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

Directors Should Communicate with Shareholders

To demonstrate their effectiveness, corporate boards should increase transparency, provide an annual report of boardroom activities and take charge of their relations with shareholders. With shareholders continuing to press for ever-deepening levels of engagement, companies must find a way to answer the most basic question of corporate governance: “How effective is the board of directors?” […]

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New Evidence on Compensation Consultants and CEO Pay

In 2013, CEOs in S&P 500 firms were paid, on average, over 200 times the average worker’s salary in their firms. To avoid or minimize public outrage, managers have a substantial incentive to obscure and try to legitimize their excessive compensation. One way of doing so is to have “independent” compensation consultants recommend higher pay […]

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SEC Whistleblower Program Achieves Critical Mass

Two recent Dodd-Frank whistleblower awards suggest that the program is becoming the kind of “game changer” for law enforcement that many had predicted. The program, which took effect in August 2011, mandates the payment of bounties to persons who voluntarily provide information leading to a successful securities enforcement action in which more than $1 million […]

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How Do Bank Regulators Determine Capital Adequacy Requirements?

The incentive to take socially costly financial risks is inherent in banking: because of the interconnected nature of banking, one bank’s failure can increase the risk of failure of another bank even if they do not have a contractual relationship. If numerous banks collapse, the sudden withdrawal of credit from the economy hurts third parties […]

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SEC Enforcement Actions Regarding Section 16 Reporting Obligations

Last month, the SEC announced that it brought enforcement actions primarily relating to Section 16(a) under the Securities Exchange Act against 34 defendants. The defendants were 13 individuals who were or had been officers or directors of public companies, five individual investors, ten investment funds/advisers and six public companies. This post briefly discusses several noteworthy […]

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Towards a “Rule of Law” Approach to Restructuring Sovereign Debt

In a landmark vote, the United Nations General Assembly overwhelmingly decided on September 9 to begin work on a multilateral legal framework—effectively a treaty or convention—for sovereign debt restructuring, in order to improve the global financial system. The resolution was introduced by Bolivia on behalf of the “Group of 77” developing nations and China. In […]

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Posted in Academic Research, Bankruptcy & Financial Distress, Financial Crisis, International Corporate Governance & Regulation | Tagged , , , , , , , , | 1 Comment

Opening Remarks at Investor Advisory Committee

Good morning, and welcome to today’s [October 9, 2014] meeting of the Investor Advisory Committee. I want to touch briefly today on the Commission’s rulemaking agenda since you last met, mention a few other developments and give a brief update on the status of our consideration of your recommendations. Rulemaking Agenda The Commission has completed […]

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Corporate Governance Enforcement in the Middle East and North Africa

As an echo of the last financial crisis, the two themes that have arguably dominated the corporate governance debate globally are investor activism and corporate governance enforcement. Recent years have seen by all accounts the highest rates of institutional investor activism on a range of issues such as executive remuneration, non-financial disclosure and board composition, […]

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Posted in International Corporate Governance & Regulation, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation | Tagged , , , , , , | 1 Comment

Cross-Border Recognition of Resolution Actions

On September 29, 2014, the Financial Stability Board (the “FSB”) published a consultative document concerning cross-border recognition of resolution actions and the removal of impediments to the resolution of globally active, systemically important financial institutions (the “Consultative Document”). The Consultative Document encourages jurisdictions to include in their statutory frameworks seven elements that would enable prompt […]

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Short-Termism

Last Monday I ventured into the belly of the beast by presenting the attached decks (available here and here) in Professor Bebchuk’s class at Harvard Law School. The class and discussion focused on short-termism, using the Airgas case as a jumping off point (see first deck available here) to the broader governance issues canvassed by […]

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