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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 Christine Davine
- Renata J. Ferrari
- Andrew Freedman
- Ray Garcia
- Byron Georgiou
- Joseph Hall
- Jason M. Halper William P. Mills
- David Millstone
- Theodore Mirvis
- Philip Richter
- Elina Tetelbaum
- Sebastian Tiller
- Marc Trevino Jonathan Watkins
- Steven J. Williams
HLS Faculty & Senior Fellows
Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation
Including Relative Financial Results in ISS Reports
ISS announced on November 8th that proxy research reports published after February 1, 2017 will include a standardized comparison of the company’s CEO pay with a relative financial performance ranking versus peers as measured by multiple financial metrics including return on equity, return on assets, return on invested capital, revenue growth, EBITDA growth, and growth […]
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Posted in Accounting & Disclosure, Corporate Elections & Voting, Executive Compensation, Practitioner Publications, Securities Regulation
Tagged CD&A, Disclosure, Executive Compensation, Executive value, Financial reporting, Firm performance, ISS, Management, Pay for performance, Peer groups, Proxy advisors, Proxy voting, Shareholder value
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New Theory in Corporate Governance Undermines Theories Relied on by Proponents of Short-Termism and Shareholder Activism
Since the mid-1970’s the agency-cost theory, popularized by Michael Jensen, has been used and gilded by academics to justify and promote shareholder-centric corporate governance. The agency cost theory, along with Eugene Fama’s efficient market theory and Milton Friedman’s 1970 dictum that the sole purpose of the business corporation is to maximize profits for its shareholders, […]
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Posted in Boards of Directors, Comparative Corporate Governance & Regulation, Corporate Elections & Voting, Practitioner Publications
Tagged Agency costs, Bebchuk-Brav-Jiang study, Boards of Directors, General governance, Long-Term value, Management, Principal costs, Shareholder activism, Shareholder rights, Shareholder value, Shareholder voting, Short-termism
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When Is a “Final Offer” Not Final?
The battle to take control of SVG Capital was a good example of how the UK’s Takeover Panel operates on a pragmatic “principles” basis rather than on a strict rules basis. And it confirmed the importance, and benefits, of participants in UK public takeover transactions discussing their tactics with the Panel prior to announcing any […]
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Posted in Academic Research, International Corporate Governance & Regulation, Mergers & Acquisitions
Tagged Bidders, International governance, Mergers & acquisitions, Offer pricing, Takeovers, Target firms, Tender offer, UK, UK Takeover Code
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Weekly Roundup: November 18–November 24, 2016
How Strong Stakeholder Bonds Can Help Firms Avoid a Crisis Posted by Sinziana Dorobantu, NYU Stern School of Business, on Friday, November 18, 2016 Tags: Engagement, Incentives, Information environment, Market reaction, Nonprofits, Public perception, Reputation, Shareholder activism, Social networks, Stakeholders, Transparency The U.S. Legal and Regulatory Environment Under a Trump Administration Posted by Skadden, Arps, […]
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Posted in Weekly Roundup
Tagged Weekly Roundup
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Negotiating Appraisal Conditions in Public M&A Transactions
Appraisal rights in public M&A transactions have recently garnered greater attention, particularly in Delaware. As a result, more attention is being paid to the possible inclusion of a closing condition protecting the acquiror against excessive use of appraisal rights, and this should lead to careful attention being paid to the negotiation and drafting of any […]
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Posted in Mergers & Acquisitions, Practitioner Publications
Tagged Acquisition agreements, Appraisal rights, Arbitrage, Delaware cases, Delaware law, DGCL, Fair values, Fairness review, Firm valuation, In re Appraisal of Dell, Merger litigation, Mergers & acquisitions, Shareholder suits
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Second Circuit: Standard Lock-Up Agreements Do Not Form a “Group”
On November 3, 2016, in an appeal arising out of the 2012 initial public offering (“IPO”) of Facebook, Inc. (“Facebook”), the Second Circuit ruled that standard lock-up agreements between lead underwriters and pre-IPO shareholders in advance of an IPO do not, without more, render those parties a “group” within the meaning of Section 13(d) of […]
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Posted in Banking & Financial Institutions, Court Cases, Practitioner Publications, Securities Regulation
Tagged Exchange Act, Investment banking, IPOs, Liability standards, Lock-up agreements, SEC, Section 13(d), Securities regulation, Shareholder suits, U.S. federal courts, Underwriting
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Exchange Traded Funds (ETFs)
Since the mid-1990s, exchange traded funds (ETFs) have become a popular investment vehicle due to their low transaction costs and intraday liquidity. ETFs issue securities that are traded on the major stock exchanges, and, for the most part, these instruments aim to replicate the performance of an index. ETFs have shown spectacular growth. By mid-2016, […]
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Posted in Academic Research, Banking & Financial Institutions
Tagged Arbitrage, Asset management, Capital markets, Derivatives, Exchange-traded funds, Fund managers, High-frequency trading, Information asymmetries, Information environment, Liquidity, Market efficiency, Mutual funds, Stock analysts
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How the Influx of Dividend-Minded Shareholders Will Impact Shareholder Activism
2016 has been the year of the dividend. Fixed income investors seeking higher yields have moved into dividend-paying common stocks, and dividends have replaced earnings as the primary factor determining the movement of stock prices. As a result public corporations have acquired a sizeable body of new shareholders for whom increased dividends are more important […]
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Posted in Boards of Directors, Institutional Investors, Practitioner Publications
Tagged Boards of Directors, Capital allocation, Dividends, Firm performance, Institutional Investors, Long-Term value, R&D, Repurchases, Shareholder activism, Shareholder value, Short-termism, Stakeholders
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Beyond the Personal Benefit Test: The Economics of Tipping by Insiders
In Dirks v. SEC, the U.S. Supreme Court ruled against the Securities and Exchange Commission and exonerated securities analyst Raymond Dirks from charges that he illegally passed along insider information garnered from a tipper, Ronald Secrist. Secrist’s tip concerned the existence of a massive, ongoing fraud at his former employer, the giant insurance company Equity […]
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Posted in Academic Research, Court Cases, Securities Litigation & Enforcement, Securities Regulation
Tagged Inside information, Insider trading, Misconduct, Rule 10b-5, SEC, SEC enforcement, Securities enforcement, Securities fraud, Securities regulation, Social capital, Social networks, Supreme Court
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