Mergers and Acquisitions, Corporate Governance, Shareholder Activism
Yesterday the Securities and Exchange Commission took two significant actions relating to the MD&A disclosures in annual and quarterly reports of public companies.
First, it proposed amendments to MD&A requirements that would, if adopted, make significant and long-overdue improvements to a central disclosure requirement of the U.S. securities laws. Second, it issued guidance on the…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
Corporate Purpose
On August 19, 2019, the Business Roundtable released its latest Statement on the Purpose of a Corporation, emphasizing commitment to all stakeholders.[1] The Statement received a lot of attention…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
SEC Disclosure and Reporting Developments
Recently, the US Securities and Exchange Commission continued to move forward with a number of disclosure effectiveness and simplification initiatives, the details of which are available in…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
Last year at this time, companies and boards were wrestling with the impact of the new revenue recognition standard and the new lease accounting standard. The next big innovation in accounting standards…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
Investors and other stakeholders continue to focus on environmental, social and governance (ESG) issues at public companies, both as a driver of financial performance and as a factor of social importance.
The…
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.
We foresee investors continuing to both refine and expand their demands on corporate boards in 2020. With the particular focus on board refreshment and diversity, significant pressure is placed on nominating and…
Recent changes in political climates, legal reforms and social norms have had varying (and sometimes conflicting) impacts on how companies are run; however, they have all contributed to a growing demand that companies expand their focus beyond shareholder value creation.
Environmental, social and governance concerns dominate shareholder proposals and engagement efforts, and discussions of corporate…
The SEC is taking renewed aim at earnings management, and this time it’s not just improper revenue recognition.
Both in its recent enforcement order against Marvell Technology Group – imposing s $5.5 million fine and a cease-and-desist order – and in its on-going action against Under Armour,[1] the SEC has focused on what, anecdotally, is not a terribly uncommon practice – accelerating (or “pulling in”) sales from a future quarter to the present in order to “close the gap between actual and forecasted revenue.”[2] In both cases, the schemes consisted of offering various incentives, such as “price rebates, discounted prices, free products, and extended payment terms”[3] to entice customers to accept products in the current quarter that they would not need until the next. In an environment of declining sales, these inorganic efforts to meet earnings numbers allegedly misled the market about the direction of the business.…
Continue Reading SEC Cracks Down on Earnings Management
On November 5, the SEC released its widely anticipated proposed changes to some of the procedural requirements for shareholder proposals to be included in management’s proxy statement under Exchange Act Rule 14a-8. In this latest release, the SEC addresses procedural requirements that it has not revised in more than 20 years. The release proposes five…
On November 5, a divided Securities and Exchange Commission (“SEC”) proposed new rules about proxy advisory firms. The proposed rules would, if adopted, have three principal effects:
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