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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
The “Reasonable Investor” of Federal Securities Law
For decades public companies have complained that the enormous damage awards threatened in securities class actions renders settlement of even non-meritorious cases rational, promoting the filing of frivolous suits. This argument convinced Congress to enact the Private Securities Litigation Reform Act of 1995 (PSLRA), which includes a variety of measures designed to deter the filing […]
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Posted in Academic Research, Comparative Corporate Governance & Regulation, Securities Litigation & Enforcement
Tagged Class actions, Common-law claims, Materiality, PSLRA, Rule 10b-5, SEC, Securities Act, Securities fraud, Securities litigation, Securities regulation, Shareholder suits
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Significant Activity in All Sectors as Financial Institutions Innovate and Evolve
2016 began with a flurry of bank M&A activity that decelerated somewhat as fears of Brexit and an overall slowdown in global growth overtook the financial markets and dampened expectations of a near-term interest rate increase. While commodity and stock prices have gradually recovered, the yield curve is now flatter than when the year began. […]
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Posted in Banking & Financial Institutions, Boards of Directors, Executive Compensation, Mergers & Acquisitions, Practitioner Publications, Securities Regulation
Tagged Antitrust, Asset management, Banks, Boards of Directors, Executive Compensation, Financial institutions, Financial regulation, Financial technology, Mergers & acquisitions, Securities regulation, Shareholder activism, Shareholder value
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Second Circuit Clarifications on Key Investor Protections
The Second Circuit Court of Appeals this week handed down two decisions important to investor rights: In re Vivendi, S.A. Securities Litigation (“Vivendi“) and GAMCO Investors, Inc. v. Vivendi Universal, S.A. (“GAMCO“). In Vivendi, the Second Circuit (i) clarified the requirements for proving “loss causation” in securities fraud cases and (ii) endorsed the “inflation-maintenance” theory of liability, under which defendants […]
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Posted in Court Cases, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Fraud-on-the-Market, Investor protection, Liability standards, Section 10(b), Securities enforcement, Securities fraud, Securities litigation, Shareholder suits, U.S. federal courts
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Optimal Fee-Shifting Bylaws
After the financial crisis of 2008, there was an explosion of lawsuits by shareholders against their corporations, particularly in mergers and acquisitions transactions. Partly in response to this “flood” of litigation, a number of corporations began devising strategies to deter shareholder lawsuits. One strategy was the fee-shifting bylaw, which would obligate the plaintiff-shareholder to reimburse […]
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Posted in Academic Research, Boards of Directors, Comparative Corporate Governance & Regulation, Mergers & Acquisitions, Securities Litigation & Enforcement
Tagged Attorneys' fees, Boards of Directors, Charter & bylaws, Delaware articles, Delaware cases, Delaware law, Derivative suits, Fee-Shifting, Merger litigation, Mergers & acquisitions, Securities litigation, Shareholder suits
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It’s Commonsense to Have a U.S. Corporate Governance Code
Over the summer, one of the most interesting pieces of corporate governance literature was the Commonsense Corporate Governance Principles. The publication was the result of meetings between a group of leading executives of public companies, asset managers, a public pension fund, and a shareholder activist. The principles themselves may not have broken new ground—they addressed such […]
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Posted in Boards of Directors, Comparative Corporate Governance & Regulation, Corporate Elections & Voting, Institutional Investors, Practitioner Publications
Tagged Board composition, Board dynamics, Board turnover, Boards of Directors, Commonsense Principles, Diversity, Engagement, Institutional Investors, Management, Pension funds, Proxy advisors, Proxy voting, Shareholder voting
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One Year Later: The Yates Memo, False Claims Act and Director & Executive Liability
On September 19 and 27, 2016, the US Department of Justice announced two False Claims Act settlements that required corporate executives to make substantial monetary payments to resolve their liability. In the first, announced on September 19, North American Health Care Inc. (NAHC) and two individuals—its chairman of the board and a senior vice president […]
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Posted in Accounting & Disclosure, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Accountability, Compliance & ethics, DOJ, False Claims Act, Indemnification, Liability standards, Misconduct, Securities enforcement, Settlements, Yates memo
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Inside Safe Assets
In a rare bipartisan moment of the 2016 election season, a group of U.S. Senators introduced a bill late last month that would let municipal debt count among “High Quality Liquid Assets” (HQLA), the buffers banks must hold against liquidity shocks since the last financial crisis. The key argument for the bill cited in the […]
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Posted in Academic Research, Banking & Financial Institutions, Bankruptcy & Financial Distress, Financial Crisis, Financial Regulation, Securities Regulation
Tagged Bankruptcy, Bondholders, Bonds, Credit exposure, Debt contracts, Financial crisis, Financial reform, Liquidity, Municipal securities, Risk, Securities regulation, Shadow banking
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The EU’s New Reporting Rules—Creating An Informational Vacuum
Executives, fund managers and even politicians have criticised publicly traded companies’ undue focus on generating profits in the next quarter instead of making investments with good five-year prospects. To encourage these companies to take a longer-term perspective, several regulators have shifted corporate reporting requirements from quarterly to semi-annually. Most prominently, in 2013 the European Commission […]
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Posted in Academic Research, Accounting & Disclosure, International Corporate Governance & Regulation, Securities Regulation
Tagged Accounting, Earnings announcements, EU, Europe, Financial reporting, Firm performance, Information environment, International governance, Long-Term value, Market reaction, Short-termism
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Audit Committee Reporting to Shareholders in 2016
Audit committees have a key role in overseeing the integrity of financial reporting. Nevertheless, relatively little information is required to be disclosed by US public companies about the audit committee’s important work. Since our first publication in this series in 2012, we have described efforts by investors, regulators and other stakeholders to seek increased audit-related […]
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Posted in Accounting & Disclosure, Boards of Directors, Practitioner Publications, Securities Regulation
Tagged Accountability, Accounting, Audit committee, Boards of Directors, Disclosure, External auditors, Financial reporting, Securities regulation, Transparency, Voluntary Disclosure
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Does Corporate Governance Matter? Evidence from the AGR Governance Rating
Do better governed firms perform better than their peers? In the academic literature, numerous studies have tackled this question with mixed success. On the one hand, there appears to be a robust statistical association between governance indices based on anti-takeover provisions and future operating performance, see e.g. Bebchuk, Cohen, and Wang (2013). On the other […]
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Posted in Academic Research, Accounting & Disclosure, Comparative Corporate Governance & Regulation, Empirical Research
Tagged Board performance, Financial reporting, Firm performance, Firm valuation, Management, Market efficiency, Misreporting, Peer groups, Shareholder value, Stock returns
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