Corporate Governance

Securities Litigation and Incidents of Fraud

Posted on January 15, 2008
With the close of 2007, we have the final statistics on the number of securities fraud class actions filed for the year.  As usual, the data can be found on the Stanford Securities Site, along with a report written by Cornerstone Research.  The data shows that the number of suits spiked in the second half of the year, for a total of 169...

Access and the Commission: The Rule of Unintended Consequences Begins

Posted on January 14, 2008
We have been meaning to mention the post at RiskMetrics about AFSCME's plans in the upcoming proxy season.  The American Federation of State, County, and Municipal Employees (AFSCME), as you might recall, was the plaintiff in the Second Circuit decision that ultimately struck down the application of the election exclusion in Rule 14a-8 to bylaw proposals that would sometimes require management to include a shareholder nominee in the company's proxy statement...

US Courts and Foreign Law Suits

Posted on January 12, 2008
In the governance area, requirements mean little unless there is a mechanism for enforcement.  In some overseas markets, governance standards sometime exceed those in the US.  At the same time, these jurisdicitions usually make it more difficult for shareholders to bring suit, whether derivative or for some type of securities like violation...

Friday Editorial: Social Responsibility, Starbucks and the McDonalds Threat

Posted on January 11, 2008
The WSJ reported this week that McDonalds would more or less elbow its way into Starbucks' turf byopening coffee bars in its 14,000 restaurants.  One of the first changes?  Sizes will be called small, medium and large, not grande, massimo and venti...

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Independent Directors and the Russian Capital Markets

Posted on January 10, 2008
Another student wrote about independent directors on the boards of Russian companies.  The data casts some interesting insights into the use of these directors in the United States.  There has been considerable debate over the value of independent directors on the boards of US companies...

Corporate Governance in the UK (Part 3)

Posted on January 10, 2008
We have been discussing differences in the system of corporate governance between the US and the UK. One of the potentially most significant changes made in the mammoth revision of the Companies Act in 2006 was a change in the fiduciary duty standards imposed on directors...

Corporate Govenance and the United Kingdom (Part 2)

Posted on January 09, 2008
In an earlier post, we discussed some of the governance provisions contained in theCombined Code on Corporate Governance in the United Kingdom.  These included a separation of chairperson and CEO, a definition of director independence that corrected for structural bias, and increases responsibilities on the board for communicating with shareholders...

The Five Worst Delaware Cases: A Comment

Posted on January 08, 2008
We posted on this Blog our view of the five most anti-shareholder cases issued by Delaware courts in 2007.  We rarely point out a comment on a post but it is worth reading the note left by Francis Pileggi who writes on the Delaware Corporate and Commercial Litigation Blog, a blog I consult on a regular basis...

International Corporate Governance: Pedagogical and Practical Lessons

Posted on January 07, 2008
A critical component of this Blog (but one not fully plumbed) concerns the lessons that the United States can learn from overseas practices.  At the turn of the century, there was a tendency to look at US corporate governance as the pinnacle, as if it couldn't get much better...

Corporate Governance, Federal Preemption, and the 2008 Presidential Race

Posted on January 04, 2008
We have talked a great deal on this Blog about the weakness and bias of the Delaware system of corporate governance and surmised that it will lead to greater federal preemption.  SEC control over audit committees, something in SOX, is the most recent example of actual preemption...

Delaware's Top Five Worst Shareholder Decisions of 2007

Posted on January 03, 2008
As the year comes to an end, we review the decisions issued by the Delaware courts.  These are the decisions that most show the anti-shareholder, anti-plaintiff nature of the Delaware courts and reflect the race to the bottom.  We have many choices, but the five that most fit this criteria are discussed below...

SEC's Five Most Anti-Investor Actions of 2007

Posted on January 02, 2008
With the advent of the new year, we look back on the decisions of the SEC during 2007.  As wehave written, the Commission has played and will continue to play an active role in the corporate governance process.  But over the year, the Commission has made some really bad decisions, inconsistent with that mission...

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