Monthly Archives: September 2025

Ethnic Representation in New Russell 3000 Director Appointments Has Fallen 22% Since 2022

Posted by Joyce Chen, Equilar, Inc., on
Sunday, September 21, 2025
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Joyce Chen is an Associate Editor at Equilar, Inc. This post is based on an Equilar memorandum by Ms. Chen and Jeremy Ho.

Board diversity continues to be at the forefront of corporate governance discussions, widely recognized as both a matter of equity and a driver of stronger decision-making and business performance. Yet, recent political and regulatory developments have raised new questions about its trajectory. Following President Trump’s executive order terminating diversity, equity and inclusion (DEI) programs in the federal government, public companies have also started to reassess their own commitments. While the executive order only applies to federal agencies, its ripple effects are evident amongst public corporations, where larger companies in particular appear to be slowing or scaling back DEI initiatives. This raises the question on potential long-term impact for underrepresented ethnic groups.

Data from the Russell 3000 indicates that ethnic diversity among new board appointments declined in recent years. The prevalence of ethnically diverse individuals filling new board seats fell sharply, dropping from 23.3% in 2022 to 18.2% in 2024—a 21.9% decrease.

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Exxon’s Auto-Voting Plan: Implications for Shareholder Activism and Considerations for Companies

Posted by Carmen X. Lu and Scott A. Barshay, Paul, Weiss, Rifkind, Wharton & Garrison LLP, on
Saturday, September 20, 2025
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Carmen X. Lu and Scott A. Barshay are Partners at Paul, Weiss, Rifkind, Wharton & Garrison LLP. This post is based on a Paul Weiss memorandum by Ms. Lu, Mr. Barshay, James E. Langston, Kyle T. Seifried, Krishna Veeraraghavan, and Steven J. Williams.

This week, the U.S. Securities and Exchange Commission issued a no-action response stating that it would not recommend enforcement action against Exxon’s proposed auto-voting plan for retail investors. Under the plan, Exxon’s retail investors (including retail investors who beneficially own Exxon shares through a bank, broker or plan administrator) may elect to have their shares automatically voted in accordance with the board’s recommendations. Shareholders who opt into the auto-voting plan can later opt out by either casting their vote at a shareholder meeting or revoking their auto-voting instructions. Exxon intends to issue annual notices to its retail holders reminding them of their enrollment in the auto-voting program.

Exxon’s plan tackles a long-standing dilemma facing companies with a large retail shareholder base. Most retail shareholders do not vote their shares, but when they do, they tend to overwhelmingly vote in favor of management. While the retail base of most large public companies ranges from 15% to 25%, the retail stake in legacy companies that went public decades before the rise of institutional investing can be as high as 40%.

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Remarks by Chair Atkins at the Investor Advisory Committee Meeting

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on
Friday, September 19, 2025
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Paul S. Atkins is the Chairman of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in the post are those of Chairman Atkins and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Good morning, ladies and gentlemen. It is a pleasure for me to be with you in person for the first time as Chairman. [1] I have long believed that the Investor Advisory Committee has an important mission to give considered input to the Commission. And I should like to thank you for your dedicated service—especially those of you for whom today marks your first meeting. We are excited by the perspectives that you will bring to the committee—and by the ways in which you will enhance the public dialogue on key issues facing investors.

Of course, I should also like to extend a warm welcome to today’s moderators and panelists, including two distinguished participants from the United Kingdom’s Financial Conduct Authority (FCA), Ashley Alder and Helen Boyd, whom we are very honored to have with us to discuss the evolving landscape of foreign private issuers (FPIs) in U.S. capital markets. Having just returned from the UK and Europe, where I had the chance to address this very topic, I can say how timely today’s panel truly is.

It is also very timely and fitting for the FCA to be represented here today in light of the long collaboration of our two countries in the financial markets. Both of our countries have vibrant capital markets, and I look forward to working with our UK counterparts to enhance our mutual cooperation and harmonization of regulatory approaches to promote innovation and economic growth.

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Weekly Roundup: September 12-18, 2025

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, September 19, 2025

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This roundup contains a collection of the posts published on the Forum during the week of September 12-18, 2025

2025 Proxy Season Review: Volatility, Evolving Tactics and New Expectations for Shareholder Engagement

Posted by Dan Scorpio and Sheila Ennis, H/Advisors Abernathy, on Friday, September 12, 2025
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Narrative Contradictions: The Invisible Governance Risk

Posted by Craig E. Carroll, Observatory on Corporate Reputation, on Saturday, September 13, 2025
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Do’s and Don’ts of Using AI: A Director’s Guide

Posted by Ken D. Kumayama, Sonia K. Nijjar, and Jenness E. Parker, Skadden, Arps, Slate, Meagher & Flom LLP, on Sunday, September 14, 2025
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Proxy Season Highlights: What the 2025 No-Action Letter Landscape Tells Us About Preparing for 2026

Posted by Brad Goldberg, Beth Sasfai, and Michael Mencher, Cooley LLP, on Monday, September 15, 2025
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Female Equity Analysts and Corporate Environmental and Social Performance

Posted by Kai Li (University of British Columbia), on Monday, September 15, 2025
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2025 Proxy Season Review: From Escalation to Recalibration

Posted by Matteo Tonello, The Conference Board, Inc., on Monday, September 15, 2025
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Proxy Season Global Briefing: Trends on Boards of Directors

Posted by Federica Soro, Kevin Gibb, and Matti Jaakkola, Glass Lewis, on Tuesday, September 16, 2025
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Remarks by Commissioner Uyeda at the SIFMA’s Private Markets Valuation Roundtable

Posted by Mark T. Uyeda, U.S. Securities and Exchange Commission, on Tuesday, September 16, 2025
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What to Keep in Mind for Your Next Purchase Price Adjustment Provision

Posted by Frank Favia, Jonathan Dhanawade, and Andrew Stanger, Mayer Brown, on Wednesday, September 17, 2025
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2025 Proxy Season Recap: Adapting to a New Normal

Posted by Paul DeNicola, Matt DiGuiseppe, and Ariel Smilowitz, PricewaterhouseCoopers LLP, on Wednesday, September 17, 2025
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Statement by Commissioner Crenshaw on Policy Statement Concerning Mandatory Arbitration and Amendments to Rule 431 of the Commission’s Rules of Practice

Posted by Caroline A. Crenshaw, U.S. Securities and Exchange Commission, on Thursday, September 18, 2025
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Statement by Chair Atkins on Policy Statement Concerning Mandatory Arbitration and Amendments to Rule 431 of the Commission’s Rules of Practice

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on Thursday, September 18, 2025
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Statement by Chair Atkins on Policy Statement Concerning Mandatory Arbitration and Amendments to Rule 431 of the Commission’s Rules of Practice

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on
Thursday, September 18, 2025
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Paul S. Atkins is the Chairman of the U.S. Securities and Exchange Commission. This post is based on his recent statement. The views expressed in the post are those of Chairman Atkins and do not necessarily reflect those of the Securities and Exchange Commission or the Staff.

Policy Statement Concerning Mandatory Arbitration

The second item on today’s agenda is a recommendation that the Commission issue a policy statement [1] (the “Policy Statement”) addressing the presence of a mandatory arbitration provision in the governance documents of a company registering offers and sales of securities and its impact on the acceleration of the effectiveness of the registration statement.  In this context, a mandatory arbitration provision requires an investor to arbitrate its claims arising under the federal securities laws with the issuer of the securities.

There are two separate questions with respect to mandatory arbitration.  First, what is the state of the law on the permissibility of mandatory arbitration provisions?  Second, assuming such provisions are allowed, should a company adopt mandatory arbitration?

The answer to the first question sits at the intersection of the federal securities laws, state corporate law, and the Federal Arbitration Act of 1925 (the “Arbitration Act”). The expertise and domain of the Commission and its staff is, of course, in the federal securities laws.  Accordingly, the Policy Statement provides the Commission’s views on whether mandatory arbitration provisions are inconsistent with the federal securities laws – and concludes that they are not.

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Statement by Commissioner Crenshaw on Policy Statement Concerning Mandatory Arbitration and Amendments to Rule 431 of the Commission’s Rules of Practice

Posted by Caroline A. Crenshaw, U.S. Securities and Exchange Commission, on
Thursday, September 18, 2025
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Caroline A. Crenshaw is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on her recent statement. The views expressed in this post are those of Commissioner Crenshaw and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Good morning. Before I begin, I want to thank the staff in the Division of Corporation Finance, the Office of General Counsel, the Division of Economic and Risk Analysis and The Division of Investment Management for their work. And thank you to the operations staff who made today’s meeting possible.

Also, I would like to thank Cicely LaMothe for her service as Acting Director. For those of you who don’t know Cicely, she is a public servant in the best sense of those words. She is dedicated, hard-working, thoughtful and committed to her staff and to the public good. And she does it all with a smile and unflappable composure. She has taken on this very large task—probably for longer than she anticipated—and for that we are grateful. Thank you, Cicely.

Today the Commission finds another way to stack the deck against investors—this time primarily small, retail shareholders in public companies. We do so by opening the floodgates to something called mandatory arbitration. So, what is mandatory arbitration?

Mandatory arbitration forces harmed shareholders to sue companies in a private, confidential forum, instead of a court and without the benefit of proceeding in the form of a class action. While, in theory, arbitration could cut costs for companies, there are real downsides for investors. Arbitrations are typically more expensive for individual shareholders; they are not public; they have no juries [1]; they lack consistent procedures; arbitrators are not bound by legal precedent; arbitration precludes collective action among shareholders; there are limited rights of appeal; and, ultimately, there is no assurance that two identical investors would get the same outcome. If that collection of things transpired in a courtroom without a party’s consent, judges would not hesitate to call it what it is: a violation of due process.

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2025 Proxy Season Recap: Adapting to a New Normal

Posted by Paul DeNicola, Matt DiGuiseppe, and Ariel Smilowitz, PricewaterhouseCoopers LLP, on
Wednesday, September 17, 2025
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Paul DeNicola is a Principal, Matt DiGuiseppe is a Managing Director, and Ariel Smilowitz is a Director at the Governance Insights Center at PricewaterhouseCoopers (PwC). This post is based on their PwC memorandum.

Proxy season at a glance

The 2025 proxy season reflected a clear turning point for the investment stewardship of environmental, social and governance (ESG) initiatives. In contrast to the momentum of recent years, this season was characterized by more subdued investor engagement, a sharp decline in shareholder proposal activity and a continued focus on governance fundamentals. Regulatory shifts — particularly the SEC’s revised guidance on shareholder proposals and investor engagement — reshaped the landscape, giving companies more discretion while prompting investors to adjust their proxy voting policies and engagement strategies.

Overall, investors demonstrated strong support for incumbent directors and executive compensation, with average approval levels holding steady or rising. [1]

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What to Keep in Mind for Your Next Purchase Price Adjustment Provision

Posted by Frank Favia, Jonathan Dhanawade, and Andrew Stanger, Mayer Brown, on
Wednesday, September 17, 2025
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Frank Favia and Jonathan Dhanawade are Partners, and Andrew Stanger is Knowledge Counsel at Mayer Brown. This post is based on their Mayer Brown memorandum, and is part of the Delaware law series; links to other posts in the series are available here.

Deal parties often opt to delegate purchase price adjustment (“PPA”) disputes to an accounting expert in the belief that such private proceedings will avoid the involvement of courts and related expenses. A recent Delaware Chancery Court decision provides important guidance on commonly used accounting principles for post-closing PPA disputes and the interplay between PPA mechanisms and indemnification provisions. It also demonstrates that an expert determination of PPA disputes, as typically formulated in M&A agreements, can be subject to more court oversight than the parties might anticipate, adding considerable time and expense to the process. The court’s ruling underscores the importance of clear contractual drafting and careful navigation of post-closing dispute processes.

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Remarks by Commissioner Uyeda at the SIFMA’s Private Markets Valuation Roundtable

Posted by Mark T. Uyeda, U.S. Securities and Exchange Commission, on
Tuesday, September 16, 2025
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Mark T. Uyeda is a Commissioner of the U.S. Securities and Exchange Commission. This post is based on his recent remarks. The views expressed in the post are those of Commissioner Uyeda and do not necessarily reflect those of the Securities and Exchange Commission or the Staff.

Good morning, and thank you for convening this roundtable on private market valuation. My remarks reflect my views as an individual Commissioner and not necessarily the views of the full Commission or my fellow Commissioners.

Vibrant Private Capital Markets Promote Economic Growth

The private markets provide critical sources of capital to businesses and help further job creation and innovation. Whether in the form of equity or debt offerings, private markets have grown significantly over the past few decades. Indeed, there was $30.9 trillion managed by private funds alone in the fourth quarter of 2024, [1] a figure that excludes direct investments in privately held companies.

To those who argue that the growth of private markets has negatively impacted public markets, I note that economic growth and the capital markets is not a zero-sum game. Public markets benefit from vibrant private capital markets and vice versa. Private markets operate in an environment with more regulatory flexibility and freedom to contract, while public markets provide market participants with enhanced liquidity and access to retail capital that is unavailable elsewhere. From an issuer’s perspective, capital is not fungible, insofar as each pool of capital comes with its own benefits and constraints. Promoting capital formation in both markets enhances the overall economic environment, particularly as public markets provide exit and liquidity opportunities for private companies. [2]

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Proxy Season Global Briefing: Trends on Boards of Directors

Posted by Federica Soro, Kevin Gibb, and Matti Jaakkola, Glass Lewis, on
Tuesday, September 16, 2025
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Federica Soro is a Research Manager, Kevin Gibb is a Lead Analyst, and Matti Jaakkola is a Director of Research at Glass, Lewis & Co. This post is based on a Glass Lewis memorandum by Ms. Soro, Mr. Gibb, Mr. Jaakkola, Aaron Wendt, Alicja Bielawska, and Brianna Castro.

The board of directors is at the heart of corporate governance – and at the heart of ongoing debate around the basis for selecting directors, and what they should be tasked with overseeing.

Shareholder Vote Results: Director Elections and Opposition

Shareholder voting on board elections remained largely consistent in North America.

  • In our overall U.S. coverage, 72 director nominees failed to receive majority support (versus 69 last year, down from 93 in 2023). Director elections in the Russell 3000 index also remained largely consistent, with 33 failed director elections in 2025 compared to 39 in 2024.
    • Of these 72, only nine have left their boards thus far and three directors’ resignations have been rejected. The prevalence of plurality voting standards and resignation policies in the U.S. means that, generally, relatively few directors depart their boards after failing to receive majority support.
  • In Canada, 10 director nominees failed to receive majority support, continuing an upward trend (compared to nine in 2024, seven in 2023 and three in 2022).
    • Seven of these failed directors were concentrated to two boards: four at a TSX Venture Exchange-listed pharmaceuticals company and three at a TSX-listed mineral exploration company.

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