Class actions alleging the board of directors breached its fiduciary duties have become increasingly prevalent, as shareholders seek to hold companies liable for operations management, even across multiple corporate layers...
It now appears—at least until the appellate dust settles—that California’s statutory efforts to mandate board seats for females and individuals from underrepresented communities is on hold. The recent defeats that two trial courts handed California suggests now may be an opportune time to rethink (and possibly reframe) statutory board diversity efforts to focus on disclosure, not mandates...
Boards play a pivotal role in establishing an organization that champions, highlights, and capitalizes on diversity, inclusion and equity. Boards must be mindful of how they present themselves...
As part of its updated guidelines, ISS has removed the "grace" period for board diversity so that its policy now reads as follows: Racial and/or Ethnic Diversity: For companies in the Russell 3000 or S&P 1500 indices, generally vote against or withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the board has no apparent racially or ethnically diverse members. An exception will be made if there was racial and/or ...
Following Record-Setting Year, SEC Opens 2022 With $4 Million in New Whistleblower Awards: Is Your D&O Policy Prepared to Respond? 2022 has kicked off with several new whistleblower awards, as the SEC announced earlier this week that it had awarded more than $4 million to whistleblowers who provided information and assistance in two government actions—one for misconduct occurring overseas and a second where the whistleblower’s assistance directly led to the success of the covered action...
SEC Commissioner Crenshaw Voices Additional Support for ESG Disclosures Last week, SEC Commissioner Crenshaw--one of the Democratic members of the SEC Commission--addressed the Center for American Progress and the Sierra Club, and availed herself of the opportunity to once again vocally express support for the ESG disclosures that the SEC is planning to promulgate in the near future...
On October 29, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award for over $2 million to an individual who provided the agency with original information. The whistleblower’s information was used in a successful enforcement action by the U.S. Department of Justice (DOJ)...
Frances Haugen, a former product manager at Facebook, recently revealed her identity as the whistleblower who reported Facebook to the U.S. Securities and Exchange Commission (SEC) and provided internal Facebook documents to Congress and to the press. Questions have arisen about what kinds of protections she and other whistleblowers have when it comes to sharing documents with government regulators, Congress, and news outlets...
Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits , internal controls , and shareholder rights..
The roles and responsibilities of members of the board of directors of private companies are generally dictated by the fiduciary duties that such directors owe to the corporation and its stockholders...
We often hear about a board of directors being sued, but can a plaintiff really sue a corporation's board? According to a recent decision by the Federal Circuit, a plaintiff can't sue a board, at least not as a separate entity in federal court...
In a recent post (“Environmental, Social and Corporate Governance: What are the Risks, Really?”), we discussed the various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance factors (“ESG”)...
Massachusetts Governor Charles Baker’s COVID executive order permitting public companies incorporated in Massachusetts to hold virtual-only shareholder meetings is set to expire on August 14, 60 days after the June 15 lifting of the COVID-19 state of emergency in Massachusetts...
On June 16, 2021, the U.S. House of Representatives passed H.R. 1187 (the “Corporate Governance Improvement and Investor Protection Act”), which would require the Securities and Exchange Commission (“SEC”) to establish rules requiring public companies to disclose certain ESG metrics, including metrics related to climate, board diversity, and employee management and welfare practices...
Recently, UCLA Law School Professor posed the question "Why do boards get to spend corporate money to fight off proxy contests?" His answer is answer "because the courts say so". In California, it is because the legislature has said so, at least in the case of nonprofit mutual benefit corporations...
Plaintiffs are inventing new theories to attack businesses for alleged ESG-related deficiencies. Companies need to carefully manage their ESG initiatives, performance, and representations...
Last week, Liz Dunshee at TheCorporateCounsel.net noted that ISS has updated its policies and procedures to explain how it assesses racial and ethnic diversity. Currently, ISS considers board diversity in making voting recommendations for two of its specialty policies: Socially Responsible Investing (SRI) and Catholic Faith-Based. Beginning in 2021, ISS, under its U.S...
The Securities and Exchange Commission (SEC or the Commission) has announced a series of initiatives reorienting the Commission’s agenda to focus on environmental, social, and governance (ESG) issues. In particular, the Commission is gearing up to develop a framework to address ESG disclosures, including climate change risk and diversity and inclusion metrics...
As investor demand for socially responsible investing continues to rise, the U.S. Securities and Exchange Commission (SEC) has increased its focus on compliance practices of investment advisors and funds...
In a recent post on the Nickel Report (“Environmental, Social and Corporate Governance: What are the Risks, Really?”), our colleagues provide a thoughtful discussion of various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance (“ESG”)...
Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration...
On December 1, 2020, Nasdaq filed a proposed rule with the U.S. Securities and Exchange Commission (SEC) that would require certain Nasdaq-listed companies to have at least two diverse directors (according to self-reported gender, race, and sexual orientation) or explain why the company has not been able to meet the proposed minimum diversity standards, and disclose certain board diversity-related statistics. While many have lauded Nasdaq’s proposed rule to promote board diversity, there have been vocal critics of the proposed rule... Notably, in a ...
Directors’ reporting and the statutory audit have taken a battering in light of recent corporate catastrophes such as Thomas Cook Group plc, Carillion plc and BHS...
\Over the past few years, California has enacted legislation that requires public companies in California to meet certain diversity metrics with respect to their boards of directors...