ESG Impact Webinar SeriesAfter months of anticipation, on March 21, the U.S. Securities and Exchange Commission (SEC) voted 3:1 to propose climate change-related disclosure rules that would implement prescriptive climate-related disclosure requirements (which would be applicable for most public companies) in a wide array of climate-related areas, including with respect to governance, outlook, risk management, GHG emissions, climate-related targets and goals and financial statement disclosures. These proposed rules, which are intended to provide investors with consistent, comparable, and reliable climate-related information, would represent a major shift in the public company disclosure landscape and will require significant advance effort by public companies to facilitate compliance.

Join Bass, Berry & Sims and leading environmental, social and governance (ESG) thought leaders for the next installment in our ESG Impact Webinar series on Tuesday, May 24, 2022. Our panelists will share their experience and perspectives on what in-house counsel should consider as it relates to these proposed climate change disclosure rules. Discussion topics will include:

  • Overview of the Proposed Rules.
  • Required Disclosure under Regulation S-X.
  • Required Disclosure under Regulation S-K.
  • Phase-In Periods.
  • Practical Takeaways and Next Steps.

Continue Reading [WEBINAR] What’s Next in ESG? Understanding the Proposed SEC Climate Change Disclosure Rules

Along with equal prominence, probably one of the most often non-GAAP comments we see issued by the U.S. Securities and Exchange Commission (SEC) Staff involves its objection to adjustments that it believes substitute individually tailored measurement methods for those of GAAP.  Often, the SEC Staff comments will cite to Question 100.04 of the Non-GAAP Financial Measures Compliance & Disclosure Interpretations, as follows:

Question 100.04

Question: A registrant presents a non-GAAP performance measure that is adjusted to accelerate revenue recognized ratably over time in accordance with GAAP as though it earned revenue when customers are billed. Can this measure be presented in documents filed or furnished with the Commission or provided elsewhere, such as on company websites?

Answer: No. Non-GAAP measures that substitute individually tailored revenue recognition and measurement methods for those of GAAP could violate Rule 100(b) of Regulation G. Other measures that use individually tailored recognition and measurement methods for financial statement line items other than revenue may also violate Rule 100(b) of Regulation G.   [May 17, 2016] (emphasis added)

Continue Reading SEC Staff Pushes Back on Adjusting for Normal Recurring “Public Company Expenses”

Institutional investors and proxy advisory firms continue developing and refining their policies regarding board diversity. While gender diversity on public company boards has been in focus for some time now, institutional investors and proxy advisory firms are also increasingly focusing on racial and ethnic diversity as part of their evolving approach to board diversity.

This post summarizes published board diversity policies of several institutional investors and proxy advisory firms into a singular resource for ease of reference. Below the initial breakdown is a description of specific policies concerning board diversity shareholder proposals. 

Continue Reading A Summary of Certain Proxy Advisory Firm and Institutional Investor Board Diversity Policies

Corporate Compliance Insights recently published an article I co-authored with Mai-Khoi Nguyen-Thanh, senior counsel of securities & governance at Boston Scientific, discussing the guidance from the 2022 proxy season related to environmental activity and disclosures.

Continue Reading 2022 Proxy Season Guidance Related to Environmental Disclosures

After months of anticipation, on March 21, 2022, the U.S. Securities and Exchange Commission (SEC) voted 3:1 to propose climate change-related disclosure rules that would impact a company’s annual reports and registration statements.   As indicated previously by the Staff, the proposed climate-related disclosure framework is modeled partially on the Task Force on Climate-related Financial Disclosure’s (TCFD) recommendations and draws upon the Greenhouse Gas (GHG) Protocol.  (See our previous blog post discussing the Staff’s consideration of TCFD). The proposed rules, seemingly unprecedented in nature, are significantly more prescriptive rather than “principles-based” disclosure rooted in materiality, and intended to provide stakeholders with “consistent and comparable data.”

Continue Reading The SEC’s Proposed Climate Change Rules Are Out: Making Sense of 500+ Pages

On March 9, the Securities and Exchange Commission (SEC) proposed rules and amendments to enhance and standardize public companies’ disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting.

Continue Reading SEC Proposes New Cybersecurity Disclosure Requirements

Late last year, the Securities and Exchange Commission (SEC) approved amendments to the federal proxy rules to, among other things, mandate the use of a universal proxy card in public solicitations involving director election contests. On February 24, we hosted a webinar to discuss issues relating to universal proxy rules. Access the recording of the webinar here.

We provided an overview of the universal proxy requirement and proxy contests under the new regime during the webinar. We also discussed universal proxy’s influence on activist strategies and tactics and provided practical guidance on what companies should prepare now. Key insights from the discussion are highlighted below.

Continue Reading Key Takeaways from New Universal Proxy Rules Webinar

I recently provided comments for an article in The Wall Street Journal about public company disclosures related to climate change risks. The Securities and Exchange Commission (SEC) is expected to announce a rule proposal on climate-related disclosures this year. In anticipation of that new proposal, the SEC has been sending comment letters to some companies asking for clarification about their climate change risks to help inform investors in their decision-making.

Continue Reading Insight on Disclosures Related to Climate Change Risks

As investors, advisers, corporations and other stakeholders become increasingly focused on environmental, social and governance (ESG) investments and disclosures, regulators are becoming increasingly concerned with potential “greenwashing,” which Kelly Gibson, Chair of the Securities and Exchange Commission’s (SEC) ESG Task Force, defined as “exaggerating” a “commitment to, or achievement of climate . .  . related goals.”

During a discussion with the Environmental Law Institute, Gibson shared that the ESG Task Force will be concentrated on detecting and bringing enforcement actions for greenwashing in the upcoming year. Gibson explained that due to the “dramatic surge in popularity for ESG focused investment funds” without an equally paced development in U.S.-law and ESG criteria, there is a significant risk that investors may be misled by greenwashing.

Continue Reading The Not So Green-Friendly Practice of Greenwashing

Please join the Bass, Berry & Sims Corporate & Securities Practice Group for a series of complimentary webinars exploring various public company-related securities law issues. These CLE programs will be an extension of our Securities Law Exchange Blog and will feature timely and practical guidance for SEC disclosure counsel on key topics of interest.

In November 2021, the Securities and Exchange Commission (SEC) approved amendments to the federal proxy rules to, among other things, mandate the use of a universal proxy card in public solicitations involving director election contests.

Will the adoption of these rules embolden activists and change the game when it comes to proxy contests and other activist tactics? Are certain types of activists more likely to benefit from the changed rules than others? What should companies be doing now to prepare for the new regime?

The next installment of our public company webinar series features Scott Bell and Jay Knight, corporate & securities attorneys at Bass, Berry & Sims, discussing these and other issues relating to the universal proxy rules.

The webinar will cover the following topics:

  • Overview of the universal proxy requirement.
  • Proxy contests under the new regime.
  • Universal proxy’s influence on activist strategies and tactics.
  • What companies should be doing now to prepare.

Please join us Thursday, February 24 from 12:00 p.m. – 1:00 p.m. CT for this informative discussion. To register, please click here.

Continue Reading [WEBINAR] SEC’s New Universal Proxy Rules: Key Considerations & Next Steps to Prepare