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Directors’ use of external work email leaves the correspondence vulnerableIssue: 2021 Annual ReportEvery business depends on email to communicate with its key constituencies, including directors. However, a recent Delaware Chancery Court decision reminds us of the risks directors run when they rely on email to communicate sensitive matters. The decision provides another reason why directors shoul...
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A Decade of Say on PaySay on pay launched in 2011, born out of the SEC’s efforts to reform corporate governance under Dodd-Frank. This non-binding advisory vote, which is an annual event at most companies, allows shareholders to cast votes for or against named executive officer (NEO) compensation. Although it’s a non-bin...
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Say on Climate? Aligning Compensation and Incentives With Climate RiskIssue: 2021 Annual ReportA new governance landscape emerged in corporate America during the first half of 2021. Climate risk and transition considerations rose to the top of investors’ and regulators’ priorities, including Larry Fink’s statement that “Climate transition presents a historic investment opportunity” and Presid...
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Long-Term Stock Exchange Puts ESG Front and CenterThe Long-Term Stock Exchange (LTSE) will list its first two companies in August.The LTSE, launched last September, is meant to attract long-term investors. Its listed companies will commit to adopting strong ESG stances that benefit stakeholders, in contrast to prioritizing short-term return for sha...
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Picking the Good Fight: Leadership in the Boardroom and C-SuiteThis piece was originally published by RHR International in an e-book, Building and Sustaining Great Boards.Leadership in the boardroom and the C-suite increasingly requires a balance of wisdom and mettle.This is particularly true in the age of activist investors, social media and proxy advisory fir...
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The End of Private Equity?Issue: 2021 Annual ReportIf you were a director or an officer of a public company over the last 35 years and were tasked with choosing a buyer for your company, it was a pretty easy decision: You sold to the highest bidder. Ever since the Delaware Supreme Court decided Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. ...
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Some Thoughts for Boards of Directors: Key Corporate Governance Issues at Mid-Year 2021This memo was originally published by the law firm Wachtell, Lipton, Rosen & Katz.Last year, we did a mid-year edition of our annual Thoughts for Boards of Directors to highlight key issues and considerations in managing the challenging business environment and profound upheaval caused by the pa...
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Patriotic Capitalism: What Does Corporate America Owe the Country?Issue: 2021 Annual ReportIn 2012, then-President Barack Obama gave a speech in which he referenced government investments in infrastructure. It was the kind of stump speech that might have gotten a day of coverage and then slipped from the collective consciousness, but for one simple line: “If you've got a business, you did...
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Are SPAC Board Structures a ‘Conflict-Laden’ Invitation to Fiduciary Misconduct?Without a doubt, the trendiest transactions on Wall Street during 2020 and the first half of 2021 were the formation of special purpose acquisition corporations (SPACs) and the follow-on mergers (known as “de-SPAC” transactions) that enable private companies to achieve public company status without ...
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SASB and IIRC Merge to Create Consistent ESG ReportingAs shareholders, employees and other stakeholders bring ESG to the fore, directors and management have lamented that there are no consistent, measurable standards by which to measure corporate efforts and advancements.The Sustainability Accounting Standards Board (SASB) and the International Integra...
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What Management Really Thinks About the Board and What to Do About ItFor many companies, 2020 was a transformative year and while that was positive for some boards and management teams, some fault lines were also exposed. A survey of more than 500 C-suite executives by PwC and The Conference Board found stresses that could, if left unaddressed, lead to big problems d...
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Climate Governance at an ‘Inflection Point’ for Big OilIn the matter of 24 hours, ExxonMobil lost at least two board seats (UPDATE: Engine No.1 gained three seats) to activist investors, Chevron shareholders pushed for that company to reduce its emissions and a district court in The Hague ordered Royal Dutch Shell to reduce its emissions by nearly half ...
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What Directors Can Learn From IPOsAfter a lull during the financial crisis that started in 2008, initial public offerings (IPOs) have made a resurgence. While the pandemic slowed down most economic and financial activity, 2020 was the best year for IPOs in over a decade: 165 IPOs raised $61.9 billion in the U.S. Remarkably, we find ...
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My Board Journey: Merrie Frankel: Director, Agree Realty Corporation; President, Minerva Realty ConsultantsIssue: 2021 First QuarterWhat was the first board you joined?Agree Realty Corporation was the first public board I joined. I was introduced to Joey Agree, the CEO, by a former board member who had known both Joey and me for about 25 years. Agree Realty was looking for a real estate capital markets person, which is my niche....
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The Path to Defining DiversityThe movement against racial inequality, coupled with ESG principles, has intensified pressure on boards to refresh with “diversity” candidates. Political agitation is also intensifying, as states like California and exchanges such as Nasdaq propose stricter issuer compliance for diverse board compos...
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Latino Board Appointments Up 331% In First QuarterThe needle is starting to move for Latinos on corporate boards.After a major push from both legislators in a number of states and organizations including Nasdaq that petitioned to add board diversity reporting as a requirement of being listed on the exchange, 82 Latino directors were appointed to pu...
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Board of the Past Won’t Take Your Company into the FutureWe’re in a new world — one that requires a new paradigm of management leadership and board oversight. With tension finally starting to ease on the heels of 2020’s prospect for unparalleled economic collapse, escalating social and political turmoil, and catastrophic climatic shifts, ...
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Red Corporation, Blue Corporation? Corporate political speech becomes a board issueIssue: 2021 Second QuarterAfter the January 6 attack on the U.S. Capitol, many companies announced that they would halt political contributions, either permanently or for a defined period. Some discontinuations involved a particular political party, some individual legislators and some were complete stops on all contribution...
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U.S. Politics and Corporate Speech: A Two-Edged SwordIssue: 2021 Second QuarterIn its 2010 Citizens United decision, the Supreme Court gave corporations relatively unlimited free-speech rights to spend corporate funds for political causes and candidates. A part of the majority’s reasoning was that if corporate media entities — for example, The New York Times, The Wall Street J...
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Two Views: Government-Corporate Partnerships: Yea or Nay? "The Social Side of Teaming Up"Issue: 2021 Second QuarterIf boards of directors and senior managers have not already examined their relationships with government entities from a “big picture” perspective, now is the time to get serious about the endeavor, and I don’t just mean laws and regulations that might fall under a compliance rubric. In an environme...