Corporate Law: Corporate Governance Law eJournal最新文献

{"title":"Determinants and Career Consequences of Early Audit Partner Rotations","authors":"Brandon Gipper, Luzi Hail, C. Leuz","doi":"10.2139/ssrn.3934660","DOIUrl":"https://doi.org/10.2139/ssrn.3934660","url":null,"abstract":"We examine how often and why some audit partners rotate off client engagements before the end of the maximum five-year cycle period. Specifically, we investigate whether audit quality issues play a role for engagement partners and clients to separate prematurely. For a sample of about 4,000 within-audit firm partner rotations for Big 6 clients over the 2008 to 2014 period, we find that client characteristics such as financial leverage or performance have little explanatory power. In contrast, severe audit quality issues such as financial restatements or PCAOB inspection findings are associated with early partner rotations. These associations are more pronounced for early rotations that are not explained by scheduled retirements, promotions, or temporary leaves as well as for large clients and when partners are less experienced. We also find that female partners have a higher likelihood of early rotation for audit quality reasons. Early rotations have career consequences. Partners are assigned to fewer SEC issuer clients, manage fewer audit hours, receive lower partner ratings, and are more likely to be internally inspected after being rotated early. Our results suggest that audit quality concerns are an important factor for early partner rotations with ensuing negative career consequences for partners’ client assignments and management responsibilities.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133079290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Who's Looking Out For The Banks?","authors":"Jeremy C. Kress","doi":"10.2139/ssrn.3905962","DOIUrl":"https://doi.org/10.2139/ssrn.3905962","url":null,"abstract":"When the Gramm-Leach-Bliley Act authorized financial conglomeration in 1999, Professor Arthur Wilmarth, Jr. presciently predicted that diversified financial holding companies would try to exploit their bank subsidiaries by transferring government subsidies to their nonbank affiliates. To prevent financial conglomerates from taking advantage of their insured depository subsidiaries in this way, policymakers instructed a bank’s board of directors to act in the best interests of the bank, rather than the bank’s holding company. This symposium Article, written in honor of Professor Wilmarth’s retirement, contends that this legal safeguard ignores a critical conflict of interest: the vast majority of large-bank directors also serve as board members of their parent holding companies. These dual directors are therefore poorly situated to exercise the independent judgment necessary to protect a bank from exploitation by its nonbank affiliates. This Article proposes to strengthen bank governance — and better insulate banks from their nonbank affiliates — by mandating that some of a bank’s directors must be unaffiliated with its holding company. As long as banks are permitted to affiliate with nonbanks, this reform is essential to ensure that someone is looking out for the well-being of insured depository institutions.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130151904","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Determinants of Insider Trading Windows","authors":"W. Guay, Shawn Kim, David Tsui","doi":"10.2139/SSRN.3844986","DOIUrl":"https://doi.org/10.2139/SSRN.3844986","url":null,"abstract":"Most publicly-traded firms adopt insider trading policies that establish pre-specified quarterly windows when insiders are allowed to trade. However, relatively little is known about how boards determine the length and timing of these windows, in part, because disclosure is voluntary and sparse. We use observed insider trading data to estimate the start and end points of quarterly trading windows, and the corresponding “blackout” periods when trading is restricted. We find that restrictions on trading reflect a heightened concern about expected information asymmetry, both with respect to how long insiders must wait after an earnings announcement before trading can begin, and how quickly the trading window closes as information builds up over the quarter. In addition, we find that trading is more restrictive when the firm has stronger external monitoring, and is more relaxed when insiders have greater liquidity needs. We also present evidence on event-specific “ad hoc blackout windows,” where insiders appear to be largely prohibited from trading during a given quarter. These ad hoc blackout periods tend to be followed by disclosure of future material corporate events, such as M&A activity or changes in the board or top management, are associated with contemporaneously higher information asymmetry, and are followed by increased trading volume and higher stock returns, suggesting that investors may not immediately incorporate the information conveyed by these unscheduled restrictions.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114964388","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Self-Dealing, Corporate Opportunities and the Duty of Loyalty - A US, UK and EU Comparative Perspective","authors":"G. Helleringer, Marco Claudio Corradi","doi":"10.2139/ssrn.3825745","DOIUrl":"https://doi.org/10.2139/ssrn.3825745","url":null,"abstract":"The paper offers a comparative perspective on the duty of loyalty – encompassing both rules that govern self-dealing and corporate opportunity transactions. It compares the evolution of these two sets of rules in several European jurisdictions and in US Delaware law. The paper begins by comparing the approach to regulating self-dealing and related party transactions under both common law (namely the US and UK) and civil law regimes (focusing on continental Europe). It then turns to the legal development of corporate opportunity rules, and contrasts the approach to corporate opportunities under US law to the less-developed jurisprudence on corporate opportunities in civil law jurisdictions. <br><br>Corradi and Helleringer note tensions between the evolution of the law governing self-dealing transactions at the European level, and the lack of harmonization on rules addressing corporate opportunities and continuing divergences in corporate opportunities doctrine across EU jurisdictions. They observe a relaxation of the duty of loyalty in US Delaware law, while there is an asymmetric evolution of its two components, self-dealing and corporate opportunities, in the European context. On the one hand, self-dealing rules have existed in European corporate laws for a long time and have been substantially relaxed in Europe in recent times as they have in the US. On the other hand, corporate opportunities rules have been introduced in most European jurisdictions only throughout the last two decades – without an express possibility of a waiver such as the one granted by DGCL s. 122(17). <br><br>The convergence of self-dealing rules may have been facilitated by the harmonization of EU financial market law, which in turn has not affected corporate opportunities rules. Economic agency theory provides a rationale for a hypothetical convergence of self-dealing and corporate opportunities rules, based on their economic function. <br>","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"175 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125802414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Organhaftung und D&O-Versicherung – Jüngere Entwicklungen und aktuelle Gestaltungsfragen (Company Director Liability and D&O-Insurance in Germany)","authors":"Walter Doralt","doi":"10.2139/SSRN.3802468","DOIUrl":"https://doi.org/10.2139/SSRN.3802468","url":null,"abstract":"German Abstract: Der Beitrag geht zunachst auf die Geschaftsleiterhaftung ein und hinterfragt dabei die verbreitete Annahme uberzogener Haftungsrisiken. Es folgt ein Uberblick zu den aktuellen Fragen der D&O-Versicherung. Zuerst wird auf die Veranderungen der Versicherungsprodukte eingegangen. Auf dieser Grundlage werden Probleme des Vergutungscharakters der D&OVersicherung, der je nach Gestaltung gegeben sein kann, sowie die Zustandigkeitsfragen zum Abschluss behandelt. chlieslich erortert der Beitrag zentrale Gestaltungsfragen der D&OVersicherung. \u0000 \u0000English Abstract: This paper first deals with the liability of directors for a breach of their duties and ensuing liability risks. Upon closer analysis and contrary to what is widely assumed in Germany, it seems uncertain whether the mere increase of liability risks can be taken as an indication of an excessive liability regime. One key component in this context is the spreading of DO on the other hand, it has created “deeper pockets” for claimants and thus fueled enforcement. Building on these aspects, the paper mainly deals with the current trends of D&O-insurance and how products offered by insurers have evolved in recent years. Company law consequences deriving from these changes are dealt with subsequently. Finally, aspects of contract design and drafting are addressed in this paper.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"221 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130507925","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"General Principles of EU Corporate and Insolvency Law","authors":"F. Mucciarelli","doi":"10.2139/SSRN.3777289","DOIUrl":"https://doi.org/10.2139/SSRN.3777289","url":null,"abstract":"Over more than forty years, the European Union (formerly the European Community) has enacted a large number of directives aimed at harmonising company law rules across Member States. Nevertheless, differences across Member States persist with regard to company law rules. Member States’ regimes share a core of fundamental features: shareholders are not liable for the company's debts; companies have a separate legal personality; and the capital investment is commodified through the vehicle of freely disposable shares. Beyond these fundamental elements, it is more uncertain whether other general principles, having legal relevance, exist throughout the EU. \u0000 \u0000By looking at national company law regimes and EU harmonising directives, this work has isolated only two principles that seem sufficiently general, common, and fundamental. The first principle is the unrestricted powers of directors to act on behalf of the company: this principle is based upon the German tradition and has been extended to public companies of all Member States by the First Company Law Directive of 1968. The second principle is equal treatment of shareholders who are in the same condition: this is a general duty that all companies’ bodies should respect when they make decisions that affect shareholders. Such a principle, however, is not a rigid equality rule, as differentiated treatment might still be justified in the interest of the company. However, its status within case-law of the European Court of Justice it is still unclear: on the one hand, the Court has denied that this duty is a general principle of EU law, with the consequence that it only applies within the scope of the specific provisions entailing this rule; on the other hand, other decisions of the Court seem to follow an opposite logic. \u0000 \u0000Concerning insolvency law, it is much more controversial whether general principles exist within the EU legal order. Insolvency proceedings are country-specific, as most of their rules have a re-distributive impact on a broad range of stakeholders of the company, such as employees, creditors, and customers. Therefore, insolvency regimes are strictly related to political balances and national social security policies. The only common denominator of Member States insolvency regimes seems to be the duty to treat creditors equally and respect pre-insolvency entitlement and creditor ranking. Nevertheless, there is also an intricate web of exceptions to this principle, which vary broadly across jurisdictions and aim at protecting specific classes of creditors.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129511162","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A Sober Look at SPACs","authors":"M. Klausner, M. Ohlrogge, Emily Ruan","doi":"10.2139/ssrn.3720919","DOIUrl":"https://doi.org/10.2139/ssrn.3720919","url":null,"abstract":"A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132674166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Corporate Board in an Age of Collaborative Intelligence & Complex Risk","authors":"H. Bird, Natania Locke","doi":"10.4337/9781800377165.00011","DOIUrl":"https://doi.org/10.4337/9781800377165.00011","url":null,"abstract":"This chapter examines the role and function of boards of directors in the approaching age of AI-dependent organisations characterised by three disruptive features: shifting organisational paradigms; flattening of management structures; and changing board functions. We discuss each of these developments before contending that technology including AI is already playing a critical function in the area of risk management and risk governance, as is evident from its use by financial institutions to monitor transactions for breaches of anti-money laundering and anti-terrorism legislation. While risk management is the traditional purview of management, risk governance is the ultimate responsibility of boards and is part of their broader oversight function, as encapsulated in Australia by the statutory duty of directors to act with care and diligence. AI and technology have made in-roads into the task of risk identification within corporations, the first step in the risk management process, but we contend there are many obstacles in the path of end-to-end AI replacement of risk management and risk governance. Proponents of AI’s expansion into corporate governance tend to avoid micro-governance issues of the kind discussed here by encouraging a broader taxonomy of ‘administrative’ and ‘subjective’ governance functions instead and then arguing AI will at least replace ‘administrative’ functions in the future. We contend that ‘keeping humans in the loop’ remains critical to effective risk governance. We illustrate these issues by way of a case study of the recent AUSTRAC v Westpac litigation in Australia, which provides a unique insight into how large banks are and are not using technology in their management and governance of a global problem, financial crime risk. We conclude by explaining the impact that these insights have for the risk oversight role of boards of directors in the age of AI and complex risk. Business risks may change but the involvement of human actors in risk management and risk oversight must remain until such time as AI ceases to be over-promised-in-its-expectations-and-under-delivered-in-its-reality.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116589826","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Standards and Practices of Corporate Governance: Relevant Current Trends","authors":"E. Apevalova, N. Polezhaeva, A. Radygin","doi":"10.2139/ssrn.3688261","DOIUrl":"https://doi.org/10.2139/ssrn.3688261","url":null,"abstract":"An analysis of corporate governance practices would be impossible without understanding the corporate governance development in the context of Russian and world practices. With a certain degree of arbitrariness, the following main phases of its development can be distinguished.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132273593","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Framework for Board Oversight of Sustainability","authors":"Alan S. Gutterman","doi":"10.2139/ssrn.3813827","DOIUrl":"https://doi.org/10.2139/ssrn.3813827","url":null,"abstract":"Corporate governance is the responsibility of the company’s board of directors, which is charged with designing, implementing and monitoring the structures and processes for the direction and control of the company. The fiduciary duties and responsibilities of directors are derived from a variety of legal and regulatory sources including statutes, case law and rules developed and imposed by securities regulators. This chapter provides an overview of the legal and regulatory standards that must be understood by directors and the steps that must be taken by the entire board to ensure that directors meet the expectations of investors and other stakeholders relating to oversight of sustainability including the establishment of an oversight framework, allocation of responsibilities to board committees, managing the composition of the board and providing directors with adequate and relevant sustainability education and training.","PeriodicalId":171289,"journal":{"name":"Corporate Law: Corporate Governance Law eJournal","volume":"164 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132024864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}