At the outset of the pandemic, employees were the top priority of boards, second only to continued liquidity. That focus intensified during the social unrest following the death of George Floyd...
Fenwick has released its updated study about gender diversity on boards and executive management teams of the technology and life science companies included in the Silicon Valley 150 Index and very large public companies included in the Standard & Poor’s 100 Index...
In December 2020, Nasdaq asked the Securities and Exchange Commission (SEC) to approve new diversity rules. The aim is for Nasdaq-listed firms to have at least one director self-identifying as female and another self-identifying as an underrepresented minority or LGBTQ+. To avoid forced delisting, a firm must “diversify or explain”: either have two such diverse directors, or say why it does not. Nasdaq also wants firms to disclose every director’s self-identified race, gender, and LGBTQ+ status...
This spring marks the 20th anniversary of the beginning of the dramatic and cataclysmic demise of Enron Corp. A scandal of exceptional scope and impact...
Shareholder activism has proved to be a permanent part of the global capital markets. In 2009, activist hedge funds had approximately $39b in assets under management. Today, that number is closer to $130b...
Directors’ Career Concerns: Evidence from Proxy Contests and Board Interlocks Posted by Shuran Zhang (Hong Kong Polytechnic University), on Monday, March 29, 2021 More from: Shuran Zhang Shuran Zhang is Assistant Professor of Finance at Hong Kong Polytechnic University. her recent paper . Related research from the Program on Corporate Governance includes Does Shareholder Proxy Access Improve Firm Value?...
Cyrus Taraporevala is President and CEO of State Street Global Advisors. This post is based on his remarks at the HLS Program on Corporate Governance Virtual Roundtable Series...
Evaluating Executive Compensation in Times of Crisis Posted by John Galloway, Vanguard, Inc., on Wednesday, March 17, 2021 John Galloway is global head of investment stewardship at Vanguard, Inc. publication by Vanguard Investment Stewardship. Our philosophy hasn’t changed In our last Insights on compensation, we shared key considerations for well-structured executive compensation plans that could withstand the most challenging market and economic conditions, including a pandemic...
The most fundamental role that the SEC must play with respect to climate and ESG is the provision of information—helping to ensure material information gets into the markets in a timely manner...
Top Governance & Stewardship Issues in 2021 Posted by Subodh Mishra, Institutional Shareholder Services, Inc., on Thursday, March 11, 2021 an article by the ISS Global Governance Research Team, Institutional Shareholder Services, Inc. Key Takeaways Protests in 2020 that swept across the US have cast a spotlight on levels of racial and ethnic diversity of corporate directors, C-suite executives and corporate workforces...
Demands are growing for corporate leaders to address these serious issues by promoting effective practices to treat their employees, communities of operation, and service and customers with respect—and to take affirmative steps to ensure equal opportunity, create an inclusive and tolerant workplace, and embrace the full diversity of humanity...
This year, as in the previous five years, Russell Reynolds Associates interviewed over 40 global institutional and activist investors, pension fund managers, proxy advisors and other corporate governance professionals to identify the corporate governance trends that will impact boards and directors in 2021...
The time has come for “activist stewardship.” Simply put, this means putting the skills and techniques of activist hedge funds to work where a company’s financial performance is deteriorating and traditional engagement tools have failed to produce meaningful results to protect value and mitigate long-term risks, including recognizing the importance of environmental, social, and governance (ESG) risks...
Activist investor activity slumped in 2020 as the pandemic rattled markets, managements, and investors. Globally, 652 companies were subject to activist demands through the first three quarters of 2020—the slowest pace since 2015...
Since the beginning of the COVID-19–induced lockdowns, there has been no shortage of experts forecasting drastic shifts in the way that work gets done—including the work of the board...
Corporate governance has long been a focal point for large corporates, listed companies and regulated entities, with numerous studies connecting good corporate governance with higher profitability. However, as the March 2021 effective date of the EU’s Sustainability-Related Disclosure Regulation approaches, corporate governance is becoming increasingly important to companies of all sizes. This is, in part, due to investee companies needing to follow good governance practices, as a baseline, in order to be classified as a “sustainable investment...
In the current “black swan” era of heightened economic turmoil, social unrest, and the COVID-19 pandemic, boards of public companies have had to explore a range of issues in response to rapidly emerging risks.
A Biden Administration can be expected to have a notable impact on corporate governance, both through specific proposals and by how its policies influence state legislation, “best practices” formulation and board conduct. During the long presidential campaign, progressive candidates floated several proposals with significant potential impact on corporate governance, including the Accountable Capitalism Act, the Ending Too Big to Jail Act and the Corporate Executive Accountability Act...
On November 12, Institutional Shareholder Services (“ISS”) published its annual policy updates in its 2021 global proxy voting guidelines, which are effective for shareholder meetings held on or after February 1, 2021. Social and environmental issues, board diversity, shareholder litigation rights and COVID-19 recovery era policies emerged as ISS’ main areas of focus for its policy updates...
Sometimes a corporate director who’s the main source of a company’s reputational problems is the last one to recognize it. That’s why, in order to protect the company from unwanted controversy and reputational harm, boards benefit from discreet tools to remove problematic officers and directors before their terms are up, and without going through a formal removal process...
In the world of corporate governance and proxy voting, 2020 has been a remarkable year, not only because annual general meetings took place in the midst of a global pandemic that forced the abrupt transition to a virtual proxy season, but also because this year marked the beginning of the new decade at a time when companies and investors experience a major shift in how they engage on the topic of corporate governance...
As life dramatically changed in 2020, so did shareholder rights. In the United States, we witnessed a dramatic and substantial change to how companies conduct annual meetings, a reignited debate on the purpose of the corporation, new defensive strategies for companies, as well as a reshaping of the shareholder activist model, as some activists adopted tactics historically associated with private equity. Below we note some of the major developments that took place over the past year...
On September 21, 2020, the U.S. Federal Trade Commission (the “FTC”) published a notice of proposed rulemaking that would, among other things, create a new de minimis exemption under the Hart-Scott-Rodino Antitrust Improvements Act of 1986 (the “HSR Act”), which subjects proposed acquirers of an issuer’s voting securities to notification, filing and waiting period requirements...
At the end of 2019 (which now seems so long ago), my book CEO Leadership: Navigating the New Era in Corporate Governance was published by The University of Chicago Press. My target audience is current and future CEOs and board members, those who advise them and those who teach law and business school students who aspire to those positions...
