Tag Archives: corporate

SPACs’ Directors Network: Conflicts of Interest, Compensation, and Competition 

By | July 18, 2022

Special Purpose Acquisition Company (SPAC) IPO volumes have surged in recent years (Figure 1). In 2020-2021, SPAC’s IPO volume reached more than $200 billion. Merging with a SPAC has become an important mechanism for private companies to go public. Since 2010, 417 SPACs have merged or announced a merger with private firms. These mergers created… Read More »

How to Contract for ESG: Sustainability-Linked Bonds and a New Investor Paradigm 

By | July 14, 2022

Companies today are facing unprecedented pressure to make progress on environmental, social, and governance (ESG) issues. The demand for companies to address these issues is not new, but a relatively recent development is that this demand now comes from investors, rather than activists or other stakeholders. The pressure from investors has caused many companies to… Read More »

Understanding Startup Corporate Governance 

By | July 11, 2022

Many of our most innovative companies that are household names started as venture capital (VC)-backed companies: Amazon, Google, Facebook, Airbnb, just to name a few. The lucky few startups that were able to raise money from VCs have changed our lives in significant ways—in how we obtain information, communicate with each other, and form relationships.… Read More »

Diversification and Diversity: The Relationship Between Gender and Fund Performance 

By | July 8, 2022

For an industry built around “diversification,” we still have plenty of work to do to apply the concept to our investment teams. We know that if you restrict a portfolio, you can’t always maximize performance, so isn’t it reasonable to consider that the same might hold for talent diversity and team performance?  The composition of… Read More »

Accountability of the Australian Securities and Investments Commission and the Establishment of the Financial Regulator Assessment Authority – An Evaluation 

By | July 7, 2022

The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, financial services, and consumer credit regulator. A general description of ASIC is that it is responsible for corporate regulation, the regulation of financial markets and clearing and settlement facilities, the regulation of providers of financial services, and market integrity and consumer protection functions in connection… Read More »

What Is Driving Western Firms to Leave Russia? 

By | June 28, 2022

In February 2022, Russia started a full-scale invasion of Ukraine, an event that would shake the global order. The war has already resulted in severe damages to Ukraine – thousands of killed civilians, more than 14 million of people displaced, and over $100 billion in infrastructure damage alone. Yet, the consequences of the war are… Read More »

Are All ESG Funds Created Equal? Only Some Funds Are Committed 

By | June 22, 2022

“The major problem that I have is that even if they’re [ESG funds] marketed correctly, they actually have no demonstrable impact.”1  Tariq Fancy, the former head of BlackRock’s sustainable investing  Flows into ESG mutual funds have increased markedly over recent years, raising the question of whether these capital flows lead to improved ESG policies in… Read More »

Changes in Risk Factor Disclosures and the Variance Risk Premium 

By | June 14, 2022

Since 2005, the Securities and Exchange Commission (SEC) mandates that all publicly-traded firms inform investors about material risks that may impact future performance. These are referred to as risk factor disclosures, which are discussed within Item 1A of 10-K filings. These risk disclosures have been criticized as lengthy and boilerplate (IRRC 2016; SEC 2016); it… Read More »

Regulator’s Use of Corporate Monitors to Remediate Financial Misconduct 

By | June 8, 2022

Regulators such as the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) are allowed to seek any remedy that is necessary to protect investors following violations of securities law. One remedy increasingly being used is the requirement that violating firms hire a corporate monitor at their own expense, who is charged with supervising… Read More »

Does Auditor Litigation Risk Affect Corporate Investments? 

By | June 6, 2022

To what extent can the risk of litigation against auditors be beneficial or harmful to companies? Auditors play an important role in financial contracting by certifying the credibility and reliability of financial statements that third parties rely upon. Increased risk of liability claims against auditors by third parties could result in huge financial costs and… Read More »