Corporate governance - Vigil

Societies throughout the world utilize a wide range of corporate governance mechanisms to govern their corporations. Normally, most societies use rules and norms to get corporations to conform to traditional corporate governance practices; and most corporations do conform to this national governance logic. However, some corporations do not conform to the logic in which they are embedded. When this deviation happens, we note that corporate governance deviance has occurred. The purpose of our article was to explain what corporate governance deviance is, and why, when, and how firms engage in governance deviance.

As Toys ‘R’ Us heads for liquidation, a common refrain has it that the toy retailer failed to successfully reorganize in Chapter 11 because it took on too much debt.  The 2005 leveraged buyout (LBO) of Toys ‘R’ Us by a group of investors led by KKR Group, Bain Capital, and Vornado Realty Trust is a particular target for blame.  But this ignores the larger issue, of which the LBO and the subsequent bankruptcy are merely symptoms.  In short, Toys ‘R’ Us collapsed, like many companies have, because of a failure to innovate.

Internal surveys showed employee engagement was at its lowest in years, public opinion of its customer services division was spiralling downward, and future profitability was threatened by a projected flattening of electricity demand, which would force power prices to rise—something consumers never like.

Financial regulators in the United States and abroad have recently trained their sights on innovations at the intersection of finance and technology. Cryptocurrencies like Bitcoin and Ethereum have come under fire, as have other fintech firms. But despite a flurry of activity and increasing attention to the issue, regulators have struggled to apply old law to new facts.

The board of directors of Hydro One Inc. approved changes to the company’s executive compensation policies last year, making it much costlier for the government to intervene in the utility.

Robert Jackson, a commissioner of the U.S. Securities and Exchange Commission and a former professor at Columbia Law School, speaks with Reynolds Holding about becoming a commissioner, the problem of perpetual dual class stock, and what the commission can do about mandatory arbitration for shareholder disputes.  Click on “read more” for a link to the conversation on the Blue Sky Banter podcast.

You can't revolutionize the shipping industry if everyone's using a different blockchain system.

Following the US announcements in early March of their intent to impose steel and aluminum tariffs, and the subsequent threats from China to retaliate with their own tariffs, the global trade picture remains uncertain. The IMF and the World Bank Spring Meetings set off amid US-Japan bilateral negotiations and Trump’s hot-and-cold approach to the TPP. This week we review blogs’ views on tensions over international trade and how they can impact world economic growth.

Income inequality among citizens of 146 continues to fall, though at a somewhat reduced pace, according to the updated Bruegel dataset. Income convergence of China and India accounts for the bulk of the decline in global income inequality from 1988-2015.

Corporate bankruptcy law is built around the idea of replicating the hypothetical bargain that would occur among creditors of a firm if they could all negotiate ex ante. By the common account, the creditors in that bargain would agree on a set of rules that maximize value. In our working paper, “The Bankruptcy Partition,” we introduce an important qualification to this idea.

Facebook, Google, Comcast and Berkshire Hathaway are among a number of large companies that have dual-class stock structures, providing controlling shareholders with majority voting power despite owning a minority of total equity.

There’s no doubt about it: Tough, cost-conscious management is a vital ingredient at any good company. But right now, shareholders in Restaurant Brands International Inc. and Kraft Heinz Co. should be asking whether a lean and mean operating style is hitting its limits when it comes to peddling doughnuts and ketchup.

In the first few months of 2018, significant media attention has been focused on new pay-ratio disclosures and how the repeal of the Section 162(m) performance-based compensation tax deductions will impact executive-compensation decisions. But behind the headlines, top of mind for investors voting proxies are perennial and emerging topics such as the alignment of metrics with company strategy, rigor of goal setting, pay magnitude and the responsiveness of compensation committees to low say-on-pay votes.