Corporate governance - Vigil

It’s not enough to just sell a product or service—companies must truly engage with their customers. Here’s how to embed experience design in your organization. A McKinsey & Company article.

As recent decisions of the Delaware Court of Chancery illustrate, investment banks can face conflicts of interest in their role as advisors on merger and acquisition (“M&A”) transactions. In a trilogy of recent decisions—Del Monte, [1] El Paso [2] and Rural Metro [3]—the court signaled its concern, making clear that potentially disloyal investment banking conduct may lead to Revlon breaches by corporate directors and even expose bank advisors (“M&A advisors”) themselves to aiding and abetting liability.

If it seems like activist investors have had a more visible and powerful presence over the last few years, it’s because they have. Just under three-quarters of public company CFOs say they have experienced some form of shareholder activism—most often in the form of communication with management or the board, and sometimes in the form of proposals that have gone directly to shareholders, according to the results of Deloitte’s first-quarter 2015 CFO Signals™survey of nearly 100 CFOs of large North American companies. Moreover, about half say they have made at least one major business change specifically because of shareholder activism (share repurchases, leadership changes and divestures being the most common).¹

Under Delaware law, the board of directors of each company executing a merger agreement is required to adopt a resolution approving the merger agreement and declaring its advisability, [1] although Delaware law also provides that a company may “agree to submit a matter to a vote of its stockholders whether or not the board of directors determines at any time subsequent to approving such matter that such matter is no longer advisable and recommends that the stockholders reject or vote against the matter.”

Being “design driven” means operating in a fundamentally different way. In this video, McKinsey’s Mahin Samadani explains how companies can make the transition. A McKinsey & Company article.

Most institutional investors want Institutional Shareholder Services to adopt a stricter proxy-voting policy on the maximum number of boards considered appropriate for CEOs and other corporate directors to serve, while corporate respondents favor a policy of more latitude, said a report released Monday containing results of an ISS global survey it uses to consider revisions to its policies.

After posting a teaser trailer on his website Monday, Icahn on Tuesday released his video detailing all the reasons he believes the economy is coasting toward disaster. The activist investor known for shaking up corporate boards railed against “fallacious” corporate earnings, bubbles created by low interest rates, high-yield bonds being sold by Wall Street, and more, while endorsing Republican presidential candidate Donald Trump.

Shareholder advisory firm Hermes EOS said it has "real doubts" about whether key Volkswagen stakeholders recognize the need for fundamental reform at the company, in the middle of an emissions-cheating scandal.

In a series of rulings culminating in a recent memorandum opinion, the Delaware Court of Chancery has reset the rules for settling merger-related litigation. In re Riverbed Tech. Inc. S’holders Litig., C.A. No. 10484-VCG (Del. Ch. Sept. 17, 2015).