in Academic Research, Corporate Elections & Voting, HLS Research, Securities Regulation
Tagged Agency costs, Capital structure, Controlling shareholders, Dual-class stock, Entrenchment, Incentives, IPOs, Ownership structure, Securities regulation, Shareholder voting, Tech companies
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Investment Returns and Distribution Policies of Non-Profit Endowment Funds
Endowment funds are repositories for gifts and operating surpluses generated by non-profit organizations. Often described by their parent organizations as “nest eggs” or “rainy day funds,” endowments invest in stocks, bonds, and alternative asset classes such as hedge funds and private equity, and they pay income to their parents to subsidize operating costs and capital […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research, Institutional Investors
Tagged Distributions, Dividends, Endowments, Hedge funds, Institutional Investors, Nonprofits
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Second Corwin Denial Due to Restatement Process
The Delaware Court of Chancery recently denied Corwin cleansing in a case involving the sale of a public company while it was engaged in a restatement of its prior audited financial statements. See In re Tangoe, Inc. S’holders Litig., C.A. No. 2017-0650-JRS (Del. Ch. Nov. 20, 2018). If this sounds familiar, that is because it […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Boards of Directors, Business judgment rule, Corwin, Delaware cases, Delaware law, Financial reporting, Merger litigation, Mergers & acquisitions, Restatements, Schedule 14D
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Material Adverse Effect Clauses and the Delaware Supreme Court
[On December 7,] the Delaware Supreme Court issued a three-page order in Akorn, Inc. v. Fresenius Kabi AG, No. 535, 2018 (Del. Dec. 7, 2018), affirming the Court of Chancery’s 246-page opinion finding that Fresenius Kabi AG validly terminated its merger with Akorn, Inc., based on the existence of a material adverse effect (MAE). The affirmance confirms […]
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Posted in Court Cases, Mergers & Acquisitions, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Acquisition agreements, Delaware cases, Delaware law, Materiality, Merger litigation, Mergers & acquisitions, Securities regulation, Shareholder suits
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The Prescience of 5% of Investors: A Monsanto Case Study
Even though a proposal receives only a fraction of shareholder support, it may still be the best available opportunity to bring more foresight to investors, board, and management on an issue that may eventually prove costly to a company. Only a small portion of investors may be exercising prescience on risk management or governance issues […]
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