The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

Continued volatility in geopolitical events this past year and corresponding responses in sanctions policies highlight the importance of integrating economic sanctions considerations in board agendas for 2024. In particular, boards of directors should be aware of the increasing global collaboration among sanctions authorities as well as the continuing expansion and application of sanctions in new domains such as digital assets. Sanctions developments can be expected to be particularly fluid in 2024 with respect to China, Russia and Venezuela.

Continue Reading Economic Sanctions: Developments and Lessons for Boards in 2024

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

In 2023, Delaware courts continued to vigorously apply Caremark’s duty of oversight in cases involving corporate misconduct, expressly recognizing for the first time that such claims can be brought against officers in addition to directors.  While a Caremark claim does not necessarily require illegal conduct, Delaware courts continue to make clear that knowing inaction when confronted with illegal conduct is often enough to satisfy its bad faith requirement. This emphasis on bad faith and misconduct may suggest a more functional approach to Caremark claims by Delaware courts, and a departure from the more formal categories of Caremark claims that Delaware courts relied on in the past.  At the same time, we saw Delaware courts sidestep hot-button issues related to corporate political advocacy and defer to the business judgment of boards in order to navigate those sometimes controversial issues.  Finally, we ended 2023 with an uncertain understanding of the scope of MFW review, which has expanded beyond the squeeze-out context in recent years.  The Delaware Supreme Court is currently considering whether to cut back on such “MFW creep.”

Continue Reading Delaware Courts Beef Up Caremark Claims Involving Corporate Misconduct While Leaving Hot-Button Political and ESG Issues to the Boardroom

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) both accelerated their enforcement efforts in 2023, and seem poised to further intensify these efforts in 2024.  At the same time, the SEC disseminated new disclosure requirements across sectors, including disclosures related to cybersecurity and artificial intelligence (AI), and renewed its focus on the corporate and social aspects of environmental, social and governance (ESG) guidance.  Its Enforcement Division remained focused on litigating high-stakes cases in the digital assets space and expanded its sweep related to off-channel communications. 

Continue Reading 2023 Year-in-Review: Developments and Trends in White Collar Enforcement Litigation

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

As 2023 concludes, economic indicators remain mixed on whether there will be a recession or a soft landing over the next year.  Either way, it is likely that a significant number of companies, across industries, will need to restructure their financial debt and operations.  2023 brought a significant increase in chapter 11 filings, with a 61% percent increase compared to the same period in 2022, and filings across industries, including such notable companies as Bed Bath & Beyond, Envision Healthcare, Rite Aid and WeWork.  Other companies have avoided formal bankruptcy filings by undertaking liability management transactions that increase near-term liquidity through additional borrowings.  However, as several high profile filings this year have shown, it is likely that many of these transactions may simply delay, rather than prevent, bankruptcy filings in the future.

Continue Reading One Step Ahead: Restructuring Considerations in an Uncertain Economic Climate

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

EU Corporate Sustainability Reporting Directive

After several years during which the EU’s Corporate Sustainability Reporting Directive (CSRD) had been hotly discussed and anticipated, 2023 saw not only the entry into force of the CSRD itself, but also the adoption and publication of the European Sustainability Reporting Standards (the ESRS).

Continue Reading Sustainability Reporting

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

Companies have identified that the voluntary carbon markets may play an important role in contributing to a reduction in their net greenhouse gas (GHG) emissions, and, therefore, in meeting their GHG emissions reduction goals.  However, they have also exercised caution in embracing the voluntary carbon markets due to complicated standards, carbon credit quality issues and lack of market and pricing transparency.  Since 2020, the Commodity Futures Trading Commission (CFTC) has shown an increasing interest in regulating the voluntary carbon markets, and this interest has culminated in significant developments in 2023, including the Whistleblower Alert, establishment of its Environmental Fraud Task Force, the Second Voluntary Carbon Markets Convening and now the Proposed Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts.  These CFTC initiatives have the potential to address some of the well-known challenges in the voluntary carbon markets, which may lead to a healthier and more robust market.  We begin with a brief overview of the voluntary carbon markets before discussing the CFTC’s recent actions in this area.

Continue Reading Voluntary Carbon Markets: Is It the CFTC’s Time to Shine?

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

Artificial Intelligence (AI), and in particular, generative AI, will continue to be an issue in the year to come, as new laws and regulations, agency guidance, continuing and additional litigation on AI and new AI-related partnerships will prompt headlines and require companies to continually think about these issues.

Continue Reading Generative AI Will Stay Top of Mind in 2024

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

The M&A Environment in 2024

Global deal value in 2023 fell to the lowest level seen in a decade. It was the first year since 2013 that the M&A market failed to hit the $3 trillion value mark, with continued reduced deal activity from private equity firms, which spent 36% less on acquisitions than in 2022. For boards and management teams pondering the M&A environment in 2024, a complex mix of macroeconomic, geopolitical and sector-specific headwinds and tailwinds make prognostication difficult.

Continue Reading Outlook for M&A and Shareholder Activism in 2024

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

In July 2023, the U.S. Securities and Exchange Commission (SEC) adopted final rules to enhance and standardize disclosure requirements related to cybersecurity.  In order to comply with the new reporting requirements of the rules, companies will need to make ongoing materiality determinations with respect to cybersecurity incidents and series of related incidents.  The inherent nature of cybersecurity incidents, which are often initially characterized by a high degree of uncertainty around scope and impact, and an SEC that is laser-focused on cybersecurity from both a disclosure and enforcement perspective, combine to present registrants and their boards of directors with a novel set of challenges heading into 2024.

Continue Reading Crossing a New Threshold for Material Cybersecurity Incident Reporting

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

Executive compensation issues may not have been the predominant focus for boards of directors in 2023 given the enhanced attention to antitrust, diversity and climate reporting matters, among others. However, there have been several notable developments in executive compensation that boards should be mindful of in 2024. We discuss these developments below.

Continue Reading A New Season for Executive Compensation Disclosure