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

Guiding Principles of Good Governance

The Global Network of Director Institutes (GNDI), the international network of director institutes, has issued a new perspectives paper to guide boards in looking at governance beyond legislative mandates. The Guiding Principles of Good Governance were developed by GNDI as part of its commitment to provide leadership on governance issues for directors of all organisations […]

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Dealing with Director Compensation

Due to a recent Delaware Chancery Court ruling, the topic of director compensation currently is facing an uncharacteristic turn in the spotlight. Though it receives relatively little attention compared to its higher-profile cousin—executive compensation—director compensation can be a difficult issue for boards if not handled thoughtfully. Determining the appropriate form and amount of compensation for […]

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Delaware Court: Compensation Awards to Directors Subject to Entire Fairness

In Calma v. Templeton, the plaintiff alleged that a board of directors breached their fiduciary duties in awarding themselves restricted stock units (RSUs) pursuant to a stockholder-approved equity incentive compensation plan. The Court of Chancery held on a motion to dismiss that (i) the directors were interested in the award of the RSUs, and (ii) […]

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Human Rights Through A Corporate Governance Lens

Human rights [1] are attracting increasing attention from a corporate governance perspective as a dimension of both business ethics and enterprise risk management for companies. Indeed, the ethical and risk dimensions are in many ways intertwined, insofar as ethical lapses or inattention to human rights practices by companies may not only breach the human rights […]

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Modernizing and Enhancing Investment Company and Investment Adviser Reporting

Good morning, everyone. This is an open meeting of the Securities and Exchange Commission on May 20, 2015 under the Government in the Sunshine Act. The Commission today will consider two recommendations of the staff to modernize and augment the information reported by both registered investment companies, which include mutual funds and ETFs, and investment […]

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Effective Regulatory Oversight and Investor Protection Requires Better Information

It is said that, “knowledge is power.” Knowledge, however, requires information. And there is no doubt we live in an age of information. The advent of the Internet and the breathtaking technological advances we have witnessed over the last few decades have given us access to more information than at any time in history. The […]

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The Importance of Merger Price and Process in Delaware Appraisal Actions

On April 30, 2015, the Delaware Court of Chancery issued a post-trial opinion in which it rejected an attempt by dissenting shareholders to extract extra consideration for their shares above the merger price through appraisal rights. See Merlin Partners LP v. AutoInfo, Inc., Slip. Op. Apr. 30, 2015, Case No. 8509-VCN (Del. Ch. Apr. 30, […]

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More than 300 Research Papers Have Applied the Entrenchment Index of Bebchuk, Cohen and Ferrell (2009)

As of May 2015, more than 300 research studies have applied the Entrenchment Index put forward in a study published by Lucian Bebchuk, Alma Cohen and Allen Ferrell, What Matters in Corporate Governance. The papers using the Entrenchment Index, including many papers in leading journals in law, economics and finance, are listed here. The Bebchuk-Cohen-Ferrell […]

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DuPont’s Victory in the Proxy Fight with Trian

On May 13, 2015, E. I. du Pont de Nemours and Company, a major chemical company with a market cap of approximately $68 billion, defeated a proxy campaign run by Trian Fund Management, L.P., the activist fund led by Nelson Peltz that owns approximately 2.7% of DuPont. Trian was seeking four seats on DuPont’s board […]

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Delaware Court Strengthens Protections for Independent Directors

The Delaware Supreme Court held last week that a plaintiff seeking monetary damages from an independent, disinterested director protected by an exculpatory charter provision must specifically plead a non-exculpated claim against the director to survive a motion to dismiss. [1] This rule applies regardless of the standard of review applied to the board’s conduct in […]

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