On November 8, 2021, New York Governor Kathy Hochul signed legislation to permanently amend provisions of the NY Business Corporation Law to allow companies to use electronic means to document action by written consent by boards and to hold virtual shareholder meetings, unless such action is prohibited by the entity’s articles of organization or by-laws. As discussed in our prior post, Governor Cuomo issued two Executive Orders: the first, March 7 Executive Order No. 202, declared a disaster emergency and ceased operations of all non-essential businesses in New York state; and the second, March 20th Executive Order No. 202.8, temporarily suspended several regulations governing meetings at New York corporations. Absent this relief, New York state still required an in-person shareholder meeting be held, although following an October 2019 rule change, it also permitted a virtual component (subject to certain conditions).
Continue Reading Virtual Shareholder Meetings now Permanently Permitted in NY

On November 3, 2021, the Division of Corporation Finance of the SEC (the “Staff”) issued Staff Legal Bulletin (“SLB”) No. 14L, which rescinds SLBs Nos. 14I, 14J and 14K, all of which provided guidance with respect to no-action letter requests that sought relief from the Staff to exclude shareholder proposals on the basis of Rule 14a-8(i)(7) and Rule 14a-8(i)(5).  SLB No. 14L also provides guidance on (i) certain technical exclusions, (ii) the use of graphics and images in proposals and (iii) the use of email between proponents and companies.
Continue Reading SEC Provides New Guidance on Shareholder Proposals – Likely To Limit Companies’ Ability To Exclude Environmental and Social Proposals

Diversity has long been a focus for both companies and stakeholders, but 2020 in particular saw diversity come to the forefront of stakeholders’ agendas. Against the backdrop of the ongoing COVID-19 pandemic and its disparate impacts on human capital, alongside increased focus on racial equity and justice and related unrest, we have seen key players across the board push to broaden the scope and impact of diversity issues in the corporate space.
Continue Reading Emphasis on Diversity Initiatives Broadens in Scope and Focuses on Impact

The focus on environmental, social and governance (ESG) matters at public companies continues to grow despite, or perhaps in part because of, the COVID-19 pandemic. ESG continues to mean many things, including company considerations around sustainability, diversity, human capital, corporate purpose and governance. While best practices, disclosure requirements and ESG ratings are developing, boards should continue to prioritize ESG issues, particularly as they relate to long-term company strategy and risk.
Continue Reading Increased ESG Focus Shows No Signs of Slowing Down in 2021

In 2020, the COVID-19 pandemic, economic uncertainty, divisive politics and a historic social justice movement presented unprecedented challenges for boards. While the pandemic eliminated the concept of an in-person boardroom, as well as investor site visits, one-on-one meetings at conferences and strategy retreats, work did not slow, and most directors reported devoting significantly more time to their duties.
Continue Reading Shareholder Engagement Trends and Considerations

The EU Taxonomy Regulation, which entered into force on 12 July 2020, introduces an EU-wide taxonomy (or combined glossary and classification system) of environmentally sustainable activities, as well as new disclosure requirements for certain financial services firms and large public interest entities.

In short, the Taxonomy Regulation is intended to provide certain businesses and investors

The 2020 ‘perfect storm’ of global economic fallout caused by the COVID-19 pandemic, renewed global political focus on the Black Lives Matter movement and the workers of the gig economy, plus the pall of smoke from unprecedented wildfires on five continents, is reinvigorating scrutiny from consumers, regulators and employees on ecological and social sustainability considerations,

On September 23, the SEC voted 3-2 to amend certain of the procedural requirements for the inclusion of shareholder proposals in a company’s proxy statement under Exchange Act Rule 14a-8. The amendments were adopted substantially as proposed in November 2019, except for the so-called “momentum” provision, which would have permitted companies to exclude shareholder proposals

On July 23, 2020, The Conference Board and Cleary Gottlieb Steen & Hamilton LLP hosted a panel discussion on the 2020 proxy season highlights and trends, including the impact of COVID-19 on the 2020 proxy season and offseason engagement. The panelists were Francesca L. Odell, Partner, Cleary Gottlieb, Helena K. Grannis, Counsel, Cleary Gottlieb and Rick E. Hansen, Assistant General Counsel and Corporate Secretary, General Motors Company. The panel was moderated by Paul Washington, Executive Director, ESG Center, The Conference Board.
Continue Reading Cleary Gottlieb Participates in Panel Discussion on Highlights of the 2020 Proxy Season