Monthly Archives: April 2025

Survey Highlights Strong Investor Interest in Proxy Voting Choice

Posted by John Galloway, Vanguard, Inc., on

Wednesday, April 30, 2025

Index funds, investors, Proxy voting, Shareholders, voting choice
More from: John Galloway, Vanguard

John Galloway is Global Head of Investment Stewardship at Vanguard, Inc. This post is based on a Vanguard Investment Stewardship memorandum.

VALLEY FORGE, PA (April 24, 2025)—Vanguard today unveiled research outlining investor perspectives on proxy voting. The results highlight investors’ strong desire to participate in a proxy voting choice program, which allows index fund investors to select a policy that will direct how their proportionate shares vote on proxy ballots for companies held in their funds.

“At Vanguard, we believe long-term shareholders – including index fund investors – play a critical role in a healthy corporate governance ecosystem,” said John Galloway, Global Head of Investment Stewardship at Vanguard. “Our research reinforces that investors are keen to make their voices heard, and are looking for asset managers that will empower them to engage in the proxy voting process. Our Investor Choice program democratizes access to proxy voting, providing investors in index funds the ability to direct how shares associated with their financial interests are voted as they pursue their long-term financial goals.”

Corporate Transparency Act Update: No Reporting for US Entities and New Deadlines for Foreign Entities

Posted by Melissa Goldstein, Jessica Romano, and Kyle Hendrix, Schulte Roth & Zabel LLP, on

Wednesday, April 30, 2025

BOI, CTA, FinCEN, Interim Final Rule, reporting
More from: Jessica Romano, Kyle Hendrix, Melissa Goldstein, Schulte Roth & Zabel

Melissa Goldstein is a Partner, Jessica Romano is Special Counsel, and Kyle Hendrix is an Associate at Schulte Roth & Zabel LLP. This post is based on an SRZ memorandum by Ms. Goldstein, Ms. Romano, Mr. Hendrix, Betty Santangelo, Michael S. Didiuk, and Bryson Kern.

Consistent with the US Department of the Treasury’s (“Treasury”) March 2, 2025, announcement, on March 21, 2025, Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule (“Interim Final Rule”) narrowing the scope of reporting required under the Corporate Transparency Act and its implementing regulations (collectively, the “CTA”)[1] to exclude reporting from US entities and US persons.[2] The Interim Final Rule is subject to comments but is effective immediately upon publication in the Federal Register. Comments on the Interim Final Rule are due 60 days from its publication and it may take several more months after that for FinCEN to issue a final rule.

Barbarians at the Gate! The Fallacy of “Best Practices”

Posted by Allison Wyderka and Wickham Egan, Egan-Jones Ratings Company, on

Tuesday, April 29, 2025

Board of Directors, CEOs, Corporate governance, Staggered Elections
More from: Allison Wyderka, Wickham Egan, Egan-Jones Proxy Services

Allison Wyderka is the Head of Product and Research for Proxy Services, and Wickham Egan is the Director of Business Development and Operations, at Egan-Jones Ratings Company. This post is based on their Egan-Jones memorandum.

I. Facing the Visigoths

“We need to push the barbarians back from the city gates!”

-Ted Forstmann, referencing the 1988 takeover of RJR Nabisco

Those involved in the hostile takeovers of the 1980’s were fighting for their livelihoods. As a result, they used the strongest possible terms to describe their opposition in an effort to fend them off. Though many corporate boards failed to fend off takeovers, new practices were established to stymie future hostile efforts.

Staggered elections of directors became one popular practice. Because only a third of directors might be up for election in a given year, it would take three years to turn over all directors. This made hostile takeovers less attractive because raiders could not take control of the company in one fell swoop. Thus, staggered elections became “best practice.”

However, in the early 2000s, annual elections began to gain favor with proxy services firms. The argument is that shareholders ought to have more immediate control over the company. While supporters of this change in “best practice” might argue that other takeover defense practices have been established, such as the poison pill, adoption of these practices has been limited.

Regardless, it is right to acknowledge that the “best practice” has changed and will likely continue to do so. Perhaps these popular governance practices are better termed “market standard” since:

Standards regularly evolve, and
One size does not fit all, as we have previously argued in the case of director tenure. What is best for one company may not be the best for another.

2025 Proxy Season Preview

Posted by Anthony Garcia, Enrico Colombo, and Peter Reali, Nuveen, on

Tuesday, April 29, 2025

Board of Directors, ESG, Proxy voting, Shareholders
More from: Anthony Garcia, Enrico Colombo, Peter Reali, Nuveen

Anthony Garcia and Enrico Colombo are Senior Directors, and Peter Reali is a Managing Director, at Nuveen. This post is based on their Nuveen memorandum.

Proxy voting has hopefully re-found its place as part of investment decision-making.

As proxy voting comes back full circle, stewardship for long-term sustainable value creation is coming of age.

SUMMARY

Proxy voting has long been a fundamental shareholder right, long before “ESG” became a mainstream investment topic. Over the last decade, proxy voting has been increasingly recognized as a powerful ‘tool in the toolbox’ to engage with portfolio companies. With this recognition, some investment managers have used proxy votes to prove their ESG conviction or advance a normative position on what should create long-term, sustainable value. However, with voting under a renewed spotlight, there has been higher scrutiny from different groups, contributing to conflicting views of proxy voting and its impacts.

What is interesting in this evolution of views is that the activity itself of voting proxies has not changed. Rather, many in the industry tried to leverage proxy voting in pursuit of other aspirational goals – whether commercial or outright political. Regardless of motives, it is likely that proxy voting will continue to be a tool in the toolbox but fail as an arrow in the quiver of greater ambitions.

Evolving Shareholder Engagement Landscape and Bespoke Compensation Design

Posted by Daniel J. Ryterband and Serdar Sıkça, FW Cook, on

Monday, April 28, 2025

Corporate governance, Executive Compensation, Institutional Investors, shareholder engagement
More from: Daniel Ryterband, Serdar Sikca, FW Cook

Daniel J. Ryterband is Chairman & Chief Executive Officer, and Serdar Sikca is a Principal, at FW Cook. This post is based on their FW Cook memorandum.

In 2023, at what appeared to be the pinnacle of the ongoing struggle for companies to use customized compensation systems to drive strategy without incurring the wrath of the proxy advisory firms and governance community, I wrote about Bespoke vs. Homogenous Compensation Systems. This piece addressed the importance of regularly engaging with shareholders and how it can lead to greater open-mindedness to compensation policies that may not align with third-party defined “best practices.” Since that time, the macro-economic and geo-political environment has become further complicated, making it even more important for companies to use bespoke compensation design to support strategic initiatives that are unique to each specific organization. The criticality of customized compensation design has never been greater, and shareholder acceptance remains highly dependent on a strong business rationale, transparent and complete disclosure, and an openness to engage in direct discussions by both investors and listed companies.

Proactive shareholder engagement takes effort, on both sides, and it pays dividends to all parties. In my experience, issuers who have proactively engaged with investors often find it easier to craft custom compensation programs and rationalize them as consistent with long-term shareholder value goals. But when programs or specific actions differ significantly from established norms, even the most compelling rationale may be challenged as unnecessary or even egregious, thereby making it even more important that a relationship of trust exists between listed companies and the stewardship professionals who make the voting decisions at major investors.

The flurry of activity around investor engagement continues as companies face an ever more uncertain set of challenges, which is why we decided to author the brief update below, as informed by our dialogue with institutional investors as well as clients. As we enter the busy part of the 2025 proxy season and the preparation for early stages of year-end compensation decision making, getting engagement right is more important than ever. READ MORE »

SEC Enforcement 2.0: Chairman Atkins Has Arrived

Posted by Tami Stark, Ladan Stewart, and Joel Cohen, White & Case LLP, on

Monday, April 28, 2025

Artificial intelligence, Crypto, enforcement, SEC
More from: Joel Cohen, Ladan Stewart, Tami Stark, White & Case

Tami Stark, Ladan Stewart, and Joel Cohen are Partners at White & Case LLP. This post is based on a White & Case memorandum by Ms. Stark, Ms. Stewart, Mr. Cohen, Maria Beguiristain, Brent Wible, and Robert DeNault.

Paul Atkins has taken the reins of the US Securities and Exchange Commission (SEC). After being confirmed by the Senate on April 9, Atkins officially began his tenure as SEC Chairman on April 21. His arrival is expected to usher in a new era of enforcement, as a leaner and more streamlined organization continues to tackle traditional cases like offering frauds and insider trading, while at the same time expanding its focus to emerging technologies like artificial intelligence. Although Chairman Atkins has just arrived in the building, the agency he inherits has already been significantly transformed from the SEC led by his predecessor, Gary Gensler—with important organizational and policy changes already in place.

Contract Rights and Control

Posted by Jill E. Fisch (University of Pennsylvania) and Steven Davidoff Solomon (UC Berkeley), on

Sunday, April 27, 2025

delaware, Delaware cases, DGCL, moelis
More from: Jill Fisch, Steven Davidoff Solomon

Jill E. Fisch is the Saul A. Fox Distinguished Professor of Business Law at the University of Pennsylvania Carey Law School, and Steven Davidoff Solomon is the Alexander F. and May T. Morrison Professor of Law at UC Berkeley School of Law. This post is based on their article, forthcoming in the University of Pennsylvania Journal of Business Law, and is part of the Delaware law series; links to other posts in the series are available here.

In July 2024, Delaware adopted section 122(18) of the DGCL, significantly expanding corporate power to enter shareholder agreements that allocate board-level decision-making authority directly to shareholders. Just months later, in March 2025, the Delaware legislature enacted SB 21, which, among other high-profile reforms, introduced the state’s first statutory definition of a “controlling shareholder.” Together, these developments mark a turning point in Delaware corporate law. Our forthcoming article, Contract Rights and Control, explores how they interact—and sometimes clash—with longstanding fiduciary duty principles.

A First Look at a New California Bill That Would Impact GHG Emissions Disclosures

Posted by Michael Littenberg, Marc Rotter, and Peter Witschi, Ropes & Gray LLP, on

Saturday, April 26, 2025

California, carbon emissions, Climate, GHG Disclosure
More from: Marc Rotter, Michael Littenberg, Peter Witschi, Ropes & Gray

Michael Littenberg is a Partner, Marc Rotter is a Counsel, and Peter Witschi is an Associate at Ropes & Gray LLP. This post is based on their Ropes & Gray memorandum.

A new California bill (Senate Bill 285) – intended to, among other things, help the state achieve its 2045 carbon reduction goals by enabling it to better measure progress against its targets – was introduced in February by Josh Becker, a California State Senator from a district just to the south of San Francisco.

The Evolving Landscape of DEI Shareholder Proposals

Posted by Matteo Tonello, The Conference Board, Inc., on

Friday, April 25, 2025

Anti-DEI, dei, Proxy season, Shareholder proposals
More from: Matteo Tonello, The Conference Board

Matteo Tonello is Head of Benchmarking and Analytics at The Conference Board, Inc. This post is based on a Conference Board memorandum by Andrew Jones, Senior Researcher, ESG Center, and Ariane Marchis-Mouren, Senior Researcher, Corporate Governance, at The Conference Board.

Shareholder engagement in diversity, equity & inclusion (DEI) is evolving in response to broader shifts in corporate governance, investor priorities, and political and legal scrutiny. This report examines recent trends in DEI-related shareholder proposals and early insights from the 2025 proxy season, including declining investor support for DEI initiatives, the rise—but limited success—of “anti-DEI” filings, and the implications for corporations.

Key Insights

DEI-related shareholder proposals peaked in 2021 but remain an important investor focus, with large-cap companies facing pressure to enhance disclosure and commitments.
Shareholder support for all DEI proposals (both pro- and anti-DEI) steadily declined since 2021 as improved corporate disclosures, investor fatigue, proxy advisor opposition, and heightened legal risks make negotiated withdrawals and majority approvals increasingly rare.
Anti-DEI shareholder proposals surged as a share of all DEI-related filings since 2023, although support levels remain very low—averaging less than 2%—as proponents generally use the proposals as a tool to apply pressure rather than expect them to pass.
The polarization of DEI proposals has persisted in the 2025 proxy season, with anti-DEI filings increasing but receiving little support; meanwhile, several large firms face competing proposals from both sides of the ideological spectrum.

Weekly Roundup: April 18-24, 2025

Posted by the Harvard Law School Forum on Corporate Governance, on

Friday, April 25, 2025

Weekly Roundup
More from:

This roundup contains a collection of the posts published on the Forum during the week of April 18-24, 2025

Presentation of Arguments in a Brief of Current and Retired Practitioners and Professors as Amici Curiae in Support of Reversal of the Opinion of the Delaware Court of Chancery in In Re Tesla, Inc. Derivative Litigation

Posted by Jonathan Macey (Yale Law School), on Thursday, April 24, 2025

Tags: Court of Chancery, delaware, Elon Musk, Shareholders, Tesla, Transactions

Strategic Governance of AI: A Roadmap for the Future

Posted by Maureen Bujno, Christine Davine, and Lara Abrash, Deloitte LLP, on Thursday, April 24, 2025

Tags: AI, Artificial intelligence, Board of Directors, Corporate governance

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Monthly Archives: April 2025

Survey Highlights Strong Investor Interest in Proxy Voting Choice

Corporate Transparency Act Update: No Reporting for US Entities and New Deadlines for Foreign Entities

Barbarians at the Gate! The Fallacy of “Best Practices”

I. Facing the Visigoths

2025 Proxy Season Preview

SUMMARY

Evolving Shareholder Engagement Landscape and Bespoke Compensation Design

SEC Enforcement 2.0: Chairman Atkins Has Arrived

Contract Rights and Control

A First Look at a New California Bill That Would Impact GHG Emissions Disclosures

The Evolving Landscape of DEI Shareholder Proposals

Key Insights

Weekly Roundup: April 18-24, 2025

Is Your Board Asking the Really Tough Questions about Risk?

AI Readiness: The Four Steps CEOs Need to Take to Build AI-Powered Organizations

First Circuit Vacates Summary Judgment Award and $93 Million Order in Revenue Sharing Case

EU Parliament Votes To Delay Implementation of Sustainability Reporting and Due Diligence Obligations

Are CEOs Overpaid?

2024 Sustainable Fund Trends: Index ETFs Are the Silver Lining

Riding Out the Storm – A Non-Exhaustive Punch List for Compensation in Volatile Times

Skin in the Game: Does Outside Directors’ Equity-based Compensation Induce or Mitigate Stock Price Crash Risk?

Considerations in Proxy Disclosure

A Guide for Boards Evaluating Conflicted Transactions Under the Amended Delaware Law

FÁCIL: Opening New Paths for the Capital Market in Brazil

2025 Say on Pay Reports

Presentation of Arguments in a Brief of Current and Retired Practitioners and Professors as Amici Curiae in Support of Reversal of the Opinion of the Delaware Court of Chancery in In Re Tesla, Inc. Derivative Litigation

Strategic Governance of AI: A Roadmap for the Future

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