Corporate governance - Vigil

On April 13, 2016], the Federal Reserve and the FDIC provided feedback on the 2015 resolution plans filed by the eight “first-wave” domestic filers, and issued Guidance to govern their 2017 resolution plans. Most significantly, the Federal Reserve and the FDIC jointly determined that the resolution plans of five financial companies were “not credible” as required by the joint resolution planning rule, 12 C.F.R. Parts 243 and 381.

The commitment is part of a state effort to keep companies from leaving after a tax increase last year.

This working paper addresses the role of the Board in understanding enterprise risk management (ERM) and governance.

On April 3, 2016, news sources around the world started reporting about a data leak of 11.5 million confidential documents concerning the business activities of Mossack Fonseca, a Panama-based law firm. The leaked documents implicate a wide range of firms, politicians, and other individuals to have used 214,000 secret shell companies to evade taxes, finance corruption, launder money, violate sanctions, and hide other activities. In our paper entitled The Value of Offshore Secrets—Evidence from the Panama Papers, which was recently made available on SSRN, we use this data leak to study whether and how the use of offshore vehicles creates firm value.

Over the last few years, the SEC has been criticized for (1) failing to “consistently and aggressively enforce the securities laws and protect investors and the public,” (2) obtaining sanctions that amount to only a slap on the wrist against major financial institutions, (3) settling rather than taking big banks to trial, 4) failing to name individuals in enforcement actions, (5) failing to require that companies admit guilt, (6) granting waivers from the collateral consequences of enforcement actions,6 and, most recently, (7) failing to prevent a prominent hedge-fund manager from getting back into the hedge-fund business.

The U.S. Securities and Exchange Commission (SEC) mandates that publicly-traded firms disclose a large array of information to investors. Because certain disclosures could cause competitive harm, the SEC allows firms to request confidential treatment of competitively sensitive information contained in material agreements that it would otherwise be required to disclose to the public.

On May 17, 2016, the U.S. Securities and Exchange Commission staff issued important updates to its Compliance and Disclosure Interpretations regarding the use of non-GAAP financial measures. Last significantly modified in January 2010, these interpretations provide new guidance to help companies avoid presenting financial information in an improper or potentially misleading manner.

On May 5, 2016, the Consumer Financial Protection Bureau (CFPB) released a 377-page notice of proposed rulemaking that would prohibit, going forward, banks and a variety of other companies from including in contracts arbitration clauses that would prevent consumers from filing or participating in class-action litigation.

Finance minister Michel Sapin rules out UK-style deal with Google or McDonald’s and says more cases could follow

This report offers an overview of stress testing as a management and regulatory tool in banking. The report suggests ways that banks can use stress tests and their component parts to connect strategic thinking at Baord and senior management level to meaningful actions across their organizations. It offers a five-step program for achieving greater positive impact from stress testing, including modeling P&L and liquidity impacts and using scenarios more effectively.

The defeat of an advisory pay proposal at Renault, and the board's dismissive reaction, have brought questions of governance to the fore—not least concerning the governance of French corporate governance itself, and whether corporate France’s attempt to self-regulate will be enough to pre-empt state

In our paper, Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay, forthcoming in the Contemporary Accounting Research, we try to quantify the influence of management recommendations on shareholder votes.

* Interim findings of strategic review prompt changes* Seeks CFO, to appoint new non-executive directors* Serves notice on investment manager Electra

In our paper, Dual Ownership, Returns, and Voting in Mergers, recently published in the Journal of Financial Economics, we study how the joint ownership of target’s equity and debt affects investors’ behavior and outcomes of M&A transactions.