Corporate governance - Vigil

In many ways, 2021 was a high-water mark for corporate activism. The levels of traditional shareholder activism rebounded from the lows reached during the early days of the COVID-19 pandemic. M&A activism increased substantially as shareholder activists sought to capitalize on the M&A boom. Large-cap activism returned as activists targeted Fortune 500 CEOs with increasing frequency. 

LONDON—Consumer prices in the U.K. rose at the fastest annual rate in nearly three decades last month, strengthening the case for further increases in the Bank of England’s key interest rate as the country’s economy emerges from the Omicron wave.

There is an active debate in the literature as to whether antitakeover provisions (ATPs) that shield managers from takeovers create or destroy firm value. While most studies focus on the average effects of ATPs across all firms and time, the recent COVID-19 pandemic and the massive drop in share prices the pandemic caused raised another important question in this debate: When market-wide shocks cause large declines in share prices, do ATPs exacerbate or mitigate the effects of these “market shocks” on firm value?

While there is substantial research about the evolution and effects of mandated gender diversity, few academic studies exist that focus on the dimension of race. In our new working paper, What Drives Racial Diversity on Corporate Boards?, we uncover recent trends in board racial diversity and analyze factors that drive the lack of diversity.

In his annual letter to the CEOs of the companies in which BlackRock invests, Mr. Fink said businesses that don’t plan for a carbon-free future risk being left behind. The quest for long-term returns, and not politics, is what animates the money manager’s efforts, he wrote.

In 2022, the COVID-19 pandemic and the myriad crises it spawned may finally start to recede. But even in that best-case scenario, a tsunami of new challenges – from the failure of climate action to the erosion of social cohesion – is within sight. Addressing them will require leaders to adopt a different governance model.

PWG’s report concluded that stablecoins pose a wide range of potential dangers, including inflicting large losses on investors, destabilizing financial markets and the payments system, facilitating money laundering, tax evasion, and other forms of illicit finance, and promoting dangerous concentrations of economic and financial power.

Institutional Shareholder Services (“ISS”) released its policy updates and voting guidelines for shareholder meetings beginning in 2022. Unsurprisingly, much of the focus continues to be on responding to investor views on climate and diversity initiatives and certain governance considerations such as unequal voting structures. Below, we outline the key changes to ISS’ voting guidelines that companies should consider as they begin to prepare for the upcoming proxy season.

McDonald’s Corp. Chief Executive Chris Kempczinski is starting the year at the helm of one of the world’s most recognizable restaurant brands battling the latest coronavirus variant, rising inflation and workforce shortages.

It will take at least two years before global unemployment falls back to pre-pandemic levels, according to fresh projections, with joblessness in poor countries remaining high even as labor markets in rich countries become increasingly tight.

JPMorgan Chase  reported record annual profit in 2021 on Friday. But a combination of that being driven in part by releases of set-asides for bad loans, plus uncertainty about 2022, will have many investors immediately looking past that remarkable result

Investors in Chinese property bonds can’t catch a break, as a crisis of confidence spreads to stronger-looking developers that mostly avoided last year’s selloff.

How common ownership affects competition is a source of acute disagreement among scholars and policymakers, with some who believe common ownership depresses competition seeking antitrust law reforms that would significantly constrain how investment funds operate. Neglected in this vigorous debate, however, is a careful analysis of how firm managers – the persons who in the first instance actually make the decisions that determine an industry’s competitiveness – would act differently in the presence of common ownership.

Apple is warning that Senate legislation aimed at reining in large tech companies would weaken a privacy-protection tool that it rolled out last year and has already stung Facebook, Snapchat and other online-ad businesses reliant on user data to target messages.

Shares of Goldman Sachs are tumbling sharply on Tuesday, down about 8%. Investors might be worried about trading desks, with the bank’s reported fourth-quarter trading net revenue down 7% versus the prior year.

This update summarizes current trends on governance and executive compensation. It also includes recommendations on key issues when preparing for the upcoming proxy season. This update takes into account comments made by representatives of institutional investors and governance organizations at a webinar we held recently.

America’s biggest businesses employed more female and Black finance chiefs in 2021 than ever before—albeit coming from a relatively low base—as company leaders and boards are under pressure to broaden their C-suite, a trend recruiters expect will accelerate in 2022.

More Diversity in Finance Chiefs
A greater number of large U.S. companies​have hired Black CFOs in recent years.
Number of Black CFOs in the S&P 500 and​Fortune 500
Source: Crist Kolder Associates

Almost two years into the COVID-19 pandemic, it is clear that the corporate workplace has changed for good. As the world continues to reopen and companies return to the office, what we are returning to is not business as usual, but a new future of work – a future characterized by a shift from the traditional workplace to remote and hybrid models that provide opportunities to work in effective and efficient ways from anywhere.

2021 was a busy year for activist funds, with notable investors including Starboard Value, JANA Partners and Carl Icahn pushing for meaningful change at an array of companies.

As 2022 approaches, companies are confronting an ever-expanding list of internal and external pressures on their business from a strategic, operational, governance, stakeholder and regulatory perspective. Well-advised boards of directors and management teams will need to prepare for and navigate traditional as well as evolving areas of focus in order to successfully execute on the company’s strategy. As you consider the opportunities ahead, while anticipating the inevitable challenges, we invite you to review the themes we expect to be prevalent in 2022 and beyond.

Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. (Glass Lewis) have each issued their respective proxy voting guidelines for 2022, which include a number of noteworthy revisions, summarized below. The ISS updates are available here and will apply for shareholder meetings held on or after February 1, 2022 unless otherwise noted. The Glass Lewis updates, including updated guidelines for ESG initiatives, are available here and will apply for shareholder meetings held on or after January 1, 2022 unless otherwise noted.

Big tech companies are facing the biggest expansion in potential technology regulation in a generation. And while the jury is out on whether all that sound and fury will signify anything, for the first time there are signs that the big-tech backlash could have a substantive impact.

Walmart will join Facebook, Nike, Ralph Lauren, Bumble, Disney, and a string of other companies with plans to claim their own corner of the metaverse.

Credit Suisse Group Chairman António Horta-Osório is leaving the global bank following a board investigation into his travel and personal conduct, according to people familiar with the bank.