Tag Archives: Steven A. Rosenblum

The Future of ESG: Thoughts for Boards and Management in 2024

by Martin Lipton, Steven A. Rosenblum, Adam. O. Emmerich, Karessa L. Cain, Kevin S. Schwartz, and Carmen X. W. Lu

Top left to right: Martin Lipton, Steven A. Rosenblum, and Adam. O. Emmerich.
Bottom left to right: Karessa L. Cain, Kevin S. Schwartz, and Carmen X. W. Lu. (Photos courtesy of Wachtell, Lipton, Rosen & Katz).

The term “ESG” has steadily faded from the investor and corporate lexicon over the past year in the wake of cultural and political clashes over its meaning and purpose. “Anti-ESG” legislation adopted by several states has created legal and financial hurdles around the term. Institutional investors have gone quiet on ESG amid public criticism and congressional subpoenas. BlackRock has publicly disavowed the term for having become too politicized. The use of “ESG” in earnings calls has dropped precipitously. 

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Thoughts for Boards: Key Issues in Corporate Governance for 2024

by Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, and Carmen X. W. Lu

From left to right: Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, and Carmen X. W. Lu (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

Over the past year, expectations for directors have continued to evolve, bringing new challenges and responsibilities to the boardroom.  The remarkable speed, volume and proliferation of channels through which information travels today continue to place more scrutiny on boards and heighten expectations regarding transparency and accountability.  Director reputations that have been carefully built over decades are not immune from such pressures, particularly as activist investors hunt for underperformers and revisit former targets.  The business environment has also become more complex:  macroeconomic uncertainty, geopolitical tensions, regulatory unpredictability, political polarization, culture wars, cybersecurity threats, the growth of generative AI, and energy transition are among the issues that boards are now expected to navigate.  

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Revisiting The New Paradigm

by Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum, and Carmen X. W. Lu

Photos of the authors

Left to right: Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum, and Carmen X. W. Lu (photos courtesy of Wachtell, Lipton, Rosen & Katz)

In view of the attacks on “woke” corporations, ongoing legislative opposition to the consideration by investors and corporations of environmental, social and governance (ESG) issues, legal challenges to elements of ESG itself (notably, initiatives designed to further diversity, equity and inclusion), and the attendant political polarization, we undertook to revisit The New Paradigm: A Roadmap for an Implicit Corporate Governance Partnership Between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth that we prepared for the International Business Council of the World Economic Forum in September 2016.  

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Thoughts for Boards: Key Issues in Corporate Governance for 2023

by Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, and Hannah Clark

Photos of the authors

From left to right, Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, and Hannah Clark

While the world recovers from the worst of the pandemic, the economic, political and social repercussions will continue to play out in ways that, while unpredictable, are in some respects characterized by observable patterns of cause-and-effect and cyclicality. The pendulum has been swinging back as, for example, the Federal Reserve has been ratcheting up interest rates and tightening liquidity, activist activity is once again on the rise, Republicans have taken control of the House, and back-to-office policies have been eased into effect. In this environment, stasis is the exception rather than the norm, and boards must continue to be nimble and open-minded in navigating the pitfalls and opportunities of this systemic recalibration.

Importantly, the infrastructure of corporate governance – namely, the structure and allocation of responsibilities and decision-making authority, and related principles, policies and information flows to facilitate such functioning – continues to serve as the anchoring framework for the board’s oversight of dynamic business conditions. Despite the complexity and range of issues that boards today must grapple with, the basic principles of governance continue to provide the best guideposts: engaged oversight, informed decision-making, conflict-free business judgments, and balancing of competing interests to promote the overall best interests of the business and sustainable long-term growth in value.

Below are the key trends and developments that boards should bear in mind in the coming year:
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Spotlight on Boards

by Martin Lipton, Steven Rosenblum, Karessa Cain, and Hannah Clark 

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and investor associations, but also the aspirational “best practices” that have come to have equivalent influence on board and company behavior. The ongoing coronavirus pandemic and resulting economic and social turbulence, combined with the wide embrace of ESG, stakeholder governance and sustainable long-term investment strategies, are propelling a decisive inflection point in the responsibilities of boards of directors. The 2016 and 2020 statements of corporate purpose by the World Economic Forum and the 2019 embrace of stakeholder capitalism by the Business Roundtable, together with current statements of policy by most of the leading corporations, institutional investors, asset managers and their organizations, as well as governments and regulators in and outside the United States, lead us to summarize the purpose of the corporation:

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FTC Discusses Management and Board Roles as Core Elements of Revised Data Breach Enforcement Model

by Andrew R. Brownstein, Steven A. Rosenblum, John F. Savarese, Marshall L. Miller, and Jeohn Salone Favors

In a blog post published this week, the Director of the FTC’s Consumer Protection Bureau detailed recent changes to the FTC’s baseline approach to remedial orders in data breach enforcement actions.  The changes were spurred in part by a 2018 Court of Appeals decision (PDF: 125 KB) that found an FTC order’s requirement that a company implement “reasonable” data security measures to have been too vague to be enforceable.  The FTC has reworked its routine enforcement practice to ensure that remedial data security orders include significantly greater specificity about compliance expectations for companies subject to enforcement action and for third-party assessors engaged to conduct FTC-mandated monitoring and audits of targeted companies’ data security practices.

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