Business Commons^™

Hedge Fund Activism, Poison Pills, And The Jurisprudence Of Threat, William W. Bratton

All Faculty Scholarship

This chapter reviews the single high profile case in which twentieth century antitakeover law has come to bear on management defense against a twenty-first century activist challenge—the Delaware Court of Chancery’s decision to sustain a low-threshold poison pill deployed against an activist in Third Point LLC v. Ruprecht. The decision implicated an important policy question: whether a twentieth century doctrine keyed to hostile takeovers and control transfers appropriately can be brought to bear in a twenty-first century governance context in which the challenger eschews control transfer and instead makes aggressive use of the shareholder franchise. Resolution of the question …

Notable Governance Failures: Enron, Siemens And Beyond, Michael Primbs, Clara Wang

Comparative Corporate Governance and Financial Regulation

No abstract provided.

Executive Compensation, Moritz Reinhard, Daniel Velazquez Escobar

Comparative Corporate Governance and Financial Regulation

No abstract provided.

Executive Compensation: Mannesmann V. Disney - A Case Study, Do Hee Jeong, Maurice Weidhaas

Comparative Corporate Governance and Financial Regulation

No abstract provided.

The New Governance And The Challenge Of Litigation Bylaws, Jill E. Fisch

All Faculty Scholarship

Corporate governance mechanisms designed to ensure that managers act in shareholders’ interest have evolved dramatically over the past forty years. “Old governance” mechanisms such as independent directors and performance-based executive compensation have been supplemented by innovations that give shareholders greater input into both the selection of directors and ongoing operational decisions. Issuer boards have responded with tools to limit the exercise of shareholder power both procedurally and substantively. This article terms the adoption and use of these tools, which generally take the form of structural provisions in the corporate charter or bylaws, the “new governance.”

Delaware law has largely taken …

Governmental Intervention In An Economic Crisis, Robert K. Rasmussen, David A. Skeel Jr.

All Faculty Scholarship

This paper articulates a framework both for assessing the various government bailouts that took place at the onset of Great Recession and for guiding future rescue efforts when they become necessary. The goals for those engineering a bailout should be to be as transparent as possible, to articulate clearly the reason for the intervention, to respect existing priorities among investors, to exercise control only at the top level where such efforts can be seen by the public, and to exit as soon as possible. By these metrics, some of the recent bailouts should be applauded, while others fell short. We …

How Corporate Governance Is Made: The Case Of The Golden Leash, Matthew D. Cain, Jill E. Fisch, Sean J. Griffith, Steven Davidoff Solomon

All Faculty Scholarship

This Article presents a case study of a corporate governance innovation—the incentive compensation arrangement for activist-nominated director candidates colloquially known as the “golden leash.” Golden leash compensation arrangements are a potentially valuable tool for activist shareholders in election contests. In response to their use, several issuers adopted bylaw provisions banning incentive compensation arrangements. Investors, in turn, viewed director adoption of golden leash bylaws as problematic and successfully pressured issuers to repeal them.

The study demonstrates how corporate governance provisions are developed and deployed, the sequential response of issuers and investors, and the central role played by governance intermediaries—activist investors, institutional …

Does Majority Voting Improve Board Accountability?, Stephen Choi, Jill E. Fisch, Marcel Kahan, Edward B. Rock

All Faculty Scholarship

Directors have traditionally been elected by a plurality of the votes cast. This means that in uncontested elections, a candidate who receives even a single vote is elected. Proponents of “shareholder democracy” have advocated a shift to a majority voting rule in which a candidate must receive a majority of the votes cast to be elected. Over the past decade, they have been successful, and the shift to majority voting has been one of the most popular and successful governance reforms.

Yet critics are sceptical as to whether majority voting improves board accountability. Tellingly, directors of companies with majority voting …

Gender Diversity On Corporate Boards: The Competing Perspectives In The U.S. And The Eu, Tyler Winters, Madhuri Jacobs-Sharma

Comparative Corporate Governance and Financial Regulation

No abstract provided.

The Role Of Private Litigation, Benedict Heil, Benjamin Lee

Comparative Corporate Governance and Financial Regulation

No abstract provided.

The Manner In Which Corporate Law And Financial Regulations Are Made, Supawich Sirikanchana, Sharareh Zand

Comparative Corporate Governance and Financial Regulation

No abstract provided.