Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation

Clarifying Appraisal Rights in Complicated Transactions

In City of North Miami Beach Genl. Employees’ Retirement Plan v. Dr Pepper Snapple Group, Inc. (June 1, 2018), the Court of Chancery held that appraisal rights are not available to the stockholders of Dr Pepper in connection with a transaction structure (involving a reverse triangular merger and a special cash dividend to the target […]

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Update on The New Paradigm: The Evolution of Stewardship Principles

When The New Paradigm (which we prepared for the World Economic Forum) and similar corporate governance frameworks were published in 2016-17, there was a broad consensus among business leaders and investors on the critical need to restore a long-term perspective. Pervasive and acute pressures for near-term financial results have been discouraging R&D, capex, employee training […]

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George Stigler on His Head: The Consequences of Restrictions on Competition in (Bank) Regulation

Like many pieces of financial legislation, the Dodd-Frank Act of 2010 was passed in the aftermath of a major financial crisis. Such crises have been a recurring feature of U.S. economic and political history since at least the nineteenth century. Nevertheless, it is only their aftermath, when the embers of the financial system are still […]

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Sandbagging in Delaware

In the private M&A context, “sandbagging” refers to a buyer, who despite having knowledge of a breach of representation or warranty by a seller at some time before closing, proceeds with the closing and then seeks indemnification from the seller for the breach of representation or warranty of which it had prior knowledge. The popular […]

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Observations on Culture at Financial Institutions and the SEC

Thank you Bill [Dudley] for that kind introduction and for inviting me to speak today [June 18,2018]. I’m planning to speak for fifteen or so minutes and to open the floor to questions. I want to extend my congratulations to Bill Dudley on a very successful term. You are now a member of the long […]

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Audit Tenure and the Timeliness of Misstatement Discovery

Is long auditor tenure beneficial or detrimental for audit quality? This is the question we are trying to address in this article. The impact of audit firm tenure and auditor rotation on audit quality have long been debated both within academia and by regulators in the US and globally. The debate has centered on two […]

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Understanding the Dutch Poison Pill

Ahold Delhaize, the biggest food retail group in the Benelux region with a rough market cap of €25 billion, is facing pushback from shareholders over a unique Dutch practice. The company recently announced that it had extended its call option agreement with a foundation called “Stichting Continuïteit Ahold Delhaize” or “SCAD” (roughly translated as the […]

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The Effect of Enforcement Transparency: Evidence from SEC Comment-Letter Reviews

Regulators increasingly rely on policies to disseminate their oversight actions, with the assertion that the disclosure of regulatory oversight activities can enhance the effect of enforcement by increasing third-party monitoring. However, the validity of this assertion has rarely been tested. In this study, we examine the effect of the public disclosure of the Securities and […]

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T. Rowe Price’s Investment Philosophy on Shareholder Activism

We are long-term investors. The core of the T. Rowe Price client-centered investment philosophy is to utilize proprietary research to guide active investment selection and diversification to reduce risk. For more than 80 years, our collaborative, disciplined approach has stood the test of time. Proprietary, fundamental research is a critical foundation of our equity investment […]

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Significant Revisions of the Volcker Rule

This week, the Board of Governors of the Federal Reserve System (the “Board”), the Federal Deposit Insurance Corporation (the “FDIC”), and the Office of the Comptroller of the Currency (the “OCC”) each issued a Notice of Proposed Rulemaking (“the Notice”) proposing a number of changes to the Volcker Rule. In summary, as described in more […]

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