Top IPO, Weak Governance
SpaceX is preparing what could become the largest IPO ever, targeting up to $75 billion in proceeds and a valuation exceeding $2 trillion. The company will issue one‑vote Class A shares to the public while retaining ten‑vote Class B shares for Elon Musk and related entities. This dual‑class design creates a small‑minority controller who can sell most of his equity yet keep decisive voting power. Analysts warn that the perpetual nature of this structure could lock in inefficient decision‑making as Musk ages, eroding shareholder value.
Court Order Signals New Era for Shareholder Proposals Under Rule 14a-8
A U.S. District Court ordered BJ’s Wholesale Club to include a shareholder proposal demanding a deforestation‑risk assessment of its private‑label brands, marking the first injunction compelling inclusion under Rule 14a‑8. The decision rejects the company’s reliance on the “ordinary business” exclusion...
SEC’s Recent Public Company Settlement Provides Guidance for Corporate Resolutions Under the Current Administration
On April 20, 2026, the SEC settled an enforcement action against Key Tronic Corp. and two senior executives for violations of books‑and‑records and internal‑control provisions. The company agreed to cease the conduct but faced no civil monetary penalty, while the...
Recent Developments Affecting US Public Companies and Boards
Boards of U.S. public companies are expanding oversight to include capital‑strategy, AI governance, cybersecurity, and shareholder‑proposal processes. The financing landscape now features private credit, insurance capital, and hybrid instruments, prompting continuous board monitoring of capital structure. Recent court rulings expose...
CEO/Chair Leadership: When and Why Boards Combine or Separate the Roles
In 2025, 42% of S&P 500 companies still have the CEO serving as board chair, down from 47% in 2020, while only 4.6% of CEO successions combined the two roles. Most large‑cap firms (79% of S&P 500, 71% of Russell 3000) disclose policies...
Not New: A Response to Claims About “New Control” In Control and Its Discontents
J. Travis Laster’s response dismantles the claim that recent Delaware decisions—Match, Sears Hometown, and Tornetta—constitute a novel break from precedent. He demonstrates that the entire‑fairness doctrine has long applied to a range of controlling‑stockholder conflicts, not just freeze‑outs, and that fiduciary duties...
Delaware Law Permits Companies to Adopt Mandatory Arbitration Clauses for Federal Securities Claims
Freshfields’ memorandum argues that Delaware’s General Corporation Law does not forbid mandatory arbitration clauses for federal securities claims, contrary to prevailing commentary. The SEC’s September 2025 decision removed restrictions on such clauses, promising lower defense costs and fewer class‑action pressures....
Delaware Law Permits Companies to Adopt Mandatory Arbitration Clauses for Federal Securities Claims
In September 2025 the SEC removed limits on mandatory arbitration clauses for federal securities claims, opening the door for companies to shift shareholder disputes out of court. Freshfields argues that Delaware law does not bar such clauses; the newly amended DGCL...
Control Issues: Delaware Holds Parties to Their Bargain in Recent Governance Decisions
Delaware courts reaffirm their contractarian approach in three recent Chancery rulings, emphasizing that parties must adhere to the explicit control mechanisms they draft. In Ropko et al. v. McNeill, Jr., a unilateral removal consent was invalidated because the voting agreement...
AI Corporate Governance and Ben & Jerry’s Risk
Harvard Law scholars Jesse Fried and Idan Reiter argue that AI firms such as OpenAI and Anthropic embed a structural conflict by installing self‑appointed mission guardians who can override profit‑seeking investors. They label the failure of Unilever’s Ben & Jerry’s guardian experiment...
Remarks by Chairman Atkins on the Role of Economic Analysis in Financial Market Regulation
Chairman Paul Atkins announced a strategic shift at the SEC toward rigorous economic analysis in enforcement, moving away from a focus on the sheer number of actions. He highlighted the appointment of Enforcement Director David Woodcock to lead a more...
Remarks by Chairman Atkins on AI Innovation, Capital Markets, and Regulatory Flexibility
Chairman Paul Atkins urged the SEC to adopt a flexible, innovation‑friendly stance toward artificial intelligence and on‑chain financial markets. He highlighted the agency’s past success with the Reg ATS framework and recent blockchain guidance as models for future rulemaking. Atkins...
Prevalence of CEO Personal Security Perquisites Continues to Rise
The Compensation Advisory Partners (CAP) study of 90 large‑cap U.S. public firms shows CEO personal‑security perquisites rising to 44.4% in 2025, continuing a pre‑existing upward trend. The UnitedHealthcare CEO shooting in December 2024 heightened board attention, but proxy data indicate the...
Weekly Roundup: May 1-7, 2026
Harvard Law School’s Forum on Corporate Governance released a weekly roundup covering ten new posts that examine shifting dynamics in board composition, regulatory enforcement, and ESG narratives. Highlights include a study on the rising average age of CEOs, analysis of...
Leader-Follower Dynamics in Shareholder Activism
The authors analyze leader‑follower dynamics in hedge‑fund activist "wolf‑pack" campaigns, showing that a lead investor can use its initial market trades to signal intent and attract like‑minded followers. Leaders typically acquire about 1% of a target’s shares before hitting disclosure...
Defending the Disclosure Ecosystem: The Essential Role of Shareholder Proposals and Regulation S-K
The SEC’s Division of Corporation Finance is reviewing Regulation S‑K and may trim disclosure requirements, citing information overload. The Shareholder Rights Group warns that reducing mandatory filings would damage a disclosure ecosystem where shareholder proposals spark voluntary reporting that later feeds...
SEC Enforcement FY2025 Results Signal Shift in Priorities in Direct Critique of Prior Administration
The SEC’s Division of Enforcement reported 456 actions for FY2025, the lowest in two decades, and roughly $18 billion in monetary relief, though core penalties and disgorgements fell to about $2.6 billion. The report sharply criticized the prior Commission’s focus on headline‑driven,...
Why Employee Share Ownership Matters for Long-Term Value Creation
Norges Bank Investment Management argues that employee share ownership drives long‑term value for companies, shareholders, workers and society. The fund notes the practice is most common in East Asia and larger European firms, while U.S. adoption is growing in retail,...
Chancery Finds Investment Manager’s Board May Have Breached Fiduciary Duties, Aided and Abetted by the Buyer
The Delaware Court of Chancery, at the pleading stage of YWCA of Rochester and Monroe Cty. v. Hatteras Funds, found that the investment manager’s board and its controller may have breached fiduciary duties in a master‑fund asset sale, with the...
The Path to the Boardroom for Technology Executives
Technology executives are increasingly in demand for public-company boards as AI, cyber resilience and digital models become strategic priorities. Russell Reynolds Associates found that 47% of boards worldwide already have at least one former CIO or CTO, but only 8% of...
What Explains the Rise in CEO Age?
CEO ages in the United States have risen dramatically, reaching an average of 61 in 2023—about ten years higher than in 2000. The typical age at appointment climbed from under 48 to 55, indicating that firms are hiring older leaders...
Remarks by Chairman Atkins on Capital Formation, IPO Incentives, and the SEC’s Regulatory Approach
Chairman Paul S. Atkins warned that the U.S. IPO pipeline has shrunk about 40% since the mid‑1990s, blaming complex regulations and delayed public offerings. He highlighted that most companies now wait until a Series E round before going public, limiting capital...
Speech by Commissioner Peirce on Materiality, Disclosure Limits, and the SEC’s Role in Capital Formation
Commissioner Hester Peirce urged the SEC to streamline IPO disclosures and lower compliance costs, especially for small issuers. She announced a fresh review of Regulation S‑K and clarified that mandatory arbitration clauses will not impede accelerated registration effectiveness. Peirce raised questions...
Remarks by Chairman Atkins on International Cooperation and the Future of Global Securities Market Regulation
Chairman Paul S. Atkins marked the 35th anniversary of the SEC’s International Institute, hosting 180 delegates from 54 jurisdictions. He highlighted the Institute’s role in fostering cross‑border regulator cooperation, from policy alignment to enforcement collaboration. The speech underscored the importance...
DOL Guidance Creates New ERISA Risks for Proxy Advisory Arrangements
On April 14, 2026 the U.S. Department of Labor issued Technical Release 2026‑01, clarifying that proxy‑advisory firms providing fee‑based recommendations to ERISA‑covered plans can be deemed fiduciaries under the agency’s long‑standing five‑part test. The guidance does not amend the proxy‑voting...
Board Oversight of AI: Do Boards Need AI Experts?
Boards are grappling with how to oversee rapidly expanding AI initiatives while meeting fiduciary duties. The article outlines three considerations: the scarcity and governance challenges of appointing a dedicated AI expert, the legal ability to rely on management and outside...
The Deepening DEI Dilemma
U.S. companies are confronting a wave of anti‑DEI pressure after President Trump’s Jan. 21, 2025 executive order revoked federal affirmative‑action rules and the DOJ issued guidance targeting DEI programs that receive federal funds. Proxy advisers ISS and Glass Lewis responded by suspending diversity...
Financial Institutions M&A Key Trends and Outlook
The regulatory climate for U.S. financial institutions softened in 2025, prompting a wave of mergers and acquisitions. Capital One’s $51.8 billion purchase of Discover and Vice‑Chair Miki Bowman’s call for pragmatic supervision catalyzed a second‑half surge in bank deals. Across the...
Weekly Roundup: April 17-23, 2026
Harvard Law School’s Forum weekly roundup (April 17‑23, 2026) covered a spectrum of governance issues, from SEC Commissioner Hester Peirce’s warning about the Consolidated Audit Trail’s multi‑billion‑dollar cost and privacy risks to ISS’s legal challenge against Indiana’s proxy‑filing statute. The collection also...
Delaware Supreme Court Rejects Bright Line Rules in Section 220 Books and Records Proceedings
The Delaware Supreme Court ruled 3‑2 that the Court of Chancery may consider post‑demand evidence and reputable anonymous‑source news reports when evaluating a stockholder’s “credible basis” under Section 220 of the Delaware General Corporation Law. The decision arose from a dispute...
Early Filers: CEO Compensation Up; Bonus Payout at Target
Compensation advisory firm CAP found that median CEO total direct compensation among 50 early‑filing companies rose 8% year‑over‑year, driven primarily by a 9% increase in grant‑date long‑term incentive value. Annual bonus payouts remained tightly anchored to target, with a median...
Litigation Against the SEC Has Spiked in Recent Years. Why?
Amanda Rose’s forthcoming Texas Law Review article documents a sharp rise in lawsuits against the SEC, especially in the 2020s. She applies a rational‑actor model, showing that market participants weigh the expected benefits of victory against litigation costs, including reputational...
How a Buyer’s AI Conversations Sank Its Earnout Avoidance Strategy
The Delaware Court of Chancery ruled that Krafton breached its Equity Purchase Agreement by terminating Unknown Worlds' key executives without contractual cause and seizing operational control of the studio. The court reinstated the studio's CEO, enjoined Krafton from circumventing that...
The (Missing) Relation Between Acquisition Announcement Returns and Value Creation
The paper by Ben‑David, Bhattacharya, Huang and Jacobsen shows that the cumulative abnormal return (CAR) around acquisition announcements does not predict actual deal outcomes. Analyzing over 47,000 deals from 1980‑2018, the authors find no correlation between CAR and goodwill impairments,...
Key Considerations for the 2026 Annual Reporting and Proxy Season: Proxy Statements
White & Case’s Public Company Advisory Group warns that the 2026 proxy season will be shaped by a more limited SEC role in Rule 14a‑8 shareholder‑proposal exclusions, a new executive order curbing proxy‑advisor influence, and heightened board‑risk‑oversight expectations around AI, cybersecurity and...
Statement by Commissioner Peirce on the Costs, Risks, and Privacy Concerns of the Consolidated Audit Trail
Commissioner Hester Peirce announced the SEC’s new concept release aimed at overhauling the Consolidated Audit Trail (CAT). She highlighted that CAT’s annual budget has ballooned from an estimated $55 million in 2016 to almost $250 million, and that the system remains years...
Agent Washing: Disclosure Risks in the Emerging Market for AI Agents
The article introduces “agent washing,” a new disclosure risk where companies label ordinary automation as autonomous AI agents or exaggerate agents’ capabilities and business impact. Overstated claims make firms vulnerable to regulator, plaintiff, and investor scrutiny because specific agent functions...
Sponsor-Designated Lenders’ Counsel
Borrower‑designated lenders’ counsel has become the norm in U.S. leveraged‑buyout financing, allowing a single law firm to represent all potential lenders during the financing auction. The practice, praised for efficiency, also gives sponsors significant influence over lender counsel, aligning lawyer...
From No‑Action to Court Action: Rule 14a‑8 Exclusions Face Legal Scrutiny
The SEC’s Division of Corporate Finance announced it would no longer issue substantive no‑action letters for Rule 14a‑8 shareholder‑proposal exclusions, allowing companies to rely on a simple representation of a reasonable basis. This shift has sparked a wave of lawsuits in...
How Germany’s Regulatory Reset Changes Investor Engagement and What It Means for The Market
Germany’s securities regulator BaFin announced on 20 March 2026 a narrowed definition of “acting in concert,” limiting attribution to binding, long‑term agreements on issuer policy. The change follows a CJEU ruling that deemed the previous broad interpretation incompatible with EU law. As...
Reaffirming the Fundamental Right to Shareholder Proposals and Enhancing Board Accountability via Private Ordering
The Council of Institutional Investors (CII) released two spring 2026 policy amendments affirming shareholder proposals as a fundamental right and obligating boards to disclose how they will respond when jurisdictions dilute shareholder protections. The first amendment inserts language that voting on...
Peer Group Governance
Peer groups, once a niche tool for executive‑pay benchmarking, now shape corporate governance across the S&P 1500. The new study shows 93% of these firms use peer lists, typically 14‑17 firms, and that governance reforms at peers strongly predict similar moves...
Shifting Sentiments Around Long-Vesting RSUs
Semler Brossy notes a growing debate over long‑vesting RSUs as an alternative to performance share units (PSUs) amid macro‑economic volatility. ISS’s 2026 guidelines now classify time‑based equity with at least three‑year vesting and a five‑year total horizon as performance‑based, opening...
Delaware LLC Parties Cannot Bypass Fiduciary Waivers via Implied Covenant
The Delaware Court of Chancery dismissed a post‑closing lawsuit challenging VillageMD’s $9 billion acquisition of CityMD, affirming that an LLC operating agreement can expressly waive fiduciary duties. The court held that plaintiffs could not invoke the implied covenant of good faith...
Meta’s New Executive Pay Plan Ties Nearly $1 Billion to Stock Performance
Meta Platforms unveiled an executive compensation plan that mirrors Tesla’s high‑stakes equity model, tying nearly $1 billion in potential payouts to stock‑price appreciation. Chief Technology Officer Andrew Bosworth, Chief Product Officer Chris Cox and Chief Operating Officer Javier Olivan each receive...
Weekly Roundup: April 3-9, 2026
Harvard Law School’s Corporate Governance Forum released a weekly roundup covering 15 thought‑leadership pieces published April 3‑9, 2026. Topics range from C‑suite mentoring and performance‑share‑unit mandates to the emerging “DExit” movement away from Delaware incorporation. The collection also spotlights SEC guidance...
Against Limited Liability
Law professor Lynn M. LoPucki argues that limited liability, while praised for attracting capital, has become a massive source of social waste. He cites Michael Simkovic’s estimate that the doctrine externalized about $4.3 trillion in 2017—roughly 20% of U.S. GDP—by allowing...
When Fiduciaries Collide: Foreshadowing a Looming Conflict in Corporate Governance
The article outlines a potential clash between two sets of fiduciaries: a Delaware corporate board and a retirement‑fund trustee who also holds shares in the company. The trustee argues that the firm’s low‑wage practices and carbon emissions create systemic economic...
SEC Speaks 2026: What Public Companies and Investment Advisers Need to Know
The SEC’s 2026 conference underscored a return to traditional financial materiality, with Commissioners Uyeda and Peirce warning against overly broad ESG‑type disclosures. Chair Paul Atkins introduced the ACT (Advance, Clarify, Transform) framework to modernize rules, cut unnecessary filings, and streamline...
Consumers Cut Back, CEOs Depart, and Boards Act
Consumer‑sector CEO turnover surged to a record 17% in 2025, with departing leaders averaging just 6.3 years in the role—the shortest tenure of any industry. Boards reacted by leaning toward candidates with prior public‑company CEO experience, yet almost half still...