Yearly Archives: 2025

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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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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