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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 Pay Ratio Rule: Preparing for Compliance
On August 5, 2015, the Securities and Exchange Commission (SEC) adopted its much-anticipated final rule implementing the pay ratio disclosure requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Section 953(b) of the Dodd-Frank Act instructed the SEC to adopt rules requiring reporting companies to disclose the median of […]
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Posted in Accounting & Disclosure, Executive Compensation, Legislative & Regulatory Developments, Practitioner Publications, Securities Regulation
Tagged Compensation committees, Compensation disclosure, Compensation ratios, Compliance and disclosure interpretation, Dodd-Frank Act, Executive Compensation, Management, Regulation S-K, SEC, SEC rulemaking, Securities regulation
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New Records in SEC Enforcement Actions
In late October, the Securities and Exchange Commission announced that under the leadership of chair Mary Jo White and enforcement director Andrew Ceresney, the SEC has continued to ramp up enforcement activity. In its 2015 fiscal year, the SEC reported filing a total of 807 actions for the year—including 507 independent enforcement actions, 168 follow-on […]
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Posted in Accounting & Disclosure, Legislative & Regulatory Developments, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Compliance & ethics, FCPA, Insider trading, Investor protection, SEC, SEC enforcement, Securities enforcement, Securities fraud, Securities regulation, Whistleblowers
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Delaware Courts and the Law Of Demand Excusal
Delaware courts have recently issued critical guidance regarding the contours of the demand excusal doctrine. The following cases outline the Delaware courts’ recent analyses on the issue. Delaware Supreme Court Clarifies Analysis For Determining Director Independence In Del. Cty. Emps. Ret. Fund v. Sanchez, Del. No. 702, 10/2/15, the Delaware Supreme Court clarified that, in […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Board independence, Boards of Directors, Conflicts of interest, Controlling shareholders, Delaware cases, Delaware law, Fiduciary duties, Merger litigation, Mergers & acquisitions, Social networks
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Quadrant v. Vertin: Determining Rights of Creditors
In Quadrant Structured Products Company, Ltd. v. Vertin (Oct. 20, 2015), the Delaware Court of Chancery, in a post-trial decision, rejected Quadrant’s challenges to transactions by Athilon Capital Corp., with Athilon’s sole stockholder (private equity firm Merced), after Athilon had returned to solvency following a long period of insolvency. Merced held all of Athilon’s equity […]
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Posted in Bankruptcy & Financial Distress, Boards of Directors, Court Cases, Practitioner Publications
Tagged Bankruptcy, Board independence, Boards of Directors, Business judgment rule, Debtor-creditor law, Delaware cases, Delaware law, Derivative suits, Distressed companies, Fiduciary duties, Liquidation, Repurchases
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Employee Rights and Acquisitions
In our paper, Employee Rights and Acquisitions, which was recently featured in the Journal of Financial Economics, we consider incentive conflicts involving employees, and how they may affect firms in the context of acquisitions. More specifically, we look at the effects of variation in employee protections on shareholder value, the choice of targets, and deal […]
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Posted in Academic Research, Empirical Research, Mergers & Acquisitions
Tagged Acquisitions, Agency costs, Conflicts of interest, Employees, Firm valuation, Incentives, Labor markets, Merger announcements, Mergers & acquisitions, Shareholder value, Target firms
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Merion Capital: Merger Price as a Factor in Appraisal Action
In a recent decision in an appraisal action, the Delaware Chancery Court reaffirmed the Court’s reluctance to substitute its own calculation of the “fair value” of a target company’s stock for the purchase price derived through arms-length negotiations, provided it resulted from a thorough, effective and disinterested sales process. The October 21, 2015 decision, Merion […]
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Posted in Court Cases, Mergers & Acquisitions, Practitioner Publications, Private Equity
Tagged Appraisal rights, Beneficial owners, Delaware cases, Delaware law, Fair values, Fiduciary duties, Firm valuation, Go-shop, Going private, Merger litigation, Mergers & acquisitions, Private equity, Shareholder activism, Short-termism
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Corporate Governance Responses to Director Rule Changes
Much of the corporate governance literature has been plagued by endogeneity problems. In our paper, Corporate Governance Responses to Director Rule Changes, which was recently made publicly available on SSRN, we use a law change as a natural experiment to test how firms adjust the choice and magnitude of governance tools given a floor level […]
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Posted in Academic Research, Boards of Directors, Comparative Corporate Governance & Regulation, Empirical Research, Executive Compensation, Securities Regulation
Tagged Agency costs, Board independence, Board turnover, Boards of Directors, Corporate governance, Executive Compensation, Interlocking boards, Outside directors, SOX
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SEC Disclosures by Foreign Firms
The U.S. Securities and Exchange Commission (SEC) established the ongoing reporting regime for U.S.-listed foreign firms when most of these filers were large, well-known companies that had a primary trading venue on a major foreign exchange. Accordingly, prior work argues that the SEC exempted these firms from producing quarterly and event-driven filings beyond those mandated […]
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Posted in Academic Research, Accounting & Disclosure, Comparative Corporate Governance & Regulation, Empirical Research, International Corporate Governance & Regulation, Practitioner Publications, Securities Regulation
Tagged Disclosure, Filings, Foreign firms, Form 6-K, Information asymmetries, Information environment, International governance, Investor protection, Market reaction, SEC, Transparency
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On Secondary Buyouts
Twenty years ago, private equity (PE) firms seeking to exit sold their portfolio companies to another company in the same industry or organized an IPO. Nowadays, 40 percent of PE exits occur through secondary buyouts (SBOs), transactions in which a PE firm sells a portfolio company to another PE firm. The rise of SBOs has […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research, Private Equity
Tagged Agency costs, Buyouts, Capital allocation, Conflicts of interest, Fund managers, Incentives, IPOs, Partnerships, Private equity, Private funds, Shareholder value
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Director Independence and Risks for M&A Financial Advisors
On September 28 and October 1, 2015, the Delaware Court of Chancery issued decisions in Caspian Select Credit Master Fund Limited v. Gohl, C.A. No. 10244-VCN and In re Zale Corporation Stockholders Litigation, C.A. No. 9388-VCP. On October 2, 2015, the Delaware Supreme Court decided Delaware County Employees Retirement Fund v. Sanchez, No. 702. The […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Board independence, Boards of Directors, Controlling shareholders, Delaware cases, Delaware law, Derivative suits, Duty of care, Fiduciary duties, Financial advisers, Merger litigation, Mergers & acquisitions, Minority shareholders, Shareholder suits
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