Who else but Delaware Chief Justice Leo Strine would bid his farewell to the Delaware bench with nothing less ambitious than a “comprehensive proposal to reform the American corporate governance system” laid out in a paper with longest title of any in recorded history: “Toward Fair and Sustainable Capitalism: A Comprehensive Proposal to Help American Workers, Restore Fair Gainsharing Between Employees and Shareholders, and Increase American Competitiveness by Reorienting Our Corporate Governance System Toward Sustainable Long-Term Growth and Encouraging Investments in America’s Future”? Strine offers up his always interesting ideas: for example, he advocates setting up board committees focused on the welfare of the workforce, imposing a tax on most financial transactions to be dedicated to funding infrastructure and research, curbing corporate political spending in the absence of shareholder approval and enhancing the fiduciary duties of institutional investors to consider their ultimate beneficiaries’ economic and human interests. And here’s another idea: Strine believes that the number of proxy votes each year is an “impediment to thoughtful voting” and leads to outsourcing of voting decisions by institutional investors to proxy advisory firms. Say on pay every four years? He has a plan for that too.
A new bill that has been introduced in the House, H.R. 1053, would direct the SEC to issue regs to require public companies to disclose political expenditures in their annual reports and on their websites. While the bill’s chances for passage in the House are reasonably good, that is not the case in the Senate. In the absence of legislation, some proponents of political spending disclosure have turned instead to private ordering, often through shareholder proposals. So far, those proposals have rarely won the day, perhaps in large part because of the absence of support from large institutional investors. But that notable absence has recently come in for criticism from an influential jurist, Delaware Chief Justice Leo Strine. Will it make a difference?
by Cydney Posner As previously discussed on this blog, a few companies have gone public as “Certified B Corporations,” but now we apparently have the first company to file for its IPO as an actual Delaware “public benefit corporation” (PBC). Earlier this month, Laureate Education, Inc., a global network of […]