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But without certainty a Canada-wide regulator will actually happen — after 10 years of study — task force chair says it must press ahead. The task force appointed to help rejuvenate Ontario’s capital markets says the province’s efforts may also put some wind in the sails of the years-long campaign for a Canada-wide securities watchdog. Canada is the only G20 country without a national securities regulator, and the latest attempt by some provinces and the federal government to address that shortcoming has now dragged on for the better part of a decade. However, a report released earlier this month from the Ontario government’s Capital Markets Modernization Taskforce included recommendations it said “may support” work being done to set up a Canadian Cooperative Capital Markets Regulatory System (CCMR). The chair of the Ontario task force, Walied Soliman, said the group was mindful that a national regulator would be a good thing for the country, but also that there is still uncertainty as to whether it will actually happen.
Equity shareholders do have significant powers, most notably the power to vote at shareholder meetings and thus the power to directly influence the appointment and remuneration of board members and senior management, as well as the outcome of share issuance and buybacks, mergers and takeovers. Conversely, bondholders do not, except (sometimes) in the case of bankruptcy or change. However, there are four crucial points that can be overlooked. - Corporates have consistently increased leverage (and achieved falling credit ratings) over the last 30 years. They are not issuing fresh equity on the whole, providing less need to appease new equity investors.
- Equity is perpetual – a seller is replaced by a buyer (although that buyer may be the company). This supports the case for stewardship in equity, particularly passive equity, where investors will be perpetual shareholders.
- But large borrowers, with or without listed equity, are likely to refinance rather than repay debt. They will work to have liquid bonds trading in various markets, so they have as many sources of funding as possible. This means they are continually launching new issues, requiring engagement with creditors, and long-term holders of debt are likely to be perpetual creditors of these borrowers.
- The recent pandemic has led many entities to borrow significant amounts of money from the government, the banks and the market. Not all borrowers will be able to repay this extra debt in the short-term and will have a greater need to consider the interests of bondholders for some years to come.
This alert is the second in a series. In our first alert, “History and State of Play,” our global financial services policy team described the status of the Department of Labor’s (DOL) proposed rule on socially responsible investing, “Financial Factors in Selecting Investments” (Proposed Rule).1 In this Alert, our ERISA fiduciary team describes the Proposed Rule’s implications, if finalized in its current form, for plan sponsors and investment managers that would like to consider environmental, social, and governance (ESG) factors when evaluating investments. ESG-themed funds and investment strategies have attracted tens of billions of dollars in recent years. However, U.S. retirement plan sponsors and other fiduciaries of private-sector retirement assets that would like to consider ESG factors when making investment decisions must consider the U.S. federal pension statute, the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA imposes strict investment duties on fiduciaries responsible for investing private-sector pension plan assets, including fiduciaries with responsibility for selecting and monitoring investment options for 401(k) and other individual account retirement plans.
Bills recently introduced in Congress would regulate corporate share repurchases, or ban them outright, except in tender offers. But readily available curbs on buyback abuse exist, some of which require little or no government involvement. How has recent buyback activity affected capital markets and business investment? More than $2 trillion was spent by Fortune 500 companies purchasing their shares in the past three years, much of it funded by debt. The CARES Act, enacted to boost companies' liquidity in response to COVID-19, limits buybacks while loans made under the law are outstanding, but longer-term solutions make sense. Sens. Chuck Schumer, Bernie Sanders and others have asserted that buybacks come at the expense of worker pay and benefits. They propose to legislate buyback preconditions, which would have the government determine the adequacy of companies' investment in pensions, health benefits and "long-term strength." [...] One or more of the following measures included in annual shareholder meeting resolutions, or required by amended proxy rules, could restrain (although not prohibit) excessive and imprudent buybacks by requiring company management to:
(A) Prominently disclose the cost vs. current market value of all buybacks made under an ongoing program as purchases are made, and publish a summary of them by week or month, for the prior three or five years.
(B) Describe, when a buyback program is authorized and regularly thereafter, why capital to be used for buybacks under the program has no better corporate purpose.
(C) Furnish an independent investment analysis of significant buybacks, compared with payment of cash dividends, to be refreshed regularly during any ongoing buyback program.
(D) Provide an annual or more frequent statement of the buyback program's impact on credit worthiness and ratings.
(E) Adopt compensation practices reducing or eliminating reliance on earnings per share when buyback programs are ongoing.
As 2020 kicked off, Dan Gocher at the Australasian Centre for Corporate Responsibility, a shareholder advocacy organisation, was feeling “pretty optimistic” about its plans to force big Australian energy companies to tackle climate change. [...] Like many others, Gocher feared investors would swiftly retreat from recently made climate pledges as markets plummeted. Critics had long argued that the fund industry’s nascent love affair with environmental, social and governance investing was a marketing ploy that would be dumped at the first sign of trouble. Rather than drive investor attention away from climate change, the pandemic has cemented interest (Mirza Baig, global head of governance at Aviva Investors). Instead, despite the pandemic, 2020 has proved to be a landmark year for investor action on climate change, with significant resolutions being passed and investment pouring into sustainable funds. With both regulators and clients increasingly calling for change, asset managers are now broadening their remit beyond energy-intensive industries such as oil. [...] Until the virus, “there was still a significant portion of the investor base” that believed tackling climate change “could wait until tomorrow”, he says. “That has changed. Companies and investors are starting to look at the importance of acting now.” [...] Overall, in the US and Canada, average investor support for environmental resolutions during the first six months of 2020 was 32.7 per cent, up from 21.9 per cent in 2019, according to Proxy Insight, a data provider. [...] Investment companies from the US to Australia have been slower to react. A study by ShareAction found that 38 of the world’s 75 largest asset managers scored badly on ESG issues, including BlackRock, Vanguard and State Street. The trio are hugely influential and control about a quarter of US markets alone through the popularity of their passive funds and other investment products, meaning their views drive change in the corporate boardroom.
The managers of sovereign wealth funds and state pension funds prefer, when possible, to keep out of politics. This is becoming more tricky in the era of coronavirus. Covid-19 has upended the global corporate sector, and these investors fear that the gaze of local politicians is slowly turning to vast pools of assets intended for the benefit of future retirees, or generations to come. At an event last month held by the Seoul-based Institute for Global Economics, a think-tank, a group of senior investors from some of the world’s largest sovereign wealth funds and pension funds — from Canada to Singapore — gathered, virtually, to share their concerns. As the pandemic continues to wreak havoc across the planet, governments are being forced to tear up their budgets to limit the damage of Covid-19 on the health of their citizens and their economies. Central banks have responded by slashing interest rates to zero to ease financial conditions, as well as buying extra debt while governments fired up issuance to fund stimulus packages. This has sparked criticism that central banks, set up to be independent of government, have become more politicised as a result of the crisis. Managers of sovereign wealth funds and state pension funds worry they will be next. [...] In this context, the attention from policymakers is an unwanted distraction. It might even be distorting these funds’ asset allocation, if it means they invest in more short-term, liquid investments such as government bonds — that yield virtually nothing — because they think they might have to free up cash quickly. Politicians should be wary of the long-run effects of putting these funds to work in the present crisis.
This report explains the challenges to training and upskilling the US workforce even prior to COVID-19, and how COVID-19 has increased the need for these programs. It then presents a US job training system capable of meeting the challenges of a post-COVID-19 economy. Specifically, this report recommends near- and longer-term actions to achieve workers’ goals and build a modern, highly skilled workforce.
Is corporate governance fit for purpose? Each company or market failure has spurred politicians and regulators to tinker with public company boards. Sometimes this means changing responsibilities, more recently it has been composition. But the pandemic has revealed broader failure. The fragility of many businesses is clear; the crisis has shown the widespread failure of corporate governance to address operational and financial resilience. This calls for a more fundamental review of company stewardship. The charge sheet is long. Over-distribution — with unsustainable dividends and share buybacks — has weakened corporate balance sheets. Leverage has risen. A few companies also damaged their brands by appearing to lack care for employees and customers. Their initial crisis response looked narrowly focused and tone deaf, seemingly insensitive to companies’ responsibilities in society. And many businesses with global sourcing cut costs using longer supply chains, raising the risk of disruption and reputational damage. In many cases these failings were driven by badly-designed executive rewards. Not all the problems were of greed or reckless boards. Some caved-in too readily to shareholder demand for pay-outs. Where was the broader view of stakeholders? Perhaps the trend to shorter company lives is being driven not just by competitive pressure, but by a disregard for the importance of resilience. Certainly, shareholders want upside, but in long-term stewardship it is folly to neglect managing downside risk.
As public companies continue to navigate the ongoing economic upheaval caused by the COVID-19 pandemic, opportunistic activist investors may find the resulting economic conditions conducive to accumulating significant ownership positions, agitating for changes in corporate strategy and management, and pursuing public activist campaigns. Although the number of overt activist campaigns were down during the primary 2020 proxy season, as the annual meeting season for most public companies took place during the initial months of the pandemic lockdown, the third and fourth quarters generally tend to see an increase in activist activity as hedge funds make initial preparations for the following year’s proxy season. Given these circumstances, this is an opportune time for public companies to make preparations by reviewing and evaluating their defensive profiles. The following summarizes most of the common defensive mechanisms that companies utilize when faced with activist campaigns, hostile takeover attempts, and other attempts to influence corporate policy in ways that may not be in the best interest of all shareholders. While there is no one-size-fits-all approach to defensive measures, an evaluation of the existing defensive profile of the company is a critical first step. In our experience advising on behalf of companies and their boards of directors, an analysis of the corporation’s defenses under its organizational documents and applicable law is usually undertaken and summarized for the board in connection with a defensive profile review.
The average tenure of outgoing lead executives was slightly less than seven years. Companies worldwide have been in lockdown for the past four months, leaving banks of desks empty while staff work remotely. But one area has seen a flurry of activity: The corner office. This year has seen a spate of changes in boardrooms worldwide, as companies come under pressure from investors to shuffle their executive teams to steer them through the coronavirus crisis. The trend is most pronounced in the U.S., where companies have experienced higher levels of executive departures than their counterparts in both the U.K. and Europe, according to new research. SquareWell, a shareholder advisory firm, tracked changes across companies listed on the major European, U.K., and U.S. indexes over the period January 1 2019 to June 30 2020. It found that 66% of those executives quit, while just 7% were formally dismissed from their posts. Almost a third (29%) were ousted from their roles because of poor performance, a scandal or strategic disagreement. Analysts, headhunters and investors have highlighted several reasons for this, including pressure from shareholders frustrated with underperformance and the need for better governance during the crisis, while other departures have taken place as executives reach the end of their tenures. [...] SquareWell's report showed that 40% of those executives dismissed during the period had recorded negative share price performance during their tenure.
WASHINGTON — After lawmakers collected hundreds of hours of interviews and obtained more than 1.3 million documents about Amazon, Apple, Facebook and Google, their chief executives will testify before Congress on Wednesday to defend their powerful businesses from the hammer of government. The captains of the New Gilded Age — Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Google — will appear together before Congress for the first time to justify their business practices. Members of the House judiciary’s antitrust subcommittee have investigated the internet giants for more than a year on accusations that they stifled rivals and harmed consumers. The hearing is the government’s most aggressive show against tech power since the pursuit to break up Microsoft two decades ago. It is set to be a bizarre spectacle, with four men who run companies worth a total of around $4.85 trillion — and who include two of the world’s richest individuals — primed to argue that their businesses are not really that powerful after all. [...] “It has the feeling of tech’s Big Tobacco moment,” said Gigi Sohn, a former senior adviser at the Federal Communications Commission and a fellow at Georgetown University’s law school, referring to the 1994 congressional appearance of top executives of the seven largest American tobacco companies, who said they did not believe that cigarettes were addictive.
Over the past 15 years, stock trading has switched from a mostly manual to a mostly automated process. The SEC’s Regulation NMS provides a regulatory framework for the new world of electronic exchanges. My recent paper, Equity Market Structure Regulation: Time to Start Over, forthcoming in the Michigan Business & Entrepreneurial Law Review, argues that Regulation NMS has not achieved its goals and should be replaced with a simpler, less prescriptive system. In the early 2000s, the NYSE and Nasdaq dominated trading in large-company stocks. Today, trading is fragmented among 13 different exchanges, with three more on the way. The NYSE and Nasdaq previously used different trading systems. [...] Rather than tinker at the margins with a system that produces so many unintended consequences, the SEC should replace Regulation NMS with a simpler set of rules. These should be based on the following principles:
(A) Exchange autonomy—exchanges should be free to design their trading systems as they see fit, with no mandate to connect or route trades to any other exchange. Brokers, not exchanges, should search for and obtain the best price for their customers.
(B) Regulatory consistency—brokers operate proprietary trading platforms known as Alternative Trading Systems (ATS) that execute trades but are not regulated as exchanges. The differing regulatory treatment should be eliminated.
(C) Issuer choice—under current rules, every exchange can, and typically does, trade every listed company’s stock. The SEC should permit companies to select the venue(s) that trade their stock. Some companies might choose to concentrate all trading on a single exchange, while others might opt to spread trading among many venues.
In the era of continuous and steadily accelerating technological change that started with the Industrial Revolution, economies and societies were repeatedly transformed in ways that can be traced to ownership of the essential and scarce factor of production of the day and command of the economic rents that flowed to that factor. The digital transformation is now ushering in a new economic era, in which the economy is again being reordered by new technologies based on a new essential capital asset — data. Data generates massive rents, fuels the rise of superstar firms and generates powerful incentives for strategic trade and investment policy. The emergence of this new economy signals a new era of conflict, on new battlegrounds and with new tools or weapons, between new coalitions within and between countries. This paper describes the contours of the conflicts that are to be expected with the digital transformation as it realigns interests; compares these expectations with actual developments; and comments on the strategies of the main protagonists and the implications for the rules-based system of international commerce.
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That’s the amount of buybacks U.S. corporations funneled to shareholders during the past decade—rather than invest in technologies for the common good. In the decade 2010–2019, companies in the S&P 500 Index distributed $5.3 trillion—54 percent of profits—to shareholders as stock buybacks. The United States has been woefully inept in responding to the COVID-19 pandemic. Clearly, the Trump administration’s ignorance, incompetence, and malfeasance have exacerbated the death and destruction. But putting in place a new administration that heeds the recommendations of science and effectively carries out the necessary containment policies would only remedy part of the nation’s failure to deal with the pandemic. The successful implementation of a national response to the COVID-19 pandemic requires collaborations between federal government agencies and those business enterprises that have accumulated the capabilities for the development, production, and delivery of countermeasures—vaccines, therapies, diagnostics, ventilators, and personal protective equipment (PPE). For such government-business collaborations (GBCs) to successfully confront the COVID-19 pandemic, the prime purpose of the companies themselves must be the development, production, and delivery of safe, effective, and affordable countermeasures. That’s not their prime purpose now. How can it be, when senior corporate executives have an obsession with doing whatever it takes to boost the company’s stock price?
The Future of Nature and Business, the second of three reports in the World Economic Forum’s New Nature Economy series, provides the practical insights needed to take leadership in shifting towards a much needed nature-positive economy. As the world prepares to recover from the COVID-19 pandemic and resulting crisis, we are presented with an unprecedented clarion call, and opportunity, to change the way we eat, live, grow, build and power our lives to achieve a carbon-neutral, ‘nature-positive’ economy and halt biodiversity loss by 2030. Business as usual is no longer an option. The report highlights the need for a fundamental transformation across three socio-economic systems, which represent over a third of the global economy and provide up to two-thirds of all jobs. These systems are: food, land and ocean use; infrastructure and the built environment; and extractives and energy. Together they drive the threats which endanger almost 80% of the total threatened and near-threatened species. These systems, therefore, have a significant opportunity and responsibility to reverse nature loss. But they also have tremendous upside benefits to gain by embracing this transformation now. The Future of Nature and Business sets out how 15 transitions across the three systems can form the blueprint of action for nature-positive transitions which could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030.
High school and postsecondary graduates who are entering the labour force during the COVID-19 pandemic could lose thousands of dollars in earnings in the coming years because of the outbreak, according to a new study from Statistics Canada. If the youth unemployment rate stays close to its near-record level of 27.5 per cent in June for the rest of 2020, this year’s graduates, on average, could lose $25,000 or more over the next five years compared with what previous cohorts earned, Statscan estimates. “Often, the implications of a poor start to one’s career can follow these new graduates for years,” the report said. “The concern is that this year’s graduates will enter the labour market under unusually difficult and unpredictable conditions.” Labour market recoups nearly one million jobs, but recovery still perilous for young, women and gig workers. [...] Outcomes differ by sex and educational attainment, and the study found that female postsecondary graduates could suffer more than men. If the youth unemployment rate remains at 28 per cent, for instance, female bachelor’s degree graduates may lose nearly $44,000, compared with roughly $28,000 for their male counterparts.
[...] I joined the board of directors of Free The Children in approximately 2005 following a meeting with Marc Kielburger. [...] The board that I chaired consisted of dedicated, skilled and committed volunteers. Board members included academics, educators, human rights activists, businesspeople, a chartered accountant, a lawyer, and others. In addition to attending board meetings, board members committed a tremendous amount of time to the organization. This took various forms, from regular meetings with the executive team to travelling to see the charity’s international operations, to spending time with WE’s employees, and to attending events such as WE Days. Given my passion for the organization, it was a difficult decision for me to tender my resignation. I did not resign as a routine matter or as part of a planned board transition. I resigned because I could not do my job. I could not discharge my governance duties. In March, the WE Charity executive team were scrambling to contend with the impacts of the pandemic, and they began to lay off large numbers of staff. As the days went by, the number of job losses grew quickly into the hundreds. The board felt, of course, a duty to protect the organization, and to consider the interests of its stakeholders including its employees, its donors, partners, beneficiaries and others. [...] By March 23, aside from verbal briefings, we had not seen any written evidence, reports or raw data to support the drastic measures that were being taken by the organization. Our oral briefings were largely focused on things like the status of support from sponsors. We were told that the executive team was running daily financial reports to inform their decision making, but those reports were not shared with the board despite our requests.
Activist investors in the US stand to be big beneficiaries of a new rule from Wall Street’s top regulator that would allow most hedge funds to keep their equity stakes secret. For more than four decades, any investor with $100m or more in US-listed securities has been required to detail their holdings to the US Securities and Exchange Commission every quarter. Under proposed new rules, that would step up to $3.5bn, leaving just 550 of the world’s largest investors reporting their bets. The SEC’s proposed shift, announced this month, would mean companies that depend on quarterly filings by asset managers to keep tabs on their investor base will lose access to reports from 90 per cent of investors, including activists that might be trying to force them into big changes in strategy. “A foundational aspect of being a public company — for both companies and investors — is knowing who owns the shares,” said Adam Emmerich, a partner at Wachtell, Lipton, Rosen & Katz, who focuses on corporate governance and securities law. “Activists don’t need a lot of money to have an impact, so it’s not only firms with $3.5bn in SEC-registered securities who are relevant.” [...] One such information agent, Okapi Partners, said the new rules could be detrimental to activists themselves as well as to companies. “Certainly for the companies the lack of transparency is problematic,” said Bruce Goldfarb, chief executive of the firm, which is often employed to drum up support during an activist campaign. “But the investors who think the lack of transparency will help them are missing the point. They will want to find who the other shareholders are to garner support.”
On June 29, 2020, the U.S. Department of Labor (DOL) announced a new proposed class exemption to certain prohibited transaction restrictions in the Employee Retirement Income Security Act of 1974, as amended (ERISA), and the Internal Revenue Code of 1986, as amended (the Code), entitled “Improving Investment Advice for Workers & Retirees.” The proposed exemption is intended to help workers and retirees by preserving the wide availability of investment advice arrangements and products for retirement investors. The proposed exemption is expected to be well-received by “investment advice fiduciaries,” because it is broader and more flexible than the DOL’s pre-existing prohibited transaction class exemptions which generally provide relief for more discrete transactions. Here are five things you should know about the proposed exemption.
Our timeline visualizes AI-powered companies with exits valued at $1B+, including insurtech company Lemonade’s recent public offering and Roche's massive acquisition of cancer tech company Flatiron Health. Artificial intelligence is a sector that attracts big investor checks: Q2’20 saw $7.2B in funding, despite a 12-quarter low in AI deals. The industry has also seen its share of eye-popping exits. Even amid the Covid-19 pandemic, AI-powered companies like Lemonade and Zoox have garnered billion-dollar exits, with a $1.6B IPO and a $1.2B acquisition, respectively. The pace of massive exits like these has been on the rise: since 2013, 14 AI companies have exited at valuations of $1B+ — of those, 8 have taken place in 2019 and 2020 alone. Using CB Insights data, we visualized these exits together in one timeline. Our analysis considers first exits only. Our definition of AI companies includes not just SaaS companies, but also companies using AI as a core differentiator for their main product offering. For more on billion-dollar exits, see our post on Visualizing Tech Giants’ Billion-Dollar Acquisitions.
The ability to have a dual-class voting structure can be an important consideration for high-growth, innovative companies (especially those in the technology sector) when deciding on an IPO venue. These structures are not possible for a premium listing in London, whereas they are available on other major stock exchanges, meaning that the UK risks missing out on having these companies list in London. Dual-class structures involve two different classes of shares with differential voting rights. This means that founders and other pre-IPO holders are able to maintain voting control of the publicly listed company through holding shares with enhanced voting rights, compared to the shares held by public shareholders. The structure is particularly attractive to rapidly growing companies, especially in the technology sector, where founders wish to retain voting control following an IPO. A key argument in favour is that they allow visionary founders to concentrate on the company's long-term strategy, growth and performance without having to keep one eye unduly on short-term targets and the risk of shareholder activism while they are still in the high-growth phase.
A crucial role of any board is risk management. This responsibility includes setting the appropriate risk level, monitoring management’s actions against that benchmark, scanning the horizon for potential problems and helping management deal with potentially value-destroying events when they occur. Covid-19 makes this task much more difficult. Not only has the pandemic raised risk levels significantly, but it has also transformed the landscape, revealing entirely new categories of risk. For example, risks pertaining to cybersecurity must be revisited in light of the “new normal” of remote working. Regulatory risks will also require reassessment as governments mull increased intervention to help mitigate the crisis. To get a sense of how boards were coping, the INSEAD Corporate Governance Centre teamed up with Board Agenda and audit firm Mazars on a survey about how corporate leaders were managing their risk environment. [...] Responses to the January-March survey revealed a high degree of confidence in the board’s ability to manage risks. While 87 percent of respondents reported that risks had risen in the last five years, a clear majority (70 percent) considered their boards skilled enough to handle all the risks in their market sector. Further, 63 percent said they fully understood the risk profile of their organisation. More good news: Nearly 80 percent of the executives felt that the board and management were aligned on key risks facing the organisation. Only around 62 percent of respondents reported a similar level of alignment among the board, management and shareholders, however.
Pour la première fois, les entreprises cotées doivent publier dans leurs documents d’enregistrement universel un ratio d’équité. Il s’agit d’une exigence de la loi Pacte. Le ratio d’équité apprécie l’écart entre la rémunération de chaque dirigeant et le salaire (moyen et médian) des salariés à temps plein de son entreprise. Il est prévu un suivi de l’évolution de ce ratio au cours des cinq derniers exercices et sa mise en perspective avec la performance financière de la société. Ces comparaisons renseignent sur la dynamique du partage de la création de valeur entre le dirigeant et les salariés. Ce ratio a pour finalité de renforcer la transparence sur la politique de rémunération des dirigeants et contribue à « une responsabilisation accrue des pratiques salariales des entreprises » selon le ministère de l’Économie, des Finances et de la Relance. À ce titre, il constitue un nouvel outil de gouvernance améliorant la transparence sur les pratiques salariales des dirigeants des grandes entreprises. [...] Pour Claudine Mangen et Michel Magnan, chercheurs à la Concordia University, il existe une corrélation positive entre le degré de divulgation des rémunérations et leurs niveaux observés. Ce résultat découle de la récupération de ces données publiques par les acteurs participant au processus de négociation des salaires.
On a maintenant une image claire du lourd bilan des pertes causées par la COVID-19 au niveau du tourisme international d’après les chiffres de l’Organisation mondiale du tourisme (OMT), lesquels font apparaître, pour la période allant jusqu’en mai, un coût déjà trois fois supérieur à celui de la crise économique mondiale de 2009. Alors que la situation continue d’évoluer, l’institution spécialisée des Nations Unies pour le tourisme fournit la première analyse globale de l’impact de la pandémie, à la fois en nombre de touristes et en manque à gagner, avant la parution prochaine d’informations à jour relatives aux restrictions sur les voyages dans le monde. D’après la dernière édition en date du Baromètre OMT du tourisme mondial, le confinement pratiquement total imposé en réponse à la pandémie a entraîné une chute de 98 % du nombre de touristes internationaux en mai par rapport à 2019. Le Baromètre montre également une baisse de 56 %, d’une année sur l’autre, des arrivées de touristes au cours de la période allant de janvier à mai. Cela se traduit par une chute de 300 millions de touristes et 320 milliards d’USD de pertes en termes de recettes du tourisme international – c’est plus du triple des pertes au niveau des recettes du tourisme international enregistrées pendant la crise économique mondiale de 2009.
In the context of an M&A transaction, practitioners are routinely left to navigate the various standards of review that are applied by the Delaware courts to evaluate whether a Delaware corporation’s directors have complied with their fiduciary duties. Determining which standard of review will apply to a given transaction is particularly critical—depending on the applicable standard, a Delaware court may heavily scrutinize a transaction or determine that the directors may face personal liability for their decisions in connection with the transaction. The flowchart below has been prepared to serve as a quick-reference tool for M&A practitioners when determining which standard of review might apply. While this chart has been prepared in accordance with applicable case law decided to date, it is important to bear in mind that each step set forth below necessarily involves a fact-intensive analysis and that this flowchart should not be exclusively relied upon.
The flowchart is available here: https://www.troutman.com/images/content/2/4/v3/244648/Delaware-Standards-of-Review-updated-07-2020.pdf.
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