Center News, Homepage News
Bridging Board Gaps—Then and Now
In 2011, Bridging Board Gaps, a landmark study from Columbia Business School and the University of Delaware’s Weinberg Center for Corporate Governance, examined the difference between ideal and actual corporate board practices. Nearly 15 years later, where do things stand?
Some gaps have closed—boards today benefit from improved information flow, increased engagement with outside advisors, and more robust self-renewal practices. But critical challenges remain, including aligning boards with long-term shareholder value, fostering a culture of ethical engagement, and ensuring constructive debate.
Weinberg Center Director Lawrence Cunningham explores these shifts in the latest edition of NACD Directorship, revisiting the original study and outlining what today’s directors—both seated and aspiring—can do to drive more effective corporate governance.
📖 Read more here [DM us for a pdf version.]
Center News
Delaware lawmakers approve bill to slow lawsuits; Weinberg Center panel featured in news coverage
…Among U.S. start-ups last year, 89% were incorporated under Delaware law, Columbia law professor Dorothy Lund said Feb. 24, at a conference in New York sponsored by the University of Delaware’s corporate governance program. Lund said the lawsuit restrictions in Senate Bill 21 are mostly of interest to a small group of companies whose bosses are also controlling shareholders, like Musk and Zuckerberg are. “I don’t think this is the story of a huge threat,” Lund said. “Yet we have a big reaction.”
At its roots, “corporate law is simple: ‘Though shalt not steal,’” said Sean Griffith, a law professor at Fordham University. He compared past Delaware cases to “morality plays” in which judges reviewed whether boards had done enough to ensure shareholders’ interests were protected. But ruling against Musk’s billions even after shareholders endorsed the payout may be “logically compelling but politically untenable,” Griffith added.
New York University law professor Edward Rock, a longtime scholar of the Delaware court, suggested the Senate bill was a reaction to a recent “vibe” that Delaware’s reputation for “sophisticated courts with business acumen” has suffered. Rich company founders find it “outrageous to be told they can’t take big money” without meeting extra court-ordered conditions. Rock worried about the “rushed” attempt to fix these perceptions by restricting judges’ powers through legal limits. The more law is spelled out on the books, not left to veteran Chancery judges’ discretion, the easier for competing states to copy, he added, removing Delaware’s competitive advantage.
Gov. Meyer, after consulting corporate lawyers, told residents the law must be passed to preserve the state’s ability to continue without a retail sales tax. He warned against opponents’ “misinformation.” Meyer’s stance marked a departure from state officials’ usual reticence about corporate law. “The governor faced very intense pressure,” said Lawrence Cunningham, head of the University of Delaware’s corporate governance center, at the New York event. “He did something most governors haven’t: He exercised leadership.”
[Read Full Article – View PDF] | Philadelphia Inquirer, The (PA) | Joseph N. DiStefano (Staff Writer)
Center News, Homepage News
The winners of the Weinberg Center student writing competition were recognized by the University in ‘For the Record’.
The John L. Weinberg Center for Corporate Governance at UD hosted its fourth annual event, “From Boom to Backlash: Guiding Directors in a Shifting ESG Landscape,” on Feb. 13, 2025.
Nearly 100 corporate leaders, legal experts and students gathered to discuss the evolving challenges and responsibilities of directors in the ever-changing environmental, social and governance (ESG) landscape. As part of the event, the center hosted a student writing competition, inviting participants to submit papers summarizing key discussions, highlighting major themes and proposing open questions for future debate.
The competition winners were UD Lerner undergraduate students Lucas Troutner, Class of 2027, a finance major; Brooke Burkhardt, Class of 2026, a finance major; and Anna Goldkamp, Class of 2027, a finance and financial planning double major. Each student received a $500 cash prize.
Read the full story here.
Center News, Homepage News
By Lerner College | Editor’s note: This article was written by Lawrence Cuningham, WCCG Director and Alex White, WCCG Myron T. Steele Fellow
On Feb. 13, the John L. Weinberg Center for Corporate Governance hosted its fourth annual event, “From Boom to Backlash: Guiding Directors in a Shifting ESG Landscape,” at Clayton Hall on the University of Delaware campus. The event brought together nearly 100 corporate leaders, legal experts and students to discuss the evolving challenges and responsibilities of directors in the ever-changing environmental, social and governance (ESG) landscape.
The panel, organized and moderated by Lawrence Cunningham, director of the Weinberg Center, and John W. White, a member of the center’s advisory board, featured diverse perspectives on the intersection of ESG with corporate governance, investor expectations and political dynamics. Panelists offered practical advice for boards, including strategies for managing the pressures and risks associated with ESG considerations in today’s contentious and polarized climate.
Key Takeaways from the Panel Discussion
The key themes raised by panelists during the discussion underscored that boards must remain grounded in their fiduciary responsibilities while balancing the increasing demands of stakeholders, investors and regulators. Key takeaways included:
- Strategic Focus: Directors should prioritize long-term business goals and risk management over short-term political or social pressures.
- Regulatory Vigilance: The ESG landscape is being shaped by shifting political and regulatory winds, and boards must stay informed and proactive.
- Expert Guidance: Directors should tap into expert resources to help guide decisions on complex ESG matters.
- Transparency: Companies must treat ESG disclosures with the same rigor as financial reports to ensure accountability and mitigate legal risks.
Lawrence “Larry” Cunningham, new director of the John L. Weinberg Center congratulates students Anna Goldkamp Lerner ’27, Brook Burkhardt Lerner ’26, and Luke Troutner Lerner ’27 for being the Weinberg Corporate Governance Center Boom Backlash essay winners, March 4th, 2025.
UD Students Offer Insights on the Future of ESG
As part of the event, the center hosted a writing competition for students, inviting them to submit papers summarizing the discussion, highlighting major themes and proposing open questions for future debate. The winners of the competition were UD Lerner undergraduate students Lucas Troutner, Class of 2027, finance major; Brooke Burkhardt, Class of 2026, finance major; and Anna Goldkamp,Class of 2027, finance and financial planning double major each receiving a $500 cash prize.
Troutner’s Reflection on ESG’s Evolution and the Backlash
Among the competition winners, Troutner’s paper stood out for its examination of ESG’s evolution, particularly the factors contributing to its backlash. His winning paper, “The Pendulum of ESG: From Boom to Backlash,” explored how the movement, once hailed as a framework for aligning business with long-term value creation, has become increasingly polarized.
Troutner highlighted that, initially, ESG was grounded in traditional corporate values like sustainability and governance, which were broadly embraced. However, he noted that the movement gained significant momentum during the COVID-19 pandemic as social and political movements rose to prominence. This led to a dramatic increase in ESG investments and corporate discussions about ESG. But enthusiasm for the movement began to stall as critics argued that some corporations prioritized personal political agendas over shareholder value.
Troutner pointed to the 2023 Disney shareholder lawsuit, in which the company’s public stance against Florida’s Parental Rights in Education law, commonly referred to as the “Don’t Say Gay” bill, became a flashpoint in the broader debate over corporate involvement in social issues. While Disney ultimately won the case, Troutner emphasized how the episode demonstrated the tensions between corporate values, shareholder interests and external political pressures.
As the ESG landscape evolves, Troutner stressed the need for companies to align ESG initiatives with long-term business strategy rather than ideological commitments. “The pendulum may have swung back,” he wrote, but the future of ESG lies in its practical integration into sound business practices that enhance shareholder value and long-term sustainability.
Burkhardt’s Analysis of ESG and Regulatory Shifts
Burkhardt’s essay, “From Boom to Backlash: Navigating ESG in a Shifting Landscape,” examined the growing intersection of political shifts, regulatory changes and corporate governance concerns reshaping ESG policies. She noted that while the U.S. political climate has influenced ESG strategies, it is not just politics at play. Burkhardt highlighted how key legal decisions, such as the Supreme Court’s ruling on affirmative action, have forced companies to reevaluate their diversity, equity and inclusion (DEI) efforts.
Burkhardt also examined how companies are now navigating new regulatory challenges. With the anticipated influence of a Republican-majority Securities and Exchange Commission and the potential for significant changes to climate-related disclosure rules, companies face increasing pressure to manage ESG commitments while maintaining long-term strategic goals. “Companies must navigate these complexities to ensure compliance without compromising their business objectives,” she wrote, pointing to the evolving ESG reporting requirements such as the Corporate Sustainability Reporting Directive that could impact U.S. companies.
The role of corporate boards in managing ESG concerns was another focal point of Burkhardt’s essay. She discussed the delicate balance that boards must strike when considering ESG initiatives, using the Disney case as an example of how public stances on social issues can lead to significant conflict. Burkhardt raised key questions about whether companies should take public positions on social issues or remain neutral, urging directors to carefully assess whether ESG initiatives align with business strategy and shareholder expectations.
A key takeaway from Burkhardt’s analysis was the need for boards to prioritize long-term value creation, risk management and strategic stability. She noted that boards should focus on business fundamentals and avoid reacting to external pressures in a way that could jeopardize shareholder value. “Boards must remain focused on their fundamental responsibilities,” she wrote, advising directors to leverage internal audit teams and external advisors to ensure their ESG strategies are robust and aligned with company goals.
Goldkamp’s Insights on ESG and Corporate Governance
In her winning essay, “Navigating the ESG Landscape: A Student’s Reflection on the Weinberg Center Conference,” Goldkamp expressed gratitude for the opportunity to attend the event and learn from experts in the field. As a student new to corporate governance, Goldkamp noted how valuable it was to hear different perspectives from the speakers, particularly about whether companies should take a stand on sensitive ESG issues.
Goldkamp appreciated the overview of ESG, particularly how it originated in the United Nations and was growing in the U.S. until 2022 when interest in the movement declined. The event was particularly timely given the political climate and the changes in DEI regulations under the Trump administration.
Goldkamp found it eye-opening that certain companies have been accused of greenwashing—falsely presenting themselves as proponents of ESG principles while failing to meet their promises. She was also intrigued by the discussion on how companies, even if no longer legally required to report DEI data, must still consider the implications of ceasing such disclosures. Abruptly stopping DEI reporting, she noted, can result in a loss of shareholder trust and a drop in stock prices, as investors may perceive this as the company hiding something.
The Future of ESG: A Balance of Business and Values
As corporate boards continue to navigate the challenges of ESG in an increasingly polarized environment, all three student authors emphasized the importance of careful consideration, strategic alignment and transparency. While ESG is unlikely to disappear, its future depends on how effectively companies can integrate it into their business strategies without allowing it to become a political battleground. For now, companies must continue to balance shareholder interests with societal expectations while adapting to an ever-changing landscape.
Center News, Scholarship
More Exciting Scholarship from Professor Mahmud
The Weinberg Center is pleased to congratulate our distinguished Lerner College colleague, Hamed Mahmudi, on his latest paper, soon to be published in the Journal of Law and Economics, a leading publication from the University of Chicago. Hamed, a prolific and influential scholar, has made significant contributions to the study of corporate governance practices and debates.
In his latest, Hamed, along with co-authors Tor-Erik Bakke (University of Illinois) and Aazam Virani (University of Arizona), delves into the far-reaching implications of the SEC’s 2022 mandate requiring companies to adopt clawback provisions for executive compensation. This research rigorously examines how such provisions—designed to enable firms to recover performance-based compensation when financial misstatements occur—impact firm value and whether regulatory mandates of this nature benefit shareholders.
The study contributes to the ongoing debate over whether governance measures should be left to firms to decide (the “private ordering” view) or enforced through regulation (the “agency problem” view). This discussion is central to some of the most prominent voices in the field, including scholars such as Lucian Bebchuk and Jesse Fried (Harvard), Sanjai Baghat (Colorado), Paul Gompers (Harvard), and David Larcker (Stanford).
Focusing on the SEC’s 2015 announcement of proposed rules under the Dodd-Frank Act—just prior to the 2022 mandate—this paper investigates how market participants responded to the uncertainty surrounding these provisions.
Key findings include:
- Firms without a clawback provision in place before the SEC’s announcement saw a positive boost in firm value, with an average increase of $38.6 million, suggesting that mandatory clawbacks can enhance shareholder value.
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The evidence indicates that firms most likely to benefit from mandatory clawbacks include those with powerful management and weak boards, higher CEO compensation tied to bonuses, and lower audit quality. On the other hand, high-growth firms with volatile cash flows or substantial R&D investments may be less likely to benefit, as such measures could reduce risk-taking or innovation.
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Overall, these findings support the notion that governance regulations can increase firm value in certain cases. The study suggests that mandatory clawbacks could lead to better financial reporting and improve corporate governance.
For those interested in the broader debate around corporate governance and regulation, Professor Mahmudi’s study emphasizes the importance of not only considering voluntary governance reforms but also the role that regulatory measures can play in improving corporate practices for the benefit of investors and the broader economy.
Congratulations Hamed!
Read his other scholarly papers here.
