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

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

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

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

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

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

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

Register NowJoin our corporate and securities attorneys for our 2nd Annual Corporate & Securities Counsel Public Company Forum. This virtual program will feature timely and practical guidance on the latest developments in corporate and securities matters impacting public company in-house counsel.

Panels will include speakers from AutoZone, BNY Mellon, Brown-Forman, Farmer Brothers

Bass, Berry & Sims invites you to join us for our 2nd Annual Corporate & Securities Counsel Public Company Forum.

Although we are unable to meet in-person due to ongoing concerns resulting from the COVID-19 pandemic, we are excited to host this year’s forum virtually.

This complimentary program will feature timely and practical guidance on the latest developments in corporate and securities matters impacting public company in-house counsel.

Panel and breakout discussion topics will include:

  • Financial reporting and disclosure considerations.
  • Insights from public company general counsel.
  • 2021 proxy season developments.
  • Restaurant & hospitality industry trends.
  • ESG considerations.

We are also pleased to welcome Myron T. Steele, former Chief Justice of the Delaware Supreme Court, as a featured speaker. Bass, Berry & Sims partner Leigh Walton will lead a fireside chat with former Chief Justice Steele about recent areas of focus for the Delaware judiciary, including COVID-19 related emergency orders, directors’ considerations for multiple stakeholder interests when discharging fiduciary duties, and corporate governance around ESG and diversity. Their discussion will also review the impact of federal elections on corporate law.

The program will take place on December 8, 2020, from 1:00-4:00PM CT and is intended for in-house counsel, public company finance and SEC reporting personnel, compliance officers, and other interested professionals.

Continue Reading [REGISTER NOW] Corporate & Securities Counsel Public Company Forum | December 8, 2020