Corporate Governance

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The topic of diversity on corporate boards has been the focus of a great deal of recent attention, discussion, and action. California has enacted legislation aimed toward more diverse boards; certain institutional investors have begun pushing for greater diversity in the boardroom; and there has even been litigation targeting companies whose boards are not diverse. In addition, last December, the Nasdaq securities exchange filed with the SEC a proposal requiring companies listed on its exchange to disclose whether the company is in compliance with the exchange’s diversity standards or to explain why it is not in compliance. On August 6, 2021, the SEC, in a vote split along party lines, approved the proposed Nasdaq guidelines, making the guidelines applicable to most of the nearly 3,000 Nasdaq listed company. The SEC’s August 6, 2021 order approving the guidelines can be found here.
Continue Reading SEC Approves Nasdaq’s Board Diversity Disclosure Requirements

As this blog’s readers know, one of the important corporate governance developments in recent months has been the heighted focus on board diversity. As part of this focus, several states have enacted statutory requirements addressing board diversity. The following guest post from Jessie K Liu, Susan Saltzstein, Lauren Aguiar and Tansy Woan of the Skadden, Arps, Slate, Meagher & Flom LLP law firm take a look at the various state and regulatory initiatives, and provide a survey overview of the relevant state legislation. This article updates a prior 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: Diversity in the Corporate Boardroom:  A Current Scorecard

Last summer, when California adopted a new law requiring corporations based in the state to add board members from “underrepresented communities,” it modeled the statute on the board gender diversity statute the state had enacted two years before. The constitutionality of the board gender diversity law itself had been challenged in a federal court lawsuit, but the court hearing the suit had dismissed it based on the named plaintiff’s lack of standing. However, in a June 21, 2021 opinion (here), the Ninth Circuit reversed the district court, finding that the claimant had sufficient standing to pursue the claim. The appellate court’s action has implications both for the board gender diversity statute and the more recently adopted board racial diversity statute, which has also been challenged in court.
Continue Reading 9th Circ. Revives Legal Challenge to California Board Gender Diversity Statute

The importance of ESG issues for companies and their executives is nothing new, but in recent days ESG issues seem to have taken center stage. The surprising success of activist investor Engine No. 1 in electing climate change-focused candidates to the board of ExxonMobil and the order by the Dutch court requiring Royal Dutch Shell to reduce carbon dioxide emissions by 50% of 2019 levels by 2030 are just two of the recent examples of the ways in which ESG issues increasingly have come to predominate corporate agendas. As discussed below, challenges related to ESG issues seem likely to continue. Among other things, these developments present new risks for potential D&O liability exposures as well.
Continue Reading The Predominance of ESG-Related Issues and the Implications for Corporate Boards

John M. Orr

Though we are still early on in the Biden Administration’s tenure, it is already clear that ESG-related issues have emerged as a important point of focus and emphasis for the Administration. In the following guest post, John M. Orr, Directors & Officers Liability Product Leader for Willis Towers Watson,
takes a look at a number of the important implications of the Administration’s ESG focus. A version of this article previously appeared on the Willis Towers Watson website (here). I would like to thank John 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 John’s article.
Continue Reading Guest Post: Changes in ESG-Related D&O Risk in a New US Presidential Administration

Andrew Milne

In a March 2021 paper entitled “Restoring trust in audit and corporate governance” (here), the UK government set out a number of proposed reforms in order to try to increase trust in corporate governance, including, among other things, proposed new company reporting requirements. In the following guest post, Andrew Milne discusses the potential implications for UK directors from the reform proposals under consideration. Andrew is a Senior Associate at the CMS law firm, and a co-author of the UK Chapter in Directors’ Liability and Indemnification. I would like to thank Andrew 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 Andrew’s article.
Continue Reading Guest Post: UK Sarbanes Oxley?

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