The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.
In 2022, public companies witnessed a new kind of corporate governance activism.
New rules and regulations from the Securities and Exchange Commission (the SEC) use the lever of mandated disclosure to push for corporate governance actions, and in some cases what amounts to reforms. The SEC’s broad foray into governance represents an expansion of historically more limited SEC rules in the governance space, mostly focused on audit committee and auditor independence and more general disclosure of board structures and oversight. Many commenters note that investors were well able to push companies historically for disclosure on governance matters and that the proposed SEC disclosure mandates may impinge on decisions and policies that boards should be able to define and/or compel board structure and composition to move in directions that are not best suited to the effective functioning of the board.
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For a PDF of the full memorandum, please click here.