Monthly Archives: September 2025

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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Matteo Tonello is the Head of Benchmarking and Analytics at The Conference Board, Inc. This post is based on a Conference Board/ESGAUGE report by Ariane Marchis-Mouren, Senior Researcher, Governance & Sustainability Center, The Conference Board. The report was developed in partnership with Russell Reynolds Associates and the Rutgers Law School Center for Corporate Law and Governance.

With the 2025 proxy season marked by fewer proposals, heightened scrutiny, and more selective investor support than previous years, this report shares guidance on how companies can approach offseason engagement with investors and prepare for the 2026 proxy season.

Trusted Insights for What’s Ahead®

  • A drop in shareholder proposal volume was most pronounced across environmental, social, and human capital management topics, reflecting both reduced filing activity and investor fatigue with repetitive or prescriptive proposals.
  • Companies filed a record number of Securities and Exchange Commission (SEC) noaction requests, leveraging new SEC guidance (Staff Legal Bulletin 14M, SLB 14M) to challenge proposals—particularly those viewed as micromanaging or lacking relevance.
  • Institutional investor engagement was affected by new SEC guidance issued in February 2025, which introduced uncertainty around Schedule 13G eligibility. Some investors temporarily paused or narrowed the scope of engagement, shaping a more cautious, issuer-led dialogue environment heading into the 2026 proxy season.
  • Average support for say-on-pay held steady but more companies fell into the “watch list” zone (below 90%), signaling increasing investor scrutiny of pay practices—even when proposals technically passed.
  • Companies can consider proactively enhancing proxy disclosures and engagement documentation—especially around proposal negotiations and investor feedback—to maintain investor confidence and limit voting surprises in 2026.

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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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Kai Li is a Professor and the Canada Research Chair in Corporate Governance at the University of British Columbia. This post is based on a paper forthcoming in Management Science by Professor Li, Feng Mai, Associate Professor at the University of Iowa, Tengfei Zhang, Assistant Professor at Rutgers University, Gabriel Wong, and Chelsea Yang.

As a key capital market intermediary, sell-side equity analysts are known for their information  discovery and production roles. Equity analysts also play an important monitoring role in scrutinizing management behavior. Yet none of the existing governance research has taken a gender lens to explore the role of female analysts in monitoring corporate environmental and social (E&S) performance.

Motivated by survey evidence indicating that women, compared to men, tend to place greater emphasis on the well-being of others, their communities, and the environment, in a paper titled “Female Equity Analysts and Corporate Environmental and Social Performance,” Management Science forthcoming, we examine whether female equity analysts are more likely to monitor a firm’s environmental and social (E&S) practices than their male counterparts and whether there are gender differences in their equity research approaches, thus shedding light on the origins of gender differences in skills within the equity analyst profession.

To investigate whether and how female analyst coverage influences corporate E&S performance, we first hand collect the gender information of equity analysts in the U.S. based on their online bio. We also make use of textual data that cover analyst research activities in the form of analyst research reports and analysts asking questions during earnings conference calls, and apply machine learning to those textual datasets to capture gender differences in their research approaches.

Our empirical investigation proceeds in three steps.  First, we show that there is a positive and significant association between the number of female analysts covering a firm and that firm’s E&S performance. For identification, we exploit broker closures as a quasi-exogenous shock to female (male) analyst coverage and show that following such an event, firms losing female analysts experience significant declines in E&S ratings relative to firms losing male analysts, suggesting a causal impact. READ MORE »

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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Brad Goldberg and Beth Sasfai are Partners, and Michael Mencher is Special Counsel at Cooley LLP. This post is based on a Cooley memorandum by Mr. Goldberg, Ms. Sasfai, Mr. Mencher, Reid Hooper, Justin Kisner, and Stephanie Gambino.

The 2025 proxy season marked a turning point in the Securities and Exchange Commission’s (SEC) administration of shareholder proposals. Over the course of the season, the staff of the Division of Corporation Finance (staff) received a significant increase in no-action requests under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (Rule 14a-8), granted relief to nearly 70% of requests and, under newly issued Staff Legal Bulletin 14M (SLB 14M), rescinded perceived proponent-friendly guidance in place since 2021. The guidance issued in SLB 14M reverses approximately four years of staff guidance and no-action letter precedent, which had effectively changed how the staff reviewed and analyzed whether shareholder proposals were eligible for exclusion from proxy materials under Rule 14a-8. Although the staff began applying the principles of SLB 14M during the 2025 proxy season, the true impact of SLB 14M and how it will shape future proxy seasons is largely unknown. The 2025 proxy season has provided a preview of what might be on the horizon, but many uncertainties remain about how the staff will apply SLB 14M, especially now that it has had more time to evaluate its application to various arguments for exclusion of shareholder proposals under Rule 14a-8.

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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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Ken D. Kumayama, Sonia K. Nijjar, and Jenness E. Parker are Partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on their Skadden memorandum.

Key Points

  • Directors who use AI on their own for corporate purposes need to be aware of some pitfalls particular to their roles.
  • Sharing confidential corporate information with chatbots should be avoided until it has been confirmed that the AI model will not train on the material or make it available to chatbot employees.
  • AI chats may be discoverable by regulators or litigation adversaries, potentially disclosing information that could be used against the company’s interests.
  • Using AI recording and transcription tools also could reveal confidential corporate information, or render the information vulnerable to disclosure from discovery or similar requests.

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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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Craig E. Carroll is the Executive Director of the Observatory on Corporate Reputation.

Introduction

Corporate disclosures are now scrutinized not only for accuracy but also for coherence. Increasingly, regulators, investors, and stakeholders view narrative contradictions—statements that are individually accurate yet collectively conflicting—as a governance failure. These contradictions are not typically the product of dishonesty. Instead, they emerge from organizational complexity, shifting priorities, and fragmented accountability. Yet their impact is no less significant: contradictions create regulatory exposure, invite investor skepticism, confuse internal decision-makers, and erode trust in corporate leadership.

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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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Dan Scorpio and Sheila Ennis are Managing Directors at H/Advisors Abernathy. This post is based on their H/Advisors Abernathy memorandum.

The 2025 proxy season was as volatile as any in recent memory. Activity was robust at the beginning of the year, slowed considerably after the April 2 tariff announcement, and was interrupted by surprise changes proposed by the SEC regarding investor engagement practices that prompted institutional investors to reassess their engagement strategies. According to FactSet, the number of campaigns launched by activist shareholders remained relatively consistent with the market’s 10-year average, but the tone and tenor of the campaigns was quite chaotic. Ultimately, the number of Board seats obtained by activists exceeded last year’s total, including an increase in Board seats activists won in proxy fights that went to a vote. Engagement dynamics are changing.

Looking ahead, we believe that conditions are in place for activists to be even more active in next year’s proxy season, starting with heightened offseason approaches and engagement in the second half of 2025. Investors and issuers are settling on how to manage the SEC’s new 13D/G guidelines. The M&A freeze is showing signs of thawing. Consequences from changing tariff policies are better understood and addressed in corporate strategic plans.

To effectively navigate this new era, management teams and Boards should prepare now so they are ready to mount an effective defense if targeted. This should include realistic assessment of vulnerabilities, creative approaches to offseason engagement, better use of the proxy and proactive use of owned channels and digital strategies so your message is delivered unfiltered. Managements must actively address vulnerabilities and any gaps in investor perception of strategy, operations or execution. It has never been more important to ensure investors and all stakeholders clearly understand strategy, metrics and long-term goals.

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Weekly Roundup: September 5-11, 2025

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, September 12, 2025

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This roundup contains a collection of the posts published on the Forum during the week of September 5-11, 2025

Redefining the Role: How Innovative Corporate Investigations Leaders Drive Impact

Posted by Jon Mehta (Johnson & Johnson), Kate Driscoll (Morrison Foerster LLP), and Chen Zhu (Morrison Foerster LLP), on Friday, September 5, 2025
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Best Practices for Corporate Sustainability Teams

Posted by Matteo Tonello, The Conference Board, Inc., on Saturday, September 6, 2025
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US and EU Agree on Trade Framework Agreement – Implications for ESG/CSR Compliance

Posted by Michael Littenberg, Marc Rotter, and Samantha Elliott, Ropes & Gray LLP, on Sunday, September 7, 2025
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Being Prepared for the Next Crisis: The Board’s Role

Posted by Ray Garcia, Brian Schwartz, and David Stainback, PricewaterhouseCoopers LLP, on Monday, September 8, 2025
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Rebalancing Retirement: How 401(k) Plans Exacerbate Inequality and What We Can Do About It

Posted by Quinn Curtis (University of Virginia School of Law), Leo E. Strine, Jr. (University of Pennsylvania Carey Law School), and David H. Webber (Boston University School of Law), on Monday, September 8, 2025
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How Remote Meetings Are Reshaping Boardroom Expectations

Posted by Abby White, Rahim Miah, and Giovanna Laurence, Nasdaq, on Monday, September 8, 2025
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Governance Matters: Don’t Overlook Board Oversight

Posted by Bob Herr and Cem Inal, AllianceBernstein, on Tuesday, September 9, 2025
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How Three Years of the SEC’s Universal Proxy Card Have Changed Proxy Contests

Posted by Eric S. Goodwin, Kai H.E. Liekefett, and Derek Zaba, Sidley Austin LLP, on Tuesday, September 9, 2025
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Do Shareholders Have a Say on Say-on-Pay?

Posted by Allison Wyderka and Wickham Egan, Egan-Jones Ratings Company, on Wednesday, September 10, 2025
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Dealing with Activist Hedge Funds and Other Activist Investors

Posted by Martin Lipton, Wachtell, Lipton, Rosen & Katz, on Wednesday, September 10, 2025
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Mastering Boardroom Communication: Five Essentials for Executives

Posted by Paul DeNicola and Claudia Montgomery, PricewaterhouseCoopers, on Thursday, September 11, 2025
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From Common Practice to Differentiated Design: Turning Stock Prices into Performance Prizes in the S&P 500

Posted by Ryan Colucci, Compensation Advisory Partners, on Thursday, September 11, 2025
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From Common Practice to Differentiated Design: Turning Stock Prices into Performance Prizes in the S&P 500

Posted by Ryan Colucci, Compensation Advisory Partners, on
Thursday, September 11, 2025
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Ryan Colucci is a Principal at Compensation Advisory Partners. This post is based on his CAP memorandum.

Relative Total Shareholder Return (rTSR) continues to dominate the long-term incentive landscape for S&P 500 CEOs, appearing in 58% of performance share unit (PSU) awards. Its appeal lies in its perceived objectivity since it does not rely on financial targets established internally, its ability to create a clear link between shareholder experience and executive payouts, and the ease of communication to investors and proxy advisory firms.

Yet rTSR’s simplicity can be deceptive. While it measures stock price appreciation plus dividends relative to a benchmark, results can be heavily influenced by broader market forces, interest rate shifts, or sector cycles. As a result, companies face two fundamental questions when choosing to implement rTSR into their long-term incentive plans: (1) What design choices will best reflect the company’s performance philosophy? And (2) How much weight should rTSR carry in the plan?

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Mastering Boardroom Communication: Five Essentials for Executives

Posted by Paul DeNicola and Claudia Montgomery, PricewaterhouseCoopers, on
Thursday, September 11, 2025
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Paul DeNicola is a Principal, and Claudia Montgomery is a Managing Director at PricewaterhouseCoopers LLP. This post is based on their PwC memorandum.

Introduction

Executive–board interactions impact leadership and business success
Whether you are an executive who has been meeting with the board regularly for years or are in a new role that’s landing you on the agenda, your interactions with directors play a huge role in establishing your professional credibility with the board. Your pre-read materials, presentation style, executive presence and management of key relationships will impact how directors view not only you but your entire business function. Board meetings are your opportunity to highlight issues core to the business and to demonstrate your value. The right preparation can help you make an impact.

Preparation requires precision and focus
Today’s environment is marked by continued disruption, from geopolitical instability and rapid tech evolution to regulatory shifts and rising stakeholder scrutiny. Business challenges are more interconnected than ever, placing pressure on boards to provide not just oversight but meaningful guidance. With limited time and more ground to cover, executives must deliver crisp, tailored reporting to help boards focus on what matters. Knowing the board’s priorities and presenting with clarity not only supports decision-making but sets you apart as a leader.

Board time is limited — make it count
As board oversight responsibilities expand to include areas such as AI, talent and geopolitics, time remains a limited resource. Directors want strategic, focused discussions, not lengthy operational updates. In fact, 74% of directors report wanting more time spent on strategy, reinforcing the need for executives to bring high-impact content to the table. [1] New AI tools can help executives more quickly analyze data, model scenarios and surface insights, enabling smarter preparation and more impactful conversations. While these tools require human oversight for accuracy, relevance and sound judgement, technology can help to optimize the board’s time. Transparent, consistent communication and anticipating what matters most to directors are key to strengthening relationships, establishing leadership credibility and building trust with the board.

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Dealing with Activist Hedge Funds and Other Activist Investors

Posted by Martin Lipton, Wachtell, Lipton, Rosen & Katz, on
Wednesday, September 10, 2025
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Martin Lipton is a Founding Partner at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum, Loren Braswell, and Anna Dimitrijević.

Shareholder activism activity has continued at elevated levels in 2025, with activists undeterred by economic and geopolitical uncertainty. Regardless of industry, size or performance, no company is too large, too popular, too new or too successful to consider itself immune from activism. Although poor stock price performance and operational and strategic missteps can increase vulnerability, even companies that are respected industry leaders and have outperformed the market and their peers have been and are being targeted by activists.

In addition to campaigns from a single activist, companies are susceptible to attacks from multiple activists at once, whether from a “wolf pack” of activist funds acting together or independent activists “swarming” the company at the same time. Activists are also increasingly prone to waging multi-year campaigns, for example at companies with classified boards of directors or at companies where their campaigns were only partially successful. Even companies that have effectively fended off activism may still find themselves targeted by the same or a different activist in subsequent years. These trends, and the increasing willingness of activists to approach a company not only in the lead-up to a company’s nomination deadline and annual meeting proxy, but even shortly after the annual meeting date, contribute to a sense that there is no longer an “offseason” for activism.

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