On August 21, the Securities and Exchange Commission (“SEC”) adopted (1) guidance on the proxy voting responsibilities of investment advisers under the Investment Advisers Act and related rules (the “Advisers Guidance”) and (2) interpretation and guidance on the applicability to proxy voting advice of the rules on proxy solicitation under the Securities Exchange Act (the “Solicitation Guidance”).
Continue Reading In its Highly Anticipated Guidance on Proxy Advisory Firms, the SEC Proceeds With Caution
July 2019 Privacy and Cybersecurity Enforcement: Lessons for Management and Directors
In late July 2019, U.S. federal and state regulators announced three headline‑grabbing data privacy and cybersecurity enforcement actions against Equifax and Facebook. Although coverage of these cases has focused largely on their striking financial penalties, as important are the terms the settlements imposed on the companies’ operations as well as their officers, directors, and compliance professionals—and what they signal about potential future enforcement activity to come.
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How Many Directorships is Too Many? Vanguard’s Evolving View
Recently, Vanguard updated its Vanguard Fund proxy voting guidelines, disclosing a proxy voting policy relating to what Vanguard considers to be overboarded directors, based on the evolving role of directors and its assessment of the time and energy required to effectively fulfill director responsibilities.
Continue Reading How Many Directorships is Too Many? Vanguard’s Evolving View
How to Practically Synthesize Investor Messages From BlackRock, State Street, and T. Rowe Price
It has become customary, over the last few years, for companies and other stakeholders to await annual letters from large institutional investors that provide insight into investor views about companies’ long-term strategy, messaging, goals and shareholder engagement, among other topics.
BlackRock and State Street recently released their letters, and shared similar views: BlackRock reiterated its focus on the need for corporate purpose and the link to successful pursuit of profit and State Street focused on the need for a meaningful corporate culture as a significant driver of intangible value. In addition, in a recent interview with Gladstone Partners, Donna Anderson, the head of T. Rowe Price’s governance policy and engagement, focused on the need to deliver financial results instead of worrying about fending off the next activist investor.
Continue Reading How to Practically Synthesize Investor Messages From BlackRock, State Street, and T. Rowe Price
Reading Diversity Into Regulation S-K
On February 6, 2019, as companies around the United States busy themselves for the annual ritual of parsing their D&O questionnaires, finalizing their proxy statements and submitting them to the board for approval, the Securities and Exchange Commission (“SEC”) released two identical new Compliance and Disclosure Interpretations (“C&DIs”) regarding disclosure, principally in proxy statements, relating to director backgrounds and diversity policies used by nominating committees in evaluating director candidates.
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SEC Staff Releases Two New C&DIs on the Use of Notices of Exempt Solicitation
One of the surprises of the 2018 proxy season was the use of Notices of Exempt Solicitation by shareholders that almost certainly did not meet the $5 million holding threshold that would require filing under Exchange Act Rule 14a-6(g). Rule 14a-6(g) requires a person who owns more than $5 million of the company’s securities and engages in a solicitation without seeking to collect, or act as, a proxy to file solicitation materials with the SEC.
Continue Reading SEC Staff Releases Two New C&DIs on the Use of Notices of Exempt Solicitation
Cleary Partner Moderates Panel on Disclosure Committees
At the 2018 National Conference of the Society for Corporate Governance, partner Pamela L. Marcogliese moderated a panel on Disclosure Committees and the current market practice at public companies.
The panelists engaged in a discussion about the reasons for establishing a Disclosure Committee including centralizing and organizing disclosure responsibilities, helping to comply with disclosure obligations under the federal securities laws and supporting the Chief Executive Officer and Chief Financial Officer certifications under Sarbanes-Oxley in providing oversight of the company’s disclosure controls and procedures.
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Potential SEC Inquiry: Improper Rounding Up of EPS
A recent report in the Wall Street Journal, drawing on a source “familiar with the matter”, indicates that the Securities and Exchange Commission’s Division of Enforcement has launched a probe into whether certain issuers may have improperly rounded up their earnings per share to the next higher cent in quarterly reports. While the SEC has
SEC Releases New C&DIs on Proxy Rules and Schedules 14A and 14C
On May 11, 2018, the SEC’s Division of Corporation Finance released new Compliance and Disclosure Interpretations (“C&DIs”) regarding the interpretations of the proxy rules and Schedules 14A and 14C. These replace the telephone interpretations contained in the Proxy Rules and Schedule 14A Manual of Publicly Available Telephone Interpretations and the March 1999 Supplement to the
Yahoo’s Successor Settles First-Ever Case Involving SEC Charges for Failing to Disclose a Cybersecurity Incident
On April 24, 2018, Altaba, formerly known as Yahoo, entered into a settlement with the Securities and Exchange Commission (the “SEC”), pursuant to which Altaba agreed to pay $35 million to resolve allegations that Yahoo violated federal securities laws in connection with the disclosure of the 2014 data breach of its user database. The case