Corporate governance - Vigil

In a fast-paced technological world, where efficiency and streamlining are often viewed as key drivers of success, it’s no surprise that companies have started to livestream their shareholder meetings and to allow investors to participate remotely. Adding an online component can broaden the franchise, giving shareholders the chance to attend the “hybrid” physical/online meeting even if they can’t travel to it.

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?

[On Thursday, November 23], the United States celebrates Thanksgiving, a holiday that has roots across many cultures in celebrating a bountiful harvest. And so we thought it fitting to take this week to appreciate the year’s harvest of advances in corporate governance that companies around the world have made since the beginning of the year.

Corporate America may soon be more mindful of director pay. That’s good news for shareholders.

Theresa May raises issue of public registers and further action to combat tax avoidance at annual meeting in Downing Street

James Langton of the Investment Executive discusses regulator consultations on the issue of banning embedded commissions. Langton makes the point that the regulators have not been clear about their direction, although the latest CSA paper indicates that regulators have considered and rejected a variety of alternatives to an outright ban. According to Langton, regulators “may …

As preparation for the 2018 proxy statement season commences, companies should take a fresh look at their compensation disclosure, including a review of the entire Compensation Discussion and Analysis (“CD&A”) for comprehensiveness, cohesion and consistency. After multiple years of ad hoc revisions, the CD&A can read as disjointed or inconsistent and include stale or repetitive disclosure. Getting an early start to reviewing the CD&A as a whole, focusing on why each element of disclosure is included and how it helps investors understand the company’s compensation programs and philosophy, will help ensure that the CD&A clearly communicates the information that investors are seeking. In addition, companies looking for specific ways to improve the effectiveness of their disclosure as a tool for investor communication should consider the following suggestions.

Corporate voting on shareholder proposals, an exercise in corporate democracy, is an important mechanism through which shareholders try to influence how a firm is run (e.g. McCahery, Sautner, & Starks, 2016).

Dual-class stock structures have recently been the subject of significant commentary. Much criticism has been levied at companies with high-vote/low-vote stock structures, but the conversation seemingly reached a boiling point after Snap Inc.’s recent initial public offering of nonvoting common shares. Without taking a position on the merits of dual-class stock structures, this post provides an overview of the legal issues associated with nonvoting common stock of Delaware corporations.

Institutional Shareholder Services (ISS) announced new questions and other methodology updates to its ISS Governance QualityScore corporate governance scoring tool that will take effect on December 4, 2017.  This post summarizes the QualityScore updates applicable to U.S. companies.

Minority employees at these companies often rated their leaders and organizations higher than their white counterparts.

Corporate innovation has become an increasingly important topic that attracts a great deal of attention from academic researchers in financial economics in recent years. How to motivate and finance corporate innovation?

In recent years, anonymous online hit pieces against public companies have become an increasingly common and effective form of short activism. Given their success in driving down stock prices, anonymous online short campaigns are likely here to stay. Anonymous online short attacks pose unique challenges to public companies. In order to defend successfully against anonymous online short attacks, public companies must have ready-to-execute plans in place—whether or not an online short attack appears imminent.

Just as companies are starting to gear up for the 2018 proxy season, on November 1, 2017, the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission released new guidance on shareholder proposals that seems to indicate the Staff will be taking a more company-friendly approach in its review of no-action letter requests.