The coronavirus pandemic is negatively impacting business across the board—already struggling businesses are being pushed into insolvency and previously healthy companies are experiencing a new time of financial distress. Proskauer Rose attorneys say it’s more important now than ever that directors exercise good corporate governance, both to keep their business afloat and to avoid liability. The Covid-19 outbreak, and the measures that governments around the world have taken to counter it, has seriously and negatively impacted businesses across all industries and eliminated or greatly reduced many companies’ sources of revenues.
This guide provides a suggested framework for fund managers and asset owners to incorporate ESG factors into hedge fund strategies. The heterogeneous nature of hedge funds as an asset class means there are important differences from long-only funds in terms of how they might incorporate, develop and implement a responsible investment (RI) policy. Due to the sheer breadth and range of trading instruments and market strategies spanning equities, fixed income, commodities and FX, some hedge funds are likely to be better placed to integrate an RI policy than others.
Corporate governance, B.C. (Before Coronavirus): A rock concert-sized crowd of shareholders packs into an arena in Omaha every year to hear from Warren Buffett (and buy discount Hanes underwear and other Berkshire Hathaway products). Corporate governance, A.D. (After Disruption): Businesses sit empty, the economy contracts, and companies must adjust the way their organizations operate, often on the fly. Some changes resulting from the pandemic may be temporary, and will fade with the threat of infection. Other changes will be transformational and will mark the spring of coronavirus as a sharp dividing line between the past and a new future.
A New York investment firm pitched wealthy investors in recent days on a way to make returns of 22% to 175% using U.S. government programs designed to help Americans keep their jobs and boost the coronavirus-stricken economy, according to a marketing document seen by Reuters.
Personal computer and printer maker HP Inc. said today it’s adopting a limited-duration shareholder rights plan to try to stave off a hostile takeover attempt from the much smaller Xerox Corp.
Activist investor and Wall Street giant Carl Icahn owns around 3% of oil company Occidental Petroleum and wrote a scathing letter to the company’s management team. At the core of the letter is one key question: was Occidental approached by a potential buyer prior to entering into an agreement to buy Anadarko Petroleum for $37 billion, according to a Bloomberg report.
Deux importantes sociétés d’assurances de Québec vont annoncer mercredi leur intention de regrouper leurs activités, a pu confirmer La Presse. L’union de La Capitale et de SSQ Assurance doit mener à la création de la plus grande mutuelle d’assurance au pays.
Xerox Holdings Corp. announced today that it will nominate 11 new directors to HP Inc.’s board in a bid to push through its proposed acquisition of the personal computer and printer maker.
The CEOs of 150 major US public companies recently pledged to act for all of their "stakeholders" – customers, employees, suppliers, communities and yes, even stockholders.1 Much commentary ensued. But before we get too excited about whether these CEOs are grasping the mantle of government to act on behalf of the citizenry and other people who aren't paying them, there is the prior question of whether, as a matter of Delaware law, they can.
The Finance Commission of the French National Assembly has announced a report that will recommend reforms to French securities market regulations to address shareholder activism and market transparency. The report’s recommendations focus on responding to the excesses of activists in the French market with enhanced disclosure, reduced asymmetry of regulation between activist investors and French public companies and enhanced regulations with respect to short selling.
When Pershing Square CEO Bill Ackman sold out of his investment in ADP last month, he crystalized his first performance fee in years. No matter what happens in the market — or the rest of its portfolio — Pershing Square will be pocketing a $60 million performance fee this year from the co-investment fund he raised to invest in ADP, according to Institutional Investor’s calculations. It will be the first year since 2014 that the firm is guaranteed to earn a performance fee.
I don’t buy either criticism. As for mandatory rules, it is true that “Contractarians contend that corporate law is generally comprised of default rules, from which shareholders are free to depart, rather than mandatory rules. As a normative matter, contractarians argue that this is just as it should be.”
At the request of the World Economic Forum, together with a team of my Wachtell Lipton colleagues, I prepared “The New Paradigm: A Roadmap for an Implicit Corporate Governance Partnership between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth,” which was issued in September 2016.
They say crisis reveals character, and the coronavirus crisis has certainly revealed what we’re made of. As country after country adopted emergency measures, businesses began to show their true colors. Some rose to the occasion. Yet, we can also find media stories of businesses that have not reacted so well. While every company has been forced to do some form of damage control, some of the damage has been of their own making. As one headline reminds us: “How companies behave amid coronavirus will determine their fate later.” [...] In one of the live sessions that we began offering on LinkedIn, a participant asked: “Is redundancy compatible with having shareholders and investment funds that only expect short-term profits and returns?” To which my colleague Miguel A. Ariño responded with an emphatic “No.” While sensitivities are changing in this regard, he admitted that this mindset still hadn’t filtered through to many directors.
The coronavirus pandemic has had a profound impact on corporate governance, including annual shareholder meetings. Large numbers of companies are moving their annual meetings online this year for health and safety reasons. The question presented by the Covid-19 response is whether the surge in virtual-only meetings is a one-time emergency response or a permanent shift in shareholder engagement. Shareholder meeting requirements come from state law. The Securities and Exchange Commission does not require annual meetings, and the major exchange rules do not require any particular meeting form. Issuers must look to their particular state law provisions and their company bylaws to determine if they may conduct virtual meetings.
In less than a week the Federal Reserve has been merged with the U.S. Treasury (implying it wasn't always that way) and BlackRock, the world's largest and most powerful financial services institution, has been put in charge of executing future acquisitions and trades.
The nature of change in business today differs from the past in both magnitude and pace: Technology is disrupting fundamental business models, forcing transformation across whole industries. According to a 2019 Accenture study, 71 percent of 10,000 companies in 18 industry sectors are “either in the throes of or on the brink of significant disruption.”
With the closing of the comment period on the Securities and Exchange Commission (SEC)’s proposed new rules on proxy voting advisers and shareholder proposal submission thresholds, a small band of activists formed part of the cavalry determined to halt or water down the reforms.
Crisis management expert Michael Toebe interviews one of the nation’s leading experts on corporate governance to discuss the risky practice of overboarding – a deep concern among stakeholders.
Swedish prosecutors have expanded a criminal probe of Bombardier Inc.’s business activities in Azerbaijan to include allegations of money laundering, according to court documents that zero in on the banking activity of the Canadian transportation giant’s former Russian partners.
Barneys New York owner Richard Perry isn’t the only deep-pocketed money manager to watch over the decline of a storied retailer. Investors from Eddie Lampert—once lauded as the next Warren Buffett—to Bill Ackman have taken on clothing chains only to walk away with their wallets and reputations in tatters. The retailers’ fates might not have otherwise been any different, but the managers could have done without the experience.
Under the Delaware Chancery Court decision in the Caremark case, directors can be liable for failures in their oversight duties – that is, their duties to monitor the company and its functions. Lawsuits alleging a violation of the duty of oversight are notoriously challenging for plaintiffs. However, in the recent Marchand v. Barnhill case, the Delaware Supreme Court reversed the Chancery Court’s dismissal of a Caremark liability case and allowed the case to proceed against the board of an ice cream manufacturer that experienced a deadly listeria outbreak. Caremark liability cases remain difficult to plead and prove, but the Marchand decision nevertheless has important implications for director liability for breaches of their duty of oversight.
In 2012, Google’s board approved a proposal amending Google’s charter to authorize the issuance of a new class of nonvoting Class C stock. Prior to this proposed recapitalization, Google’s capital structure was comprised of one-vote-per-share Class A shares, primarily held by public shareholders, and ten-votes-per-share Class B shares, primarily held by Google’s founders, Larry Page and Sergei Brin.
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