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What does boardroom culture yield when a board commits to a broad embrace of diversity—including diversity of gender, ideas, ethnicity, race, education, age, and skills?  Do chances improve for decisions that help lead the company to maximize its potential and meet its leadership responsibilities?  And if so, how? Given all the research data about boardroom diversity, it’s tempting to turn to data for answers.  Yet data are limited in what they can tell us about…
In a recent paper, we explore EU law covering EU cross-border mergers. These are typically more difficult and costlier than purely national mergers. Additionally, political hurdles can exist. In a time of global political and institutional transformations away from open markets and towards protectionism, the opposition to takeovers and mergers based on public interest considerations, such as national security, sees a revival. This trend towards protectionism, together with a focus on industrial policy, has…
Blockchain technology continues to be a lively topic of conversation in legal, business and technology circles. This includes heated debates about whether and when the technology will deliver on its many promises and how the most common applications employing blockchain—that is, cryptocurrencies and other types of digital tokens—should be regulated in the United States and globally. Despite having experienced “crypto winter”—including a precipitous drop in cryptocurrency values, persistent skepticism about blockchain applications and a growing…
The advent of the “shareholder rights plan,” more popularly known as the “poison pill,” fundamentally altered the trajectory of American corporate governance. Intended to defend vulnerable boards from corporate raiders, the poison pill was embraced by U.S. managers in the 1980s as a lifeline in a sea of hostile takeovers. When pundits predicted an imminent wave of hostile takeovers in Japan in the mid-2000s, Japanese boards appeared to embrace the poison pill with equal enthusiasm.…
On March 27, 2019, journalists affiliated with Reuters reported that the Kunlun Group (“Kunlun”), a China-based tech firm, was preparing to sell its wholly owned subsidiary, Grindr, after the Committee on Foreign Investment in the United States (“CFIUS”) informed the group that Kunlun’s continued ownership of Grindr constituted a national security risk.  This forced divestiture of Grindr is a pointed reminder that CFIUS remains focused on protecting the sensitive personal data of U.S. citizens, has…
In spite of intensive academic research on capital expenditure efficiency, how firms make investment decisions remains largely a black box. We analyze that process by dividing it into two stages: budgeting of capital expenditures (CapEx) and execution of the budget. We find that these two stages have different effects on investment efficiency, and are in turn affected differently by accounting quality and governance. Further, while opportunistic managers massively exceed investment budgets, managers with high ability…
As we enter the peak of proxy season, we review executive compensation trends in the U.S. based executive pay disclosures so far this year. Our key findings include: Compensation disclosures so far suggest continued increases in CEO pay across all market segments and almost all industries. The proportion of stock-based compensation as a percentage of total pay continues to increase, crossing the threshold of 50 percent of total pay for large companies for the first…
Fifty years ago, banking was a relationship business. Bank managers collected information about depositors and borrowers from all sorts of sources, formal and informal. In recent decades, credit decisions have become far more data-driven, with companies like Amazon and the Alibaba-affiliate, Ant Financial, taking the lead in the U.S. and China. This paradigm shift in finance, however, is only just beginning. We are entering a period in which the leaders in finance will have to…
Depository institutions have been understandably reluctant to provide banking services to cannabis-related businesses in light of the significant (and costly) regulatory and compliance expectations that apply under the Bank Secrecy Act (BSA) and other anti-money laundering (AML) laws and regulations.[1] Legislative relief, however, may be on the way. On March 27, 2019, with approval of the Secure and Fair Enforcement Banking Act of 2019, H.R. 1595 (SAFE Banking Act), the US House Financial Services…
A stock market is a key feature found in any economy with a substantial private sector.  For example, in the United States, we see the New York Stock Exchange and Nasdaq, in the U.K, the London Stock Exchange, and in Brazil, B3.  While some commentators suggest that a stock market is primarily simply a place for useless speculation, a well-functioning stock market does in fact serve a number of important social purposes.  It facilitates firms…