As ESG remains a mainstay of board and investor focus, effective shareholder engagement is as important as ever, and as complex as ever, for ensuring that companies have the external support necessary to advance their long-term strategy.
Continue Reading 2022 Shareholder Engagement Trends and Considerations: ESG and Investor Outreach
SEC Guidance
The Materiality Debate and ESG Disclosure: Investors May Have the Last Word
By David Lopez, Jared Gerber & Jonathan R. Povilonis on
In 2021, investors and regulators continued to focus on the scope and quality of public company disclosure of environmental, social and governance information.
Continue Reading The Materiality Debate and ESG Disclosure: Investors May Have the Last Word
Selected Issues for Boards of Directors in 2022
By Cleary Gottlieb on
Each year, we ask colleagues from around our firm to boil down the issues in their fields that boards of directors will be facing in the coming year. In the following pages, we present the results for 2022 – focused updates on 16 topics that will feature on board agendas throughout the year.
The concerns…
SEC Proposes Major Rule Changes on Trading Plans and Corporate Buybacks
By Nick Grabar & Lillian Tsu on
On December 15, 2021, the SEC issued for public comment two separate proposals that will, if adopted, significantly affect how corporate directors, officers and employees trade securities of their companies and how companies repurchase their own shares.
This memorandum walks through the two proposals in turn and concludes with some general takeaways and possible issues
The SEC Backs Off on Proxy Advisory Firms
By Cleary Gottlieb on
On November 17, the SEC proposed new rule amendments that would eliminate the core of the new requirements it imposed on proxy advisory firms in July 2020. The SEC had previously announced it would not enforce these requirements, so the process between proxy advisory firms and subject companies will be largely unregulated, much as it…
Virtual Shareholder Meetings now Permanently Permitted in NY
By Helena K. Grannis & Francesca L. Odell on
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
SEC Provides New Guidance on Shareholder Proposals – Likely To Limit Companies’ Ability To Exclude Environmental and Social Proposals
By Francesca L. Odell, Mary E. Alcock, Helena K. Grannis, Jeff J. Shim & Nikta Daijavad on
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
SEC Brings SPAC Enforcement Action and Signals More to Come
By Adam Brenneman, Nick Grabar, Rahul Mukhi, Jared Gerber, JD Colavecchio & Julian Cardona on
Posted in Enforcement, SEC Guidance
On July 13, 2021, the Securities and Exchange Commission (“SEC”) announced a major enforcement action related to a proposed merger between a special purpose acquisition company (“SPAC”) and a privately held target company (“Target”). This followed numerous warnings by the SEC staff over several months of enhanced scrutiny of such transactions under the federal securities laws.[1] The respondents, except for the Target’s CEO, settled the action by collectively agreeing to civil penalties of approximately $8 million and to certain equitable relief described below. [2]
Continue Reading SEC Brings SPAC Enforcement Action and Signals More to Come
SEC Charges Eight Companies and Signals Need for Better Disclosures About Delayed Filings
By Nick Grabar, David Lopez, Matthew C. Solomon, Alexander Janghorbani & Fernando A. Martinez on
Posted in SEC Guidance
On April 29, 2021, the Securities and Exchange Commission (the “SEC”) announced settled charges against eight public companies that filed notifications of late filings on Form 12b-25 (more commonly known as “Form NT”) without disclosing in those filings a pending restatement or correction of financial statements.
These settlements are a reminder that filing a Form…
SEC Staff Risk Alert Lays a Marker for Advisers on ESG Focus Areas
By Robin M. Bergen, Elizabeth Lenas & Zachary Baum on
Posted in SEC Guidance
Last week, the SEC Division of Examinations issued a risk alert describing observations from recent examinations of investment advisers that manage and offer ESG investment options. The Risk Alert highlights observed deficiencies in several key areas that we expected the Staff to scrutinize using its traditional regulatory arsenal: advisers’ practices inconsistent with ESG disclosures, unsubstantiated…