Corporate governance - Vigil

Since its issuance in 2015, the Delaware Supreme Court’s decision in Corwin v. KKR Financial Holdings LLC [1] has been routinely applied, in appropriate circumstances, to dismiss post-closing deal litigation.

The Journal of Financial Economics has recently published our article, Reexamining Staggered Boards and Shareholder Value, which seeks to contribute to understanding how staggered boards affect shareholder value.

The Securities and Exchange Commission [December 12, 2017] announced the appointment of William D. Duhnke III as Chairman and J. Robert Brown, Kathleen M. Hamm, James G. Kaiser, and Duane M. DesParte as Board members of the Public Company Accounting Oversight Board (PCAOB).

Reforms to improve accountability to affect 67 of Britain’s largest listed companies

The Delaware Court of Chancery held this week that approval by a committee of independent directors and the informed vote of minority stockholders insulated from review a transaction that created and distributed new classes of low-vote stock designed to preserve the voting power of a controlling stockholder. IRA Trust FBO Bobbie Ahmed v. Crane, C.A. No. 12742-CB (Del. Ch. Dec. 11, 2017).

Research in social science has recently demonstrated the importance of the family environment for an individual’s behavior. For example, parents may impact their children by instilling certain values in them. Some emerging work has suggested that the opposite may also be important: Children may shape their parents.

Post-merger appraisal rights[1] have attracted more than their fair share of controversy in recent years.  When activated, appraisal rights give the shareholders of a Delaware target corporation[2] the option to eschew the consideration of the proposed deal, pursuing instead a judicial determination of the “fair value” of their shares. By statutory requirement, this judicially-crafted valuation imposes no explicit burden of proof on the parties, and it must be based on all relevant factors (excluding buyer side synergies).

The world’s social media platforms and financial markets are abuzz about cryptocurrencies and “initial coin offerings” (ICOs). There are tales of fortunes made and dreamed to be made. We are hearing the familiar refrain, “this time is different.”

Boards of directors govern in an increasingly dynamic environment marked by technological and business model disruption, regulatory and enforcement uncertainty, political unrest, and expanding expectations about the company’s role in addressing societal problems. Innovative uses of technology are driving changes in competitive conditions, and creating opportunities for inventive companies, but peril for those that are slow to adapt. Interrelated changes in consumer behavior, customer expectations, the supply chain, and the labor market add complexity to governing in a rapidly changing environment, as does the social and political unrest that often emerges in transformational times.