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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
Controlling Externalities: Ownership Structure and Cross-Firm Externalities
Our new working paper on “Controlling Externalities: Ownership Structure and Cross-Firm Externalities” develops a general conceptual framework for understanding how firms’ ownership structure and corporate law affect the internalization of cross-firm externalities and proposes a new metric (called “Controller Wealth Concentration”) designed to provide a simple characterization of the incentives of controllers in this regard. […]
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Posted in Academic Research, Empirical Research, ESG, Institutional Investors
Tagged Climate change, Controlling shareholders, Dual-class stock, Environmental disclosure, ESG, Externalities, Index funds, Institutional Investors, Ownership, Ownership structure
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2021 Proxy Season Review: Say on Pay Votes and Equity Compensation
Say-on-Pay Votes: Public companies continue to perform strongly, with support levels averaging 93% and less than 3% of companies failing Continuing turnover in failed votes, with 79% of companies that failed last year achieving over 70% support this year and no companies failing in both 2020 and 2021 ISS negative recommendations highlight continued importance of […]
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Posted in Corporate Elections & Voting, Executive Compensation, Institutional Investors, Practitioner Publications
Tagged Equity-based compensation, Executive Compensation, Glass Lewis, Incentives, Institutional Investors, ISS, Proxy advisors, Say on pay, Shareholder voting
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Three Opinions on Fraud on the Board
In a footnote in a two-page order issued in 2018, the Delaware Supreme Court quietly reminded corporate law practitioners that, per the 1989 case of Mills Acquisition v. Macmillan, a complaint seeking post-closing Revlon damages can survive a motion to dismiss without pleading nonexculpated breaches of fiduciary duty by a majority of directors so long […]
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Posted in Boards of Directors, Court Cases, Mergers & Acquisitions, Practitioner Publications, Securities Litigation & Enforcement
Tagged Boards of Directors, Delaware cases, Delaware law, Fairness review, Merger litigation, Mergers & acquisitions, Securities fraud, Securities litigation
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The Coming Shift in Shareholder Activism: From “Firm-Specific” to “Systematic Risk” Proxy Campaigns (and How to Enable Them)
A new form of shareholder activism has appeared almost out of the blue. Classic shareholder activism (which I will call “firm specific” activism) depends on an entrepreneur (usually an activist hedge fund) who assembles a 5% (or greater) block of stock, files a Schedule 13D that announces its plans for the target company (which might […]
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Posted in Academic Research, Boards of Directors, Corporate Elections & Voting, ESG, Institutional Investors
Tagged Boards of Directors, Climate change, Engine No. 1, ESG, ExxonMobil, Hedge funds, Institutional Investors, Proxy contests, Shareholder activism, Shareholder voting, Sustainability
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Getting Back to the Long Term
With the coronavirus pandemic (we hope) tapering off this summer, boards are looking ahead to more normal compensation programs for 2022. They can pull back on the extraordinary measures and structures of 2020–21 and return to their long-term paths to strengthen or transform their organizations. Those paths were already a bit obscured by ongoing disruption […]
Click here to read the complete postFive Simple Rules for Post-IPO Pay
You’re chair of the compensation committee for the most recent successful initial public offering (IPO). Pre-IPO shareholders and employees are sitting on large unrealized gains. Your visionary leaders, the team that carries the company’s DNA, have just realized wealth beyond all expectations. That’s great! But now you have a problem: with less financial incentive—plus the […]
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Posted in Executive Compensation, Practitioner Publications
Tagged Equity-based compensation, Executive Compensation, Human capital, Incentives, IPOs, Management
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49 Law Firms Respond to Investment Company Act Lawsuits Targeting SPACs
Recently a purported shareholder of certain special purpose acquisition companies (SPACs) initiated derivative lawsuits asserting that the SPACs are investment companies under the Investment Company Act of 1940, because proceeds from their initial public offerings are invested in short-term treasuries and qualifying money market funds. Under the provision of the 1940 Act relied upon in […]
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Posted in Mergers & Acquisitions, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Derivative suits, Investment Company Act, Merger litigation, Mergers & acquisitions, Securities litigation, Securities regulation, Shareholder suits, SPACs, Special purpose vehicles
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SEC Sanctions Company for Hypothetical Cyber Risk Factor
The SEC filed an enforcement action against a company for disclosing the risk that it “could” have a data privacy breach when it knew it already had experienced a breach. The action also shows the importance of software patch management, which can significantly reduce the number of incidents. On August 16, the Securities and Exchange […]
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Posted in Accounting & Disclosure, Practitioner Publications, Securities Litigation & Enforcement, Securities Regulation
Tagged Cybersecurity, Risk, SEC, SEC enforcement, Securities enforcement, Securities regulation
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Statement by Commissioner Crenshaw Regarding Information Bundling and Corporate Penalties
In March of this year, I gave a speech to the Council of Institutional Investors suggesting that the SEC should reconsider its approach to assessing penalties against corporate wrongdoers. Rather than calibrating penalties to actual misconduct, some Commissioners have viewed corporate benefits as a limiting constraint on penalty amounts. This approach posits that any penalty […]
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Posted in Practitioner Publications, Regulators Materials, Securities Litigation & Enforcement, Securities Regulation, Speeches & Testimony
Tagged Financial reporting, Information asymmetries, Information environment, Misconduct, Restatements, SEC, SEC enforcement, Securities enforcement, Settlements
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Silicon Valley 150 Risk Factor Trends Report
The SV150 is released each year by Lonergan Partners, a leading executive search firm based in Silicon Valley, and is comprised of the 150 largest public companies in Silicon Valley, based on annual sales. Key Changes in Risk Factor Disclosure Practices Under Amended Rules: Risk Factor Summary. Rather than decrease the total number of pages […]
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Posted in Accounting & Disclosure, Practitioner Publications
Tagged Disclosure, Form 10-K, Risk, Risk assessment, Risk disclosure, Surveys, Tech companies
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