The number of public activist campaigns increased sharply in 1H 2018, following a slowing trend in 2016 and 2017 as compared to 2014 and 2015. There were roughly 150 campaigns globally in 1H 2018, up from about 100 in 1H 2017...
On August 15, 2018, U.S. Senator Elizabeth Warren of Massachusetts introduced proposed legislation, the Accountable Capitalism Act, in the U.S. Senate. The legislation would require all U.S. corporations with $1 billion or more in annual revenues to obtain a federal charter as a “United States corporation” and would obligate corporate directors to consider the interests of all corporate stakeholders in their corporate governance activities...
Recently, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on various legislative proposals aimed at improving corporate governance, including the Corporate Governance Reform and Transparency Act, H.R. 4015, that would regulate the activities of proxy advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis...
With the college football season recently coming to a close, there’s no question who’s Number 1 on the field. When it comes to the top schools for turning out board members at public companies, there are also a couple of clear winners...
As 2017 draws to a conclusion and we reflect on the evolution of corporate governance since the turn of the millennium, a recurring question percolating in boardrooms and among shareholders and other stakeholders, academics and politicians is: what’s next on the horizon for corporate governance? In many respects, we seem to have reached a point of relative stasis. The governance and takeover defense profiles of U.S. public companies have been transformed by the widespread adoption of virtually all of the “best practices” advocated to enhance the rights of shareholders and weaken takeover defenses.
At the end of each year, Russell Reynolds Associates interviews over 30 institutional and activist investors, pension fund managers, public company directors, proxy advisors, and other corporate governance professionals in five key markets regarding the trends and challenges that public company boards will face in the following year.
Two ratios often cited to support the argument that CEO pay is too high are:
Gregory Taxin is Managing Director at Spotlight Advisors. This post is based on a publication which originally appeared in Corporate Board Member magazine. Related research from the Program on Corporate Governance includes The Long-Term Effects of Hedge Fund Activism by Lucian Bebchuk, Alon Brav, and Wei Jiang (discussed on the Forum here ); The Myth that Insulating Boards Serves Long-Term Value by Lucian Bebchuk (discussed on the Forum here ); and Who Bleeds When the Wolves Bite...
based on an excerpt from a recent Vanguard publication by Mr. Booraem, and an open letter to directors of public companies worldwide by Mr. McNabb...
For 2017 shareholder meetings, shareholders have submitted approximately 827 proposals, which is significantly less than the 916 proposals submitted for 2016 shareholder meetings and the 943 proposals submitted for 2015 shareholder meetings...
In Search of Lost Time: What if Delaware Had Not Adopted Shareholder Primacy? Posted by David J. Berger, Wilson Sonsini Goodrich & Rosati. This post is based on his recent paper , forthcoming as a chapter in The Corporate Contract in Changing Times...
Over the past 15 years, the methods of compensating non-employee directors have changed in tandem with the risk and workload of being a director.
This year’s Survey, the 14th in our series, examines some of the most important governance and executive compensation practices facing boards today and identifies best practices and emerging trends. Our analysis will provide you with insights into how companies approach governance issues ...
For directors of public companies with foreign operations, “FCPA” is a dreaded acronym. In recent years, compliance with the Foreign Corrupt Practices Act has become a key area of focus for boards and management. Enforcement of the FCPA has increased markedly since 2004, and the U.S. Securities and Exchange Commission and the Department of Justice have made it clear that they intend to prosecute individuals as well as public companies ...
Corporate Culture and the Role of Boards Posted by UK Financial Reporting Council , on Saturday, August 13, 2016 More from: UK Financial Reporting Council This post is based on a report produced by the United Kingdom’s Financial Reporting Council. The FRC’s mission is to promote high quality corporate governance and reporting to foster investment. The UK has a good reputation in this field which has underpinned a substantial amount of business success, but it is by no means perfect.....
Posted by Ethan A. Klingsberg, Cleary Gottlieb Steen & Hamilton LLP , on Wednesday, August 3, 2016 More from: Elizabeth Bieber , Ethan Klingsberg , Steven Kaiser , Cleary Gottlieb Ethan A. Klingsberg is a partner in the New York office of Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb publication by Mr. Klingsberg, Steven J. Kaiser , and Elizabeth Bieber ....
Comparative Corporate Governance: Old and New Posted by Martin Gelter, Fordham University , on Wednesday, August 3, 2016 More from: Martin Gelter Martin Gelter is Professor of Law at Fordham University School of Law. This post is based on a forthcoming book chapter by Professor Gelter...
Corporate directors who suspect malfeasance by managers may face conflicting incentives. On the one hand, encouraging transparency and demonstrating diligence by pressing for the investigation and disclosure of ...
With mounting activist pressure and the increasing “activation” of large institutional investors continuing to transform corporate governance in the United States and many markets around the world, boards have had no choice but to become more investor savvy.We have seen this trend firsthand in our work with boards, as well as in conversations with institutional investors. The most forward-thinking boards are doing what it takes to thrive in the new environment ...
Women on Boards in Finance and STEM Industries Posted by Renee Adams, University of New South Wales and Tom Kirchmaier, London School of Economics , on Monday, July 11, 2016 More from: Renee Adams , Tom Kirchmaier Renee Adams is Professor of Finance at the University of New South Wales and Tom Kirchmaier is a Researcher at the London School of Economics. This post is based on a recent article by Professor Adams and Dr. Kirchmaier.....
The SEC has an impact on corporate governance through its disclosure powers—requiring public companies to provide investors with the information they need to make informed investment and voting decisions. The SEC thus does not decide who may sit on a corporate board, but our rules do require disclosure about those who serve ...
How Economic Attention Deficit Disorder Infected the Corporate Boardroom Posted by Jon Lukomnik, Investor Responsibility Research Center Institute , on Wednesday, June 22, 2016 Jon Lukomnik is the Executive Director of the Investor Responsibility Research Center Institute. The ideas in this post related to his new book, What They Do With Your Money: How the Financial System Fails Us and How to Fix It (Yale University Press), co-authored with Stephen Davis and David Pitt-Watson .....
The level and structure of executive compensation has been a frequently debated topic among politicians, CEOs, and academics since the financial crisis of 2007-2009. Critiques of compensation practices at financial services companies often attribute the crisis at least in part to incentive pay that purportedly encourages excessive risk taking ...