Proxy Access and Optimal Standardization in Corporate Governance: An Empirical Analysis

According to the conventional wisdom, “one size does not fit all” in corporate governance. Firms are heterogeneous with respect to their governance needs, implying that the optimal corporate governance structure must also vary from firm to firm. This one-size-does-not-fit-all axiom has featured prominently in arguments against numerous corporate law regulatory initiatives, including the SEC’s failed Rule 14a-11—an attempt to impose mandatory, uniform “proxy access” on all public companies—which the D.C. Circuit struck down for inadequate cost–benefit analysis. This Article presents an alternative theory as to the role of standardization in corporate governance—in which investors prefer standardized terms—and empirical evidence that is consistent with this theory. Under my theory, shareholders prefer standardization because they must incur considerable transaction costs to exercise control rights that contain idiosyncratic terms. Standardization reduces these transaction costs. Consistent with this theory, I find that standardization, not heterogeneity, has pervaded the post–Rule 14a-11 private ordering of proxy access. Shareholder proposals and adopted bylaws alike have converged around standardized terms, and regression analysis suggests that this standardization reflects shareholder preferences. Moreover, employing a regression-discontinuity design, I find evidence indicating that markets have generally reacted favorably to the passage of these standardized proposals. However, robustness checks cast some doubt on the internal validity of this regression-discontinuity design, and thus these results should be taken with a grain of salt. My theory and empirical findings have important implications for longstanding normative debates in corporate law. With a proper understanding of the role of standardization in corporate governance, the one-size-fits-all critique—though not baseless—takes on a different meaning. Although lawmakers would still do well to retain a presumption in favor of default rules instead of mandatory rules, the need for heterogeneity does not appear to be as great as some have supposed, and lawmakers may benefit from a greater focus on encouraging optimal standardization instead of optimal heterogeneity. These insights bear both on optimal regulatory design in the abstract and on the wisdom of currently pending federal legislation in a more concrete way

Barbarians Inside the Gates: Raiders, Activists, and the Risk of Mistargeting

This Article argues that the conventional wisdom about corporate raiders and activist hedge funds — raiders break things and activists fix them — is wrong. Because activists have a higher risk of mistargeting — mistakenly shaking things up at firms that only appear to be underperforming — they are much more likely than raiders to destroy value and, ultimately, social wealth. As corporate outsiders who challenge the incompetence or disloyalty of incumbent management, raiders and activists play similar roles in reducing “agency costs” at target firms. The difference between them comes down to a simple observation about their business models: raiders buy entire companies, while activists take minority stakes. This means that raiders are less likely to mistarget firms underperforming by only a slight margin, and they are less able to shift the costs of their mistakes onto other shareholders. The differences in incentives between raiders and activists only increase after acquiring their stake. Raiders have unrestricted access to nonpublic information after acquiring ownership of a target company, which allows them to look under the hood to determine whether changing the target’s business strategy is truly warranted. Activists, by contrast, have limited information and face structural conflicts of interest that impair their ability to evaluate objectively what’s best for the target company. This insight has profound implications for corporate law and policy. Delaware and federal law alike have focused on keeping raiders outside the gates, but they ignore the real threat: activists that are already inside. This Article proposes reforms to both state and federal law that would equalize the regulation of raiders and activists

\u3ci\u3eCaremark\u3c/i\u3e and ESG, Perfect Together: A Practical Approach to Implementing an Integrated, Efficient, and Effective \u3ci\u3eCaremark\u3c/i\u3e and EESG Strategy

With increased calls from investors, legislators, and academics for corporations to consider employee, environmental, social, and governance factors (“EESG”) when making decisions, boards and managers are struggling to situate EESG within their existing reporting and organizational structures. Building on an emerging literature connecting EESG with corporate compliance, this Essay argues that EESG is best understood as an extension of the board’s duty to implement and monitor a compliance program under Caremark. If a company decides to do more than the legal minimum, it will simultaneously satisfy legitimate demands for strong EESG programs and promote compliance with the law. Building on that insight, we explain how boards can marry existing corporate compliance programs with budding EESG programs. By integrating compliance and EESG, corporations can meet growing societal demands in an effective and efficient manner that capitalizes on existing structures. Lastly, we address how EESG and corporate compliance responsibilities should be allocated at the board and senior management level. Instead of separating compliance and EESG oversight, this Essay suggests that boards embrace a functional approach, delegating similar compliance and EESG oversight to the same committee and managers. By situating EESG within the board’s existing fiduciary duties, this Essay provides academics, legislators, investors, and managers with a novel framework to conceptualize EESG while also offering a path forward for boards struggling to place the current EESG movement within their existing corporate structure

\u3cem\u3eCaremark\u3c/em\u3e and ESG, Perfect Together: A Practical Approach to Implementing an Integrated, Efficient, and Effective \u3cem\u3eCaremark\u3c/em\u3e and EESG Strategy

With increased calls from investors, legislators, and academics for corporations to consider employee, environmental, social, and governance factors (“EESG”) when making decisions, boards and managers are struggling to situate EESG within their existing reporting and organizational structures. Building on an emerging literature connecting EESG with corporate compliance, this Essay argues that EESG is best understood as an extension of the board’s duty to implement and monitor a compliance program under Caremark. If a company decides to do more than the legal minimum, it will simultaneously satisfy legitimate demands for strong EESG programs and promote compliance with the law. Building on that insight, we explain how boards can marry existing corporate compliance programs with budding EESG programs. By integrating compliance and EESG, corporations can meet growing societal demands in an effective and efficient manner that capitalizes on existing structures. Lastly, we address how EESG and corporate compliance responsibilities should be allocated at the board and senior management level. Instead of separating compliance and EESG oversight, this Essay suggests that boards embrace a functional approach, delegating similar compliance and EESG oversight to the same committee and managers. By situating EESG within the board’s existing fiduciary duties, this Essay provides academics, legislators, investors, and managers with a novel framework to conceptualize EESG while also offering a path forward for boards struggling to place the current EESG movement within their existing corporate structure

Macrophage-derived human resistin is induced in multiple helminth infections and promotes inflammatory monocytes and increased parasite burden.

Parasitic helminth infections can be associated with lifelong morbidity such as immune-mediated organ failure. A better understanding of the host immune response to helminths could provide new avenues to promote parasite clearance and/or alleviate infection-associated morbidity. Murine resistin-like molecules (RELM) exhibit pleiotropic functions following helminth infection including modulating the host immune response; however, the relevance of human RELM proteins in helminth infection is unknown. To examine the function of human resistin (hResistin), we utilized transgenic mice expressing the human resistin gene (hRetnTg+). Following infection with the helminth Nippostrongylus brasiliensis (Nb), hResistin expression was significantly upregulated in infected tissue. Compared to control hRetnTg- mice, hRetnTg+ mice suffered from exacerbated Nb-induced inflammation characterized by weight loss and increased infiltration of inflammatory monocytes in the lung, along with elevated Nb egg burdens and delayed parasite expulsion. Genome-wide transcriptional profiling of the infected tissue revealed that hResistin promoted expression of proinflammatory cytokines and genes downstream of toll-like receptor signaling. Moreover, hResistin preferentially bound lung monocytes, and exogenous treatment of mice with recombinant hResistin promoted monocyte recruitment and proinflammatory cytokine expression. In human studies, increased serum resistin was associated with higher parasite load in individuals infected with soil-transmitted helminths or filarial nematode Wuchereria bancrofti, and was positively correlated with proinflammatory cytokines. Together, these studies identify human resistin as a detrimental factor induced by multiple helminth infections, where it promotes proinflammatory cytokines and impedes parasite clearance. Targeting the resistin/proinflammatory cytokine immune axis may provide new diagnostic or treatment strategies for helminth infection and associated immune-mediated pathology

Species difference in ANP32A underlies influenza A virus polymerase host restriction.

Influenza pandemics occur unpredictably when zoonotic influenza viruses with novel antigenicity acquire the ability to transmit amongst humans. Host range breaches are limited by incompatibilities between avian virus components and the human host. Barriers include receptor preference, virion stability and poor activity of the avian virus RNA-dependent RNA polymerase in human cells. Mutants of the heterotrimeric viral polymerase components, particularly PB2 protein, are selected during mammalian adaptation, but their mode of action is unknown. We show that a species-specific difference in host protein ANP32A accounts for the suboptimal function of avian virus polymerase in mammalian cells. Avian ANP32A possesses an additional 33 amino acids between the leucine-rich repeats and carboxy-terminal low-complexity acidic region domains. In mammalian cells, avian ANP32A rescued the suboptimal function of avian virus polymerase to levels similar to mammalian-adapted polymerase. Deletion of the avian-specific sequence from chicken ANP32A abrogated this activity, whereas its insertion into human ANP32A, or closely related ANP32B, supported avian virus polymerase function. Substitutions, such as PB2(E627K), were rapidly selected upon infection of humans with avian H5N1 or H7N9 influenza viruses, adapting the viral polymerase for the shorter mammalian ANP32A. Thus ANP32A represents an essential host partner co-opted to support influenza virus replication and is a candidate host target for novel antivirals

Proportions of CD4+ memory T cells are altered in individuals chronically infected with Schistosoma haematobium

Characterisation of protective helminth acquired immunity in humans or experimental models has focused on effector responses with little work conducted on memory responses. Here we show for the first time, that human helminth infection is associated with altered proportions of the CD4+ memory T cells, with an associated alteration of TH1 responses. The reduced CD4+ memory T cell proportions are associated with a significantly lower ratio of schistosome-specific IgE/IgG4 (marker for resistance to infection/re-infection) in uninfected older people. Helminth infection does not affect the CD8+ memory T cell pool. Furthermore, we show for the first time in a helminth infection that the CD4+ memory T cell proportions decline following curative anti-helminthic treatment despite increased CD4+ memory cell replication. Reduced accumulation of the CD4+ memory T cells in schistosome-infected people has implications for the development of natural or vaccine induced schistosome-specific protective immunity as well as for unrelated pathogens

Elective Cancer Surgery in COVID-19-Free Surgical Pathways During the SARS-CoV-2 Pandemic: An International, Multicenter, Comparative Cohort Study.

PURPOSE: As cancer surgery restarts after the first COVID-19 wave, health care providers urgently require data to determine where elective surgery is best performed. This study aimed to determine whether COVID-19-free surgical pathways were associated with lower postoperative pulmonary complication rates compared with hospitals with no defined pathway. PATIENTS AND METHODS: This international, multicenter cohort study included patients who underwent elective surgery for 10 solid cancer types without preoperative suspicion of SARS-CoV-2. Participating hospitals included patients from local emergence of SARS-CoV-2 until April 19, 2020. At the time of surgery, hospitals were defined as having a COVID-19-free surgical pathway (complete segregation of the operating theater, critical care, and inpatient ward areas) or no defined pathway (incomplete or no segregation, areas shared with patients with COVID-19). The primary outcome was 30-day postoperative pulmonary complications (pneumonia, acute respiratory distress syndrome, unexpected ventilation). RESULTS: Of 9,171 patients from 447 hospitals in 55 countries, 2,481 were operated on in COVID-19-free surgical pathways. Patients who underwent surgery within COVID-19-free surgical pathways were younger with fewer comorbidities than those in hospitals with no defined pathway but with similar proportions of major surgery. After adjustment, pulmonary complication rates were lower with COVID-19-free surgical pathways (2.2% v 4.9%; adjusted odds ratio [aOR], 0.62; 95% CI, 0.44 to 0.86). This was consistent in sensitivity analyses for low-risk patients (American Society of Anesthesiologists grade 1/2), propensity score-matched models, and patients with negative SARS-CoV-2 preoperative tests. The postoperative SARS-CoV-2 infection rate was also lower in COVID-19-free surgical pathways (2.1% v 3.6%; aOR, 0.53; 95% CI, 0.36 to 0.76). CONCLUSION: Within available resources, dedicated COVID-19-free surgical pathways should be established to provide safe elective cancer surgery during current and before future SARS-CoV-2 outbreaks

Elective cancer surgery in COVID-19-free surgical pathways during the SARS-CoV-2 pandemic: An international, multicenter, comparative cohort study

PURPOSE As cancer surgery restarts after the first COVID-19 wave, health care providers urgently require data to determine where elective surgery is best performed. This study aimed to determine whether COVID-19–free surgical pathways were associated with lower postoperative pulmonary complication rates compared with hospitals with no defined pathway. PATIENTS AND METHODS This international, multicenter cohort study included patients who underwent elective surgery for 10 solid cancer types without preoperative suspicion of SARS-CoV-2. Participating hospitals included patients from local emergence of SARS-CoV-2 until April 19, 2020. At the time of surgery, hospitals were defined as having a COVID-19–free surgical pathway (complete segregation of the operating theater, critical care, and inpatient ward areas) or no defined pathway (incomplete or no segregation, areas shared with patients with COVID-19). The primary outcome was 30-day postoperative pulmonary complications (pneumonia, acute respiratory distress syndrome, unexpected ventilation). RESULTS Of 9,171 patients from 447 hospitals in 55 countries, 2,481 were operated on in COVID-19–free surgical pathways. Patients who underwent surgery within COVID-19–free surgical pathways were younger with fewer comorbidities than those in hospitals with no defined pathway but with similar proportions of major surgery. After adjustment, pulmonary complication rates were lower with COVID-19–free surgical pathways (2.2% v 4.9%; adjusted odds ratio [aOR], 0.62; 95% CI, 0.44 to 0.86). This was consistent in sensitivity analyses for low-risk patients (American Society of Anesthesiologists grade 1/2), propensity score–matched models, and patients with negative SARS-CoV-2 preoperative tests. The postoperative SARS-CoV-2 infection rate was also lower in COVID-19–free surgical pathways (2.1% v 3.6%; aOR, 0.53; 95% CI, 0.36 to 0.76). CONCLUSION Within available resources, dedicated COVID-19–free surgical pathways should be established to provide safe elective cancer surgery during current and before future SARS-CoV-2 outbreaks

A large scale hearing loss screen reveals an extensive unexplored genetic landscape for auditory dysfunction

The developmental and physiological complexity of the auditory system is likely reflected in the underlying set of genes involved in auditory function. In humans, over 150 non-syndromic loci have been identified, and there are more than 400 human genetic syndromes with a hearing loss component. Over 100 non-syndromic hearing loss genes have been identified in mouse and human, but we remain ignorant of the full extent of the genetic landscape involved in auditory dysfunction. As part of the International Mouse Phenotyping Consortium, we undertook a hearing loss screen in a cohort of 3006 mouse knockout strains. In total, we identify 67 candidate hearing loss genes. We detect known hearing loss genes, but the vast majority, 52, of the candidate genes were novel. Our analysis reveals a large and unexplored genetic landscape involved with auditory function.The full extent of the genetic basis for hearing impairment is unknown. Here, as part of the International Mouse Phenotyping Consortium, the authors perform a hearing loss screen in 3006 mouse knockout strains and identify 52 new candidate genes for genetic hearing loss.PMC563879