In the latest development in what has become a widespread push toward greater board diversity, Nasdaq has filed a proposal with the SEC that would require Nasdaq-listed companies to disclose whether the companies meet Nasdaq-specified board diversity requirements. If approved, the new listing rules would require companies to have at least one female director and one director who is a racial minority or who self-identifies as LGBTQ+, or to provide an explanation why they do not. A copy of Nasdaq’s December 1, 2020 proposal can be found here. Nasdaq’s December 1, 2020 press release concerning the proposal can be found here.
Continue Reading Nasdaq Pushes Proposed Board Diversity Listing Rules

Michael W. Peregrine

In the following guest post, Michael W. Peregrine, a partner at the McDermott, Will, Emery law firm, takes a look at the impact the administration of President-Elect Joe Biden may have on corporate governance. This article is based on a feature Peregrine originally posted on Forbes.com and available here. I would like to thank Michael for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Michael’s article.
Continue Reading Guest Post: Biden in the Boardroom: What to Expect On Corporate Governance From the New Administration

Richard M. Leisner

After many decades of law practice, legal veteran Richard M. Leisner, a Senior Member in the Trenam law firm in Tampa, found that increasingly he has been called upon to be a sounding board and resource on proposed corporate transactions. In the following guest post, which is the third installment in a three-part series, Richie recounts a number of “open door encounters” – that is, occasions when colleagues came to his office to discuss pending matters. There are a number of important lessons from the tales described below. A version of this article previously was published in Trenam Law News & Insights, available at www.trenam.com. I would like to thank Richie for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Richie’s article.
Continue Reading Guest Post: Corporate Governance Tales From (Virtual) Open Door Encounters – Part 3

In 2018, California passed a law mandating gender diversity on the boards of directors of companies headquartered in California. The legislation known as SB 826 served as the model for the separate board racial diversity legislation that California Governor Gavin Newsom signed into law at the end of September. The California Partners Project, a group co-founded by California First Lady Jennifer Siebel Newsom, recently published its first progress report on the growth in women’s representation on corporate boards for publicly traded companies headquartered in California since the enactment of SB 826. As the report shows, there has been a significant increase in the number of women on the boards of California headquartered companies. A copy of the report can be found here. An October 15, 2020 post on the Cooley law firm’s PubCo blog about the report can be found here.
Continue Reading Progress Report on California Public Company Board Gender Diversity Requirements

Richard M. Leisner

After many decades of law practice, legal veteran Richard M. Leisner, a Senior Member in the Trenam law firm in Tampa, found that increasingly he has been called upon to be a sounding board and resource on proposed corporate transactions. In the following guest post, which is the second installment in a three-part series, Richie recounts a number of “open door encounters” – that is, occasions when colleagues came to his office to discuss pending matters. There are a number of important lessons from the tales described below. A version of this article previously was published in Trenam Law News & Insights, available at www.trenam.com. I would like to thank Richie for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Richie’s article.
Continue Reading Guest Post: Corporate Governance Tales from (Virtual) Open Door Encounters – Part 2

As I have noted in prior posts, one of the follow-on effects of the recent racial justice movement has been increased scrutiny of racial diversity within corporate management, and in particular on corporate boards. The boards of several publicly traded companies have been hit with shareholder derivative lawsuits alleging that the directors breached their fiduciary duties by failing to include African-American individuals on the boards, while at the same time the companies were touting their diversity and inclusion efforts.

In addition to the recent litigation, efforts to advance board racial diversity have included legislation. Earlier this year, the California legislature passed a bill mandating the inclusion on boards of California headquartered companies of representatives of “underrepresented communities.” On September 30, 2020, California Governor Gavin Newsom signed the bill into law. As discussed below, even though the law has only been in place for a few days, a lawsuit challenging the bill has already been filed.
Continue Reading California Board of Directors Diversity Bill Signed Into Law, Challenged by Lawsuit

The following guest post takes a look at the role of the Executive Committee of a corporate Board of Directors. This article was written by H. Stephen Grace, President of H.S. Grace & Company, Inc.; Susan Koski-Grafer, Member of the Board of Advisors of Grace & Co.; and S. Lawrence Prendergast, Member of the Board of Advisors of Grace & Co. This article draws on the article authored by these authors in the July 2020 edition of  ABA Business Law Today titled Why a Company Should Consider Using an Executive Committee of Its Board of Directors. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Using an Executive Committee of the Board of Directors

Richard M. Leisner

After many decades of law practice, legal veteran Richard M. Leisner, a Senior Member in the Trenam law firm in Tampa, found that increasingly he has been called upon to be a sounding board and resource on proposed corporate transactions. In the following guest post, which is the first installment in a three-part series, Richie recounts a number of “open door encounters” – that is, occasions when colleagues came to his office to discuss pending matters. There are a number of important lessons from the tales described below. A version of this article previously was published in Trenam Law News & Insights, available at www.trenam.com. I would like to thank Richie for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Richie’s article.
Continue Reading Guest Post: Corporate Governance Tales From (Virtual) Open Door Encounters – Part 1

The current racial justice movement has created an environment in which corporations and other organizations are under pressure to reconsider and address their diversity and inclusion practices. Organizations that lack racial diversity in their corporate leadership – particularly on their boards of directors – have come in for increasing criticism and, as I have noted on this blog (most recently here), the possibility of board diversity litigation. In addition, beyond the scrutiny and litigation, the California legislature has passed a bill that would require publicly traded companies in the state to have at least one director from a minority community by the close of 2021.

It now appears that as a result of both the scrutiny, the legislation, and perhaps even because of the litigation threat, a number of companies have proactively taken steps to address these issues by pleading to add a Black director to their boards within a year.
Continue Reading Growing Number of Companies Pledge to Address Board Diversity Issues

In the following guest post, Peter A. Atkins, Marc S. Gerber, Kenton J. King, and Edward B. Micheletti of the Skadden, Arps, Slate, Meagher & Flom law firm weigh in on the long-running stockholders versus stakeholders debate. A version of this article previously was published as a Skadden client alert. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Stockholders Versus Stakeholders — Cutting the Gordian Knot