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

Chamber of Commerce Airs Grievances Related To Internal Controls Inspections

In recent months, issues related to internal control systems and reporting have taken on an increased profile and significance. For example, as previously noted by the authors here and here, the SEC has sought to prioritize compliance with internal controls by initiating a growing number of investigations into companies based on allegations of inadequate internal controls. By way […]

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Shareholder Proposal Developments During the 2015 Proxy Season    

This post provides an overview of shareholder proposals submitted to public companies for 2015 shareholder meetings, including statistics, notable decisions from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) on no-action requests, and information about litigation regarding shareholder proposals. I. Shareholder Proposal Statistics and Voting Results A. Shareholder Proposals Submitted According […]

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SEC Proposes Compensation Clawback Rules

On July 1, 2015, the Securities and Exchange Commission (SEC), by a 3-2 vote, proposed long-awaited rules [1] mandated by Section 954 of the Dodd-Frank Act that would direct the national securities exchanges and associations to establish listing standards that would require any company to adopt, disclose and comply with a compensation clawback policy as […]

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Revisiting the Regulatory Framework of the US Treasury Market

Yesterday [July 13, 2015], staff members of the federal agencies that comprise the Interagency Working Group for Treasury Market Surveillance (“Working Group”) issued a joint report concerning the so-called “flash crash” that occurred in the U.S. Treasury market on October 15, 2014 (the “Report”). I commend the staff of all the agencies for their hard […]

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SEC Seeks Input on Enhanced Disclosures for Audit Committees

At an open meeting held on July 1, 2015, the Securities and Exchange Commission (“SEC”) issued a concept release addressing the prospect of enhanced disclosures for audit committees. The much-publicized concept release is available here and requests comment on a number of possible changes to existing SEC disclosure requirements about the work of audit committees, […]

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Responding to Institutional Investor Requests for Access to Independent Directors

Recent statements by BlackRock, State Street, Vanguard and other institutional investors clearly articulate their expectation that companies should provide access to independent directors and should adopt a structure for regular investor/director communications. In responding to these requests, there is a range of approaches that companies could adopt which, in each case, should be tailored to […]

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Custodial Bank’s Technical Failure Results in Dell Stockholders Losing Appraisal Rights

In In re Appraisal of Dell (July 13, 2015), Vice Chancellor Laster, stating that he was compelled by Delaware Supreme Court precedent, applied a “strict” interpretation of the “Continuous Holder Requirement” of the Delaware appraisal statute. The Vice Chancellor, granting summary judgment in favor of Dell, Inc., held that the funds seeking appraisal of almost […]

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Four Takeaways from Proxy Season 2015

As the 2015 proxy season concludes, some key developments stand out. Most significantly, a widespread investor campaign for proxy access ignited the season, making proxy access the defining governance topic of 2015. The campaign for proxy access is closely tied to the increasing investor scrutiny of board composition and accountability, and yet—at the same time—the […]

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Money Market Mutual Funds: Stress Testing & New Regulatory Requirements

In July 2014, the Securities and Exchange Commission (SEC) adopted a package of reforms to the regulatory framework governing money market mutual funds. The SEC believes the new rules will enhance the safety and soundness of the money market fund industry during periods of market distress, when redemptions in some funds may increase substantially. [1] […]

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The Next Frontier for Boards, Oversight of Risk Culture

Over the past 15 years expectations for board oversight have skyrocketed. In 2002 the Sarbanes-Oxley Act put the spotlight on board oversight of financial reporting. The 2008 global financial crisis focused regulatory attention on the need to improve board oversight of management’s risk appetite and tolerance. Most recently, in the wake of a number of […]

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