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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 Christine Davine
- Renata J. Ferrari
- Andrew Freedman
- Ray Garcia
- Byron Georgiou
- Joseph Hall
- Jason M. Halper William P. Mills
- David Millstone
- Theodore Mirvis
- Philip Richter
- Elina Tetelbaum
- Sebastian Tiller
- Marc Trevino Jonathan Watkins
- Steven J. Williams
HLS Faculty & Senior Fellows
Author Archives: Harvard Law School Forum on Corporate Governance and Financial Regulation
The Importance of the SEC Disclosure Regime
The SEC is first and foremost a disclosure agency. As stated on the Commission’s website: “[t]he laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to […]
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Posted in Accounting & Disclosure, Institutional Investors, Practitioner Publications, Regulators Materials, Securities Regulation, Speeches & Testimony
Tagged Disclosure, Fiduciary duties, Institutional Investors, Proxy advisors, SEC, SEC rulemaking, Securities regulation, Shareholder voting
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Final Bank Capital Rules and Basel III Implementation
On July 2, 2013, the Board of Governors of the Federal Reserve System (the “FRB”) unanimously approved final rules (the “Final Rules”) establishing a new comprehensive capital framework for U.S. banking organizations [1] that would implement the Basel III capital framework [2] as well as certain provisions of the Dodd-Frank Wall Street Reform and Consumer […]
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Posted in Banking & Financial Institutions, Financial Regulation, Legislative & Regulatory Developments, Practitioner Publications
Tagged Banks, Basel Committee, Capital requirements, Debt, Dodd-Frank Act, FDIC, Federal Reserve, Financial institutions, Financial regulation, Risk
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Deferred Prosecutions and Corporate Governance
“Prosecutors in the boardroom” is a slogan reflecting an unintended early 21st century overlap of corporate governance and corporate criminal liability. Although exaggerated, the phrase reflects how prosecutors increasingly demand corporate governance reforms when settling criminal cases using deferred prosecution agreements (DPAs). While a growing body of scholarship seeks to put governance beyond the purview […]
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Posted in Academic Research, Securities Litigation & Enforcement
Tagged Compliance & ethics, Corporate crime, Deferred prosecution agreements, Governance reform
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Court Orders Company to Provide Privileged Communications to Dissident Director
The Delaware Court of Chancery, in Kalisman v. Friedman (Apr. 17, 2013), ordered the respective counsels for a company and for a special committee of the company’s board of directors to provide to a dissident director copies of their communications with the company’s other directors, as well as internal law firm communications. The dissident director […]
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Posted in Boards of Directors, Court Cases, Practitioner Publications
Tagged Attorney-client privilege, Board communication, Boards of Directors, Delaware cases, Delaware law, Special committees
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Optimal CEO Compensation with Search: Theory and Empirical Evidence
Two issues concerning executive compensation deserve particular attention. The first is how a firm’s risk affects the executive’s pay-to-performance sensitivity (hereafter PPS), i.e., the ratio of incentive pay to firm performance. Standard agency models predict that the PPS does not change with the firm’s risk if the agent is risk neutral and decreases with the […]
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Posted in Academic Research, Empirical Research, Executive Compensation
Tagged Agency model, Equilibrium, Executive Compensation, Incentives, Management, Risk, Shocks, Systemic risk
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Court of Chancery Criticizes Recommendation Provision in Merger Agreement
In In re NYSE Euronext Shareholders Litigation, C.A. No. 8136-CS (Del. Ch. May 10, 2013) (TRANSCRIPT), Chancellor Strine of the Court of Chancery, ruling from the bench following oral argument, declined to enjoin preliminarily a stockholder vote on the proposed merger between NYSE Euronext (“NYSE”) and IntercontinentalExchange, Inc. (“ICE”). The Court found that plaintiffs had […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications
Tagged Boards of Directors, Delaware cases, Delaware law, NYSE, Shareholder voting
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Communicating Private Information to the Equity Market before a Dividend Cut
How should firms communicate with the capital market in advance of corporate events? If firm insiders receive some private information that their firm may perform poorly in the near future, should they inform investors about this adverse information as soon as possible, or should they wait to release this information? Further, is the manner of […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research
Tagged Disclosure, Dividends, Inside information, Market reaction, Signaling, Stock returns
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SEC and Revlon Settle Allegations of Deceptive Acts
On June 13, 2013, the Securities and Exchange Commission (SEC) announced that it had reached a settlement with Revlon, Inc. (Revlon) regarding allegations that Revlon deceived minority shareholders in connection with a 2009 “going private” transaction. [1] Under Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 thereunder issuers are prohibited from […]
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Posted in Accounting & Disclosure, Court Cases, Mergers & Acquisitions, Practitioner Publications, Securities Litigation & Enforcement
Tagged Corporate fraud, Disclosure, Going private, Minority shareholders, SEC, SEC enforcement, Securities litigation
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CEO Compensation and Fair Value Accounting
In our paper, CEO Compensation and Fair Value Accounting: Evidence from Purchase Price Allocation, forthcoming in the Journal of Accounting Research, we investigate the influence of bonus intensity (i.e., the relative importance of bonus in CEO pay) and alternative accounting performance measures used in bonus plans on the allocation of purchase price post acquisitions. Upon […]
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Posted in Academic Research, Accounting & Disclosure, Empirical Research, Executive Compensation
Tagged Accounting, Bonuses, Executive Compensation, Fair values, Incentives, Management, Performance measures
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Facilitating General Solicitation at the Expense of Investors
Editor’s Note: Luis A. Aguilar is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Aguilar’s statement at a recent open meeting of the SEC; the full text, including footnotes, is available here. The views expressed in the post are those of Commissioner Aguilar and do not necessarily reflect […]
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