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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
Investment Banking Relationships and Analyst Affiliation Bias
In our study Investment Banking Relationships and Analyst Affiliation Bias: The Impact of the Global Settlement on Sanctioned and Non-Sanctioned Banks, we examine the impact of the 2003 Global Analyst Research Settlement on affiliation bias in sell-side analyst recommendations. Affiliation bias refers to the well-known finding that analysts are overly optimistic when their employers have […]
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Posted in Academic Research, Accounting & Disclosure, Banking & Financial Institutions, Empirical Research, Financial Regulation
Tagged Analyst communication, Analyst forecasts, Analysts, Banks, Conflicts of interest, Financial institutions, Financial regulation, Forecasting, Investment banking, Underwriting
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Why Financialized Corporate Governance Works Poorly
Corporate finance textbooks describe shareholders as the owners of a corporation and teach future managers how to create “shareholder value.” Increasing shareholder value is generally seen synonymous with increasing “shareholder wealth” as measured by the market value of their shares. The academic literature views conflicts between managers and shareholders as the main challenge of corporate […]
Click here to read the complete postReport Finds Shareholder Activism Evolving from Niche Strategy to Acceptance Across Investors
With 371 public campaigns against U.S. companies, according to a recent J.P. Morgan report on the new normal in shareholder activism, the 2017 proxy season proved to be fairly active. Although only 19 of the 54 actual contests that were completed by June went to vote, while the same number settled and the remainder were withdrawn, activists […]
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Posted in Boards of Directors, Corporate Elections & Voting, Institutional Investors, Practitioner Publications
Tagged Hedge funds, Institutional Investors, Proxy contests, Proxy season, Shareholder activism, Shareholder value, Shareholder voting
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Blockchain and Initial Coin Offerings: SEC Provides First U.S. Securities Law Guidance
Many initial coin offerings (ICOs) have recently raised large amounts of capital without the regulatory constraints of traditional initial public offerings (IPOs) and other capital-raising strategies. On July 25, the U.S. Securities and Exchange Commission (SEC) reminded the industry and so-called “disruptors” that federal securities laws may apply to some of these offerings. ICOs have […]
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Posted in Accounting & Disclosure, Practitioner Publications, Securities Regulation
Tagged Alternative entities, Blockchain, Broker-dealers, Capital formation, Commodities, Equity offerings, Financial technology, IPOs, Regulation D, SEC, Securities regulation
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How “Shareholder Value” is Killing Innovation
Conventional wisdom holds that the primary function of the stock market is to raise cash that companies use to invest in productive capabilities. The conventional wisdom is wrong. Academic research on corporate finance shows that, compared with other sources of funds, stock markets in advanced countries have in fact been insignificant suppliers of capital to corporations. What, […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Institutional Investors
Tagged Agency costs, Equity-based compensation, Executive Compensation, Incentives, Innovation, Long-Term value, Repurchases, Shareholder value, Short-termism
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Dissident Uses Disclosure Litigation as an Offensive Tactic in Successful Proxy Contest
In a recent proxy contest, a dissident stockholder brought a lawsuit against the company claiming that the company’s disclosures about certain incumbent directors were deficient. The court agreed, and enjoined the company’s annual stockholders meeting until at least 10 days after the company supplemented its disclosures. As a result of the court’s ruling, Institutional Shareholder […]
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Posted in Accounting & Disclosure, Boards of Directors, Corporate Elections & Voting, Court Cases, Institutional Investors, Practitioner Publications
Tagged Boards of Directors, Conflicts of interest, Delaware cases, Delaware law, Disclosure, Duty of candor, Institutional Investors, Institutional Shareholder Services Inc., Materiality, Proxy contests, Shareholder voting
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Recent Cases Demonstrate Need for Blockchain
A recent Delaware bill is poised to allow private Delaware corporations “use networks of electronic databases (examples of which are described currently as “distributed ledgers” or a “blockchain”) for the creation and maintenance of corporate records, including the corporation’s stock ledger.” The bill is a significant step towards the mainstream adoption of blockchain technology, which […]
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Posted in Mergers & Acquisitions, Practitioner Publications, Securities Regulation
Tagged Accounting, Appraisal rights, Beneficial owners, Blockchain, Clearing houses, Delaware law, DGCL, DGCL Section 262, Equity offerings, Financial technology, Mergers & acquisitions, Ownership, Securities regulation, Short sales
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Federal Class Action Securities Fraud Filings Hit Record Pace in H1 2017
Executive Summary Federal class action securities fraud filings hit a record pace in the first half of 2017. Over the past 18 months, more securities fraud class actions have been initiated in federal court than in any equivalent period since enactment of the Private Securities Litigation Reform Act of 1995 (PSLRA). Number and Size of […]
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Posted in Court Cases, Practitioner Publications, Securities Litigation & Enforcement
Tagged California, Class actions, Delaware cases, Merger litigation, Securities fraud, Securities litigation, State law
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Equity Issuances and Agency Costs: The Telling Story of Shareholder Approval Around the World
In the United States and a few other countries, management typically needs only board of director approval to issue common stock. But in most countries by law or stock-exchange rule, shareholders must vote to approve equity issuances undertaken by a certain method or exceeding a specified fractional threshold. In some countries shareholders must approve all […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Corporate Elections & Voting, International Corporate Governance & Regulation, Securities Regulation
Tagged Adverse selection, Agency costs, Capital markets, Equity offerings, International governance, Management, Market reaction, Securities regulation, Shareholder rights, Shareholder value, Shareholder voting, Signaling
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You Want Mandatory Arbitration in your Charter? Hey, Just Ask!
This is the opening paragraph from Tuesday’s column by Alison Frankel, one of my favorite legal columnists/bloggers: This could be the start of something huge: Securities and Exchange Commissioner Michael Piwowar said in a speech Monday to the Heritage Foundation that the SEC is open to the idea of allowing companies contemplating initial public offerings to include […]
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Posted in Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Arbitration, Charter & bylaws, Class actions, SEC, SEC rulemaking, Securities litigation, Securities regulation
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