On November 22, the Securities and Exchange Commission (SEC) stayed the recently enacted Share Repurchase Disclosure Modernization Rule (Repurchase Disclosure Rule) pursuant to section 705 of the Administrative Procedure Act and the U.S. Court of Appeals for the Firth Circuit’s (Fifth Circuit) October 31, 2023 opinion providing the SEC 30 days to correct defects in the Repurchase Disclosure Rule. For an overview of the Fifth Circuit’s October 31 opinion, please refer to our earlier blog post: Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules.Continue Reading SEC Stays Repurchase Disclosure Rules and the Fifth Circuit Denies SEC’s Motion for Additional Time to Cure Rule Defects
California GHG Emission Website Disclosure Legislation to Take Effect on January 1, 2024
Recently, the State of California enacted Assembly Bill 1305: the Voluntary Carbon Market Disclosures Act (AB 1305), which requires companies, under certain circumstances, to make website disclosures of certain information about their greenhouse gas (GHG) emissions and emissions-reduction programs. Continue Reading California GHG Emission Website Disclosure Legislation to Take Effect on January 1, 2024
Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules
On October 31, the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) issued an opinion finding that the U.S. Securities and Exchange Commission (SEC) violated the Administration Procedure Act when adopting recent amendments to its share repurchase rules (as amended, the Rule). Rather than vacate the Rule, the Fifth Circuit provided the SEC with 30 days to correct the errors identified by the Fifth Circuit.Continue Reading Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules
SEC Adopts Cybersecurity Disclosure Rules
On July 26, the Securities and Exchange Commission (SEC), by a 3-2 vote, adopted final rules intended to enhance public companies’ disclosures regarding (1) cybersecurity incidents through a new required current report item under Form 8-K and (2) cybersecurity risk management and governance in annual reports on Form 10-K through a new item under Regulation S-K. Continue Reading SEC Adopts Cybersecurity Disclosure Rules
A Summary of Certain Proxy Advisory Firm and Institutional Investor Board Diversity Policies
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
SEC Staff Significantly Changes Guidance on Shareholder Proposals and Rescinds Prior Guidance
On November 3, Chairman Gary Gensler announced that the Staff (Staff) of the Securities and Exchange Commission’s (SEC) Division of Corporation Finance released SLB 14L (“new guidance”) regarding shareholder proposals.
The new guidance significantly changes the Staff’s approach when determining whether a shareholder proposal may be properly excluded from a company’s proxy statement. The new guidance rescinds SLBs 14I, 14J, and 14K (Rescinded SLBs), as well as any provisions of other prior Staff guidance that could be considered as inconsistent with the new guidance. A few of these changes are highlighted below.
Significant Social Policy Exception
The new guidance significantly impacts Rule 14a-8(i)(7), commonly referred to as the “ordinary business exception.” This substantive basis for exclusion permits a company to exclude a proposal that “deals with a matter relating to the company’s ordinary business operations.” Under the new guidance, the Staff will realign its approach for determining whether a proposal relates to “ordinary business” with the standard the SEC initially set forth in 1976, which provided an exception for certain proposals that raise significant social policy issues.
According to the new guidance, the Staff believes that an “undue emphasis was placed on evaluating the significance of a policy issue to a particular company at the expense of whether the proposal focuses on a significant social policy.”Continue Reading SEC Staff Significantly Changes Guidance on Shareholder Proposals and Rescinds Prior Guidance
SEC Reduces Registration Filing Fee Effective October 1, 2021
On August 23, the Securities and Exchange Commission (SEC) announced that effective October 1, 2021, the fees that public companies and other issuers pay to register their securities with the SEC will be set at $92.70 per million dollars of the proposed maximum aggregate offering price of the securities to be registered, a 15% reduction
A Summary of Certain Proxy Advisory Firm and Institutional Investor Board Diversity Policies
Institutional investors and proxy advisory firms continue to develop and refine 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 is a summary of published board diversity policies of certain institutional investors and proxy advisory firms into a singular resource for ease of reference. Below the initial breakdown, certain policies concerning board diversity shareholder proposals are described. Continue Reading A Summary of Certain Proxy Advisory Firm and Institutional Investor Board Diversity Policies
Preparing for the Upcoming Proxy Season: Public Company Reporting & Disclosure Considerations
Bass, Berry & Sims attorneys Kevin Douglas, Eric Knox and Sehrish Siddiqui were co-presenters alongside Stephanie Bignon, Assistant General Counsel, Delta Air Lines and Priya Galante, Vice President, Assistant General Counsel & Assistant Secretary, AutoZone at the Society for Corporate Governance’s Southeastern Chapter webinar earlier this month.
This program, titled, “Preparing for the Upcoming Proxy
Focus on Boardroom Diversity Intensifies
Over the last few weeks, we have seen a flurry of activity concerning diversity in the boardroom. The Nasdaq Stock Market LLC (Nasdaq) proposed to the Securities and Exchange Commission (SEC) a new diversity rule and proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis each announced expanded diversity proxy voting guidelines. These developments continue a trend of increased investor focus on board diversity.
Nasdaq Proposes Diversity Requirement
Nasdaq filed a proposal this week that, if approved by the SEC (subject to certain exceptions), would ultimately require boards of Nasdaq-listed companies to have at least two diverse directors, consisting of at least one director whose self-identified gender is female and at least one director who self-identifies as either an underrepresented minority or LGBTQ+ (in each case as defined in the proposal).
If approved by the SEC, all Nasdaq-listed companies would be required to disclose certain statistical information regarding the diversity of their boards within one year of approval by the SEC (the Effective Date) and have at least one diverse director within two years of the Effective Date. Additionally, companies listed on the Nasdaq Global Select or Global Market tiers would be required to have at least two diverse directors within four years of the Effective Date and companies listed on the Nasdaq Capital Market would have to meet the same requirement within five years of the Effective Date. Companies failing to meet applicable requirements would have to provide to Nasdaq an explanation of their non-compliance. According to Nasdaq’s study, currently, more than 75% of its listed companies would not meet the requirements set forth under the proposed rule.Continue Reading Focus on Boardroom Diversity Intensifies