Corporate governance - Vigil

Kinder Morgan Canada would have a valuation of about $5.9 billion based on 345 million shares outstanding. The proceeds will be used to help finance its $7.4 billion Trans Mountain Expansion project

Say on Pay (SOP) and shareholder advisor vote recommendations have caused a dramatic increase in the use of relative total shareholder return (TSR) as a long-term incentive (LTI) plan performance metric. Relative TSR prevalence in LTI plans has nearly doubled over the past 5 years, used by approximately 50% of companies of all sizes and industries. This is largely due to shareholder advisors, such as Institutional Shareholder Services (ISS), using TSR as the primary metric in their relative pay for performance (P4P) quantitative evaluations. ISS is appropriately attempting to enhance its company performance assessment model by adding 6 metrics.1 This new approach is clearly a response to critics, but it presents a new set of challenges.

This post analyzes data in the Securities Enforcement Empirical Database (SEED), a collaboration between the NYU Pollack Center for Law & Business and Cornerstone Research. SEED is a public online resource that provides data on SEC actions filed against defendants that are public companies traded on major U.S. exchanges and their subsidiaries. This post focuses on actions initiated from fiscal year 2010 through the first half of fiscal year 2017. [1]

We recently released a short paper, Recent Board Declassifications: A Response to Cremers and Sepe. Our paper responds to a paper released earlier this month by Martijn Cremers and Simone Sepe, Board Declassification Activism: The Financial Value of the Shareholder Rights Project (“CS2017”). We show that the results of CS2017 fail to provide support for the authors’ opposition to annual elections for directors.

What are the consequences if a senior manager of a public firm selectively discloses valuable non-public information (NPI) about the firm (such as details of its next quarterly report) to curry favor with an investor who trades on the information and makes a substantial profit? In theory, they may both be in breach of the insider trading prohibition and the manager may have violated Regulation Fair Disclosure (Reg FD). In practice, however, my article argues, the development of insider trading law, the flawed design of Reg FD, the enforcement policy and practices of the SEC, and the preference and ability of both corporate managers and investors to keep such selective disclosures out of the view of the public and the regulator combine to allow such conduct to occur with impunity. As a result, selective disclosure provides an attractive method for extraction of private benefits from public firms to the detriment of investors without preferential access.

Until recently, Delaware’s dominance in the competition to sell corporation charters was considered so great as to be irreversible. Scholars assumed that if another state were to discover a method to compete effectively, Delaware could simply copy it.

Since they became effective in 2014, Sections 204 and 205 of the Delaware General Corporation Law (DGCL) have provided mechanisms for a corporation to unilaterally ratify defective corporate acts or seek relief from the Court of Chancery to validate any corporate act under certain circumstances. These provisions filled a perceived gap in the DGCL

The report illustrates what would happen if major mutual fund companies like The Vanguard Group, BlackRock Inc., and Fidelity Investments used the significant number of shares they invest in America’s largest companies to push those companies to be more transparent about how they spend money to influence politics.

This week’s governance, compliance and risk-managementstories from around the web

Typical compensation up 8.5 per cent: 'It's all out of whack right now'

With the rise of emerging market economies in the last two decades, the role of state capitalism has attracted new attention. In China, companies in which the state is a majority shareholder account for over 60% of total stock market capitalization. Other emerging market governments such as Brazil or Russia also hold majority or significant minority stakes in local companies. These holdings can be direct through central or local governments but also indirect in the form of public pension funds or sovereign wealth funds. This pattern is contrary to that in many Western economies where large-scale privatizations in the 1980s and 1990s led to the decline in the role of the state in business. In the post-privatization era of the early 21st century, some of the world’s largest publicly-listed firms are now state-owned enterprises (SOEs).

Dual-class stock has become the target of heightened attention, particularly in light of Snap’s recent IPO. While the structure remains popular for companies trying to respond to the short-term outlook of public markets—including companies in the technology and media sectors, as well as companies in more traditional industries ranging from shipping and transportation to oil and gas, and everything in between—dual-class stock continues to be the subject of considerable attack by various investor groups and some academics. Further, while a majority of dual-class companies are not technology companies, young technology companies continue to be the primary focus of governance activists. [1]

Korn Ferry works with boards, CEOs & executive teams on succession planning and the the strategic & organizational drivers that affect top team performance.

The Delaware Supreme Court has held that strict adherence to the procedural requirements of Section 220 of the Delaware General Corporation Law “protects the right of the corporation to receive and consider a demand in proper form before litigation is initiated.” For this reason, a stockholder making a books-and-records demand has the initial burden to show both that he or she has standing to make such a demand and that the production is necessary.

The two major proxy advisory firms are endorsing activist fund Land and Buildings Investment Management LLC's full two-person dissident director slate up for election at shopping mall operator Taubman Centers (TCO), according to reports obtained by The Deal.

The growth of transatlantic private M&A (including private equity) has led to increasing examples of “two nations divided by a common language.” Although many of the core principles of deal making are the same, there are market and cultural differences in the UK and US that participants should understand.

We concentrate on two corporate governance areas which executives may rapidly influence after a change in the balance of power in corporations—the board of directors and their relative power in the organization measured by an accumulation of titles.

Corporate disclosure comes in the form of accounting numbers framed or accompanied by a substantial amount of text. While earlier research has emphasized the informativeness of the accounting numbers, our study is part of a relatively new literature stream that looks at the informativeness of the text and the ease with which the text in corporate disclosure documents can be processed.

Many financial investors structure their investments in private companies in the form of preferred stock. This instrument provides the investor with a preference as to dividends and liquidation proceeds over other equityholders, typically management or legacy stockholders, who hold common stock.