Rethinking the Board of Directors: Getting Outside the Box
We find ourselves at the threshold of “third wave” governance, in which boards are asked to grapple immediately and candidly with both the financial aspects of business and new environmental, social, and governance (“ESG”) challenges that present themselves in governing globalized firms.
For purposes of this essay, I have analyzed two recently promulgated paradigms for reformation of current frameworks of corporate governance. In The New Paradigm, Martin Lipton and his co-authors essentially recalibrate the relationship between public corporations and their major institutional investors.
The author maintains that “short-termism” is a serious malady for which the only effective remedy is (1) elimination of quarterly periodic reporting on Form 10-Q, and the companion disclosure regime of quarterly earnings releases and conference calls, ...
The concept of market efficiency has been adopted by courts in a variety of contexts. In reality, markets can never be perfectly efficient or inefficient, but exist somewhere in between depending on the facts and circumstances.