Corporate governance - Vigil

Britain’s decision to leave the European Union in June 2016, coupled with the election of Donald Trump as US president in November 2016, gave dealmakers plenty of pause for thought last year—but ultimately did little to derail strategic M&A. Encouraged by the post-Brexit decline in the value of sterling and supported by the continuing availability of transaction financing at attractive rates, the number of acquisitions of UK companies by US acquirers reached the highest level in 10 years, with 262 deals valued at US$48 billion closing in 2016.

The “Cyber-Risk Oversight” handbook released Thursday offers five steps for corporate and non-profit organizations to understand and approach cybersecurity as an enterprise-wide risk management issue, rather than as an IT issue, the groups say.

Previous research on shareholder voting has placed most of the emphasis on the role of institutional shareholders. In our recent study, however, we provide evidence that managers strategically rely on the support offered by retail shareholders to ensure that their agenda passes and to communicate strong overall shareholder support during times of poor performance.

Fewer chief compliance officers (CCOs) are living in fear of finding themselves on the wrong end of a lawsuit or regulatory probe, but the vast majority of directors are still afraid, according to new research. 

The global financial crisis of 2008 has underscored the urgent need for deep rethinking of how financial firms ought to manage risk, and do so not only for the sake of generating good results for themselves and their clients but also for the sake of keeping the entire financial and economic system from collapse.

On May 4, 2017, the U.S. House of Representatives Financial Services Committee voted to advance the Financial CHOICE (“Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs”) Act (Version 2.0) to the House of Representatives for further consideration and a vote. The CHOICE Act is designed to rewrite many of the rules and provisions contained in the Dodd-Frank Wall Street Reform and Consumer Protect Act (“Dodd-Frank”). The proposed legislation was passed on a party-line vote of 34-26 and has advanced to the full House for a vote at some future date. The legislation is expected to pass the House due to its Republican majority. However, after passage by the House, the bill will be taken up by the U.S. Senate, where a 60-vote majority will be required. To date, Senate Democratic lawmakers have voiced their objections to the CHOICE legislation and have vowed to filibuster.

The IPO market produced 98 IPOs in 2016, the second down year in row, coming in 36% below the tally of 152 IPOs in 2015. In the 12-year period preceding 2015, which saw an annual average of 138 IPOs, there were only three years in which IPO totals failed to reach the 100-IPO threshold.

Two of the world’s largest asset managers are strongly considering a public rebuke to Exxon Mobil over climate change at the company’s annual meeting next week.

Shareholders of PPL Corporation have asked the utility company to produce reports on how it will be affected by efforts to limit climate change, despite the board of governors opposing such a move.

FAIR Canada is pleased to see that the OSC’s core mandate, investor protection, is emphasized throughout the 2018 Draft Priorities. Many of the initiatives the OSC offers to prioritize will have a positive impact on investors and help to improve investor protection in Ontario.

Netflix Inc.’s directors are getting too comfortable in their seats, according to investors who want to change the way its board gets elected.

– The Wall Street Journal reported that Ford named Jim Hackett, a former head of Steelcase who has been chairing Ford’s Smart Mobility innovation unit, as its new CEO Monday morning. The shuffle ends Mark Fields’ three-year tenure at the helm of the auto maker and caps a 28-year career at the company

Earlier this week, Jeff Gordon and I wrote to the chairs and ranking members of the Senate and House Banking and Judiciary committees, analyzing reasons why a bankruptcy structure should not be allowed to substitute for the Dodd-Frank Act’s regulator-driven “orderly liquidation authority.” Our letter was joined by more than 100 other academics whose work and teaching deal with bankruptcy and financial regulation.

The area of corporate social responsibility is awash in rhetoric. Although most corporate managers and business advisors agree that engaging in socially responsible behavior is the correct thing for businesses to do, few can articulate a strong analytical foundation for this belief.

In our chapter for the forthcoming Research Handbook on Shareholder Litigation, Lead Plaintiffs and Their Lawyers: Mission Accomplished, or More to Be Done? (to be published by Elgar Publishing) we survey the literature relating to the lead plaintiff provision under the Private Securities Litigation Reform Act (PSLRA). Prior to the enactment of the PSLRA in 1995, individual investors served as largely figurehead class representatives. Because class action lawyers typically had a much greater interest in the class recovery than the named class representatives, plaintiffs lacked the incentive to monitor class counsel.

On May 8, 2017, Ethics Metrics LLC submitted comments to the SEC, Analysis of Bank Holding Company Disclosures, that address a key issue that arises in the Commission’s 30-year old Industry Guide 3, Statistical Disclosure by Bank Holding Companies as well as in the Financial Stability Board’s Thematic Review of Corporate Governance, dated April 28, 2017.