Louis D. Brandeis Takes On Section 310
Before being named to the U.S. Supreme Court, Justice Louis D. Brandeis wrote an influential series of articles for Harpers Weekly magazine. Eventually, these articles were collected and published under the title “Other People’s Money–and How the Bankers Use It”. In Chapter III, Brandeis attacked the practice of interlocking directorates with the claim that it “offends laws human and divine.” Brandeis Read more...
One-Size-Fits-All Policy Is A Misfit
Today, Forbes.com ran my Op/Ed on ISS’ recent decision to adopt a one-size-fits-all approach to recommendations on shareholder proposals with respect to political spending disclosures.
Do You Have The Correct Authorized Number Of Directors?
I frequently come across corporations with the wrong number of authorized directors. California, unlike other states, has some very precise rules and these frequently seem to be missed. The Bylaws of many California corporations establish a minimum and maximum number of directors and permit the board to fix the exact number within that range. For example, the Bylaws might provide Read more...
Bill Seeks To Mandate Corporate Political Disclosures
The fallout from the U.S. Supreme Court’s decision in Citizens United v. Federal Election Com’n, 130 S. Ct. 876 (2010) continues. Earlier this week, California State Senator Noreen Evans introduced a bill, SB 982, to require corporations to issue a report on planned political spending as well as expenditures for the previous fiscal year. The report must include the following: Read more...
There’s Something About Section 800 And ISS Adds Panelist
What’s So Different About Section 800? California Corporations Code Section 800 governs derivative lawsuits. Yesterday, I wrote about the fact that the California legislature has made Section 800 expressly applicable to foreign corporations (as defined in Section 171). Is this an academic point or can it matter? One key difference may be that Section 800(c) allows the corporation or any Read more...
Has ISS Moved From Advice To Advocacy?
Last November, I joined Professor Stephen Bainbridge (UCLA Law School) and James Copland (Director, Center for Legal Policy at the Manhattan Institute) in submitting this comment letter opposing ISS’ proposal to change its case-by-case approach to stockholder proposals with respect to disclosure of corporate political spending. Much like Captain Louis Renault, I was “shocked, shocked” when ISS ignored our advice and decided that it Read more...
California’s Two New Corporate Forms – And The Winner Is . . .
Recently, Marc Lifsher wrote this story for the Los Angeles Times regarding California’s new “Benefit Corporation Law”. He reports that “Chief executives, led by Yvon Chouinard, the founder of Patagonia, a 56-year-old seller of outdoor apparel and equipment based in Ventura County, marched into the secretary of state’s office shortly after it opened Tuesday morning.” So who won the race Read more...
Will The “Fourth Branch” Rewrite California’s Corporate Law?
Voters – The “Fourth Branch” of Government In 1911, California became the tenth state to adopt three key tools of popular sovereignty – the initiative, referendum and recall. As defined by the California Constitution, the initiative is the power of the electors to propose statutes and amendments to the Constitution and to adopt or reject them; the referendum is the power Read more...
No Voting Rights?
In this recent post, I wrote about California’s definition of “common shares” in Corporations Code § 159. These are shares that have no preference over any other shares with respect to distribution of assets on liquidation or with respect to payment of dividends. Is it possible to have common shares with no voting rights? In California, the answer is yes. California Read more...
Meeting Over? Hold On To That Voting Record!
In 1988, California enacted a statute to provide a means for beneficial owners of stock to obtain information about the voting of their shares from the persons with the power to vote those shares. Cal. Stats. 1988, ch. 1360. Unfortunately, the statute is no clearer than the waters of Loch Ness. In general, the statute requires that “every person possessing the power Read more...
