Yearly Archives: 2025

Nevada Amends Corporate Law to Attract Incorporations

Posted by David Bell, Ran Ben-Tzur, and Dean Kristy, Fenwick & West LLP, on
Wednesday, June 4, 2025
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David Bell, Ran Ben-Tzur, and Dean Kristy are Partners at Fenwick & West LLP. This post is based on a Fenwick memorandum by Mr. Bell, Mr. Ben-Tzur, Mr. Kristy, and Wendy Grasso.

What You Need To Know

  • Nevada’s legislature recently adopted Assembly Bill No. 239, which provides for significant amendments to the Nevada Revised Statutes governing Nevada corporations. The amendments have been delivered to the Governor for signature.
  • The amendments would, among other things, clarify the fiduciary duties of controlling stockholders, allow corporations to waive jury trials in their articles of incorporation, and permit certain holding company reorganizations.

Not to be outdone by Delaware and Texas, the Nevada Senate voted unanimously on May 21, 2025, to adopt Assembly Bill No. 239 (AB 239), which provides for significant amendments to the Nevada Revised Statutes (NRS) governing Nevada corporations. The legislation was initially proposed by the State Bar of Nevada’s Executive Committee, Business Law Section, which also prepared a memorandum summarizing the changes.

The memorandum explains that the proposed amendments are intended to provide greater clarity and to respond to practice considerations, requests/comments from other attorneys, and other business law developments in other states (presumably Delaware and Texas). While the memorandum does not address the corporate amendments just adopted in Texas, it does reference the existing corporate laws in Delaware, including recently adopted amendments to the Delaware General Corporation Law (DGCL)—making clear that the proposed changes are an attempt to appeal to corporations and challenge Delaware’s status as the preferred state for incorporation.

Key changes proposed by AB 239 are summarized below.

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Streamlining Sustainability Reporting: Survey Reveals Top Priorities for Corporates

Posted by Subodh Mishra, ISS STOXX, on
Tuesday, June 3, 2025
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Subodh Mishra is Global Head of Communications at ISS STOXX. This post is based on an ISS-Corporate memorandum by Kosmas Papadopoulos, Executive Director & Head of Sustainability Advisory for the Americas at ISS-Corporate.

Sustainability reporting has become widespread and increasingly complex, as corporate issuers manage stakeholder expectations, regulatory mandates, and alignment with multiple reporting frameworks. As they strive to meet these needs, sustainability reporting teams seek ways to standardize and streamline their approach, ensuring efficiency in data gathering, relevance, accuracy and traceability of sustainability information shared with stakeholders. Software solutions have emerged to address these needs, assisting organizations with data collection, data analysis, and alignment with reporting standards and frameworks.

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The Value of Privacy and the Choice of Limited Partners by Venture Capitalists

Posted by Rustam Abuzov (University of Virginia), Will Gornall (University of British Columbia), and Ilya A. Strebulaev (Stanford University), on
Tuesday, June 3, 2025
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Rustam Abuzov is an Assistant Professor of Finance at the Darden School of Business, University of Virginia, Will Gornall is an Associate Professor of Finance at UBC Sauder School of Business, and Ilya A. Strebulaev is The David S. Lobel Professor of Private Equity and Professor of Finance at Stanford Graduate School of Business. This post is based on their recent article forthcoming in the Journal of Financial Economics.

Many venture capitalists view confidentiality as a core competitive advantage when investing in high-growth companies. They guard not only the sensitive information they obtain from startups, but also the prices they pay, the structure of their deals, and the proprietary strategies they use to find and evaluate investments. In our recent paper, The Value of Privacy and the Choice of Limited Partners by Venture Capitalists, we show that disclosure requirements influence not only how VCs invest, but also which investors they are willing to accept capital from.

Public pension funds and university endowments have historically been among the most important limited partners (LPs) in VC funds, accounting for roughly one-third of reported capital commitments. However, beginning in late 2002, these public LPs faced a major shift in disclosure obligations driven by state-level Freedom of Information Acts (FOIAs). These laws require public institutions to disclose many types of records upon request, although VC data was historically treated as a trade secret and thus exempt from disclosure. That changed with a pivotal court ruling that forced public LPs to release fund-level performance data and raised the prospect of broader disclosure of sensitive portfolio company information. We refer to this change in public LP disclosure requirements as the FOIA shock.

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What DOJ’s New Enforcement Plan Means for Health Care Companies

Posted by Joshua Levy and Laura Hoey, Ropes & Gray LLP, on
Tuesday, June 3, 2025
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Joshua Levy and Laura Hoey are Partners at Ropes & Gray LLP. This post is based on a Ropes & Gray memorandum by Mr. Levy, Ms. Hoey, Jaime Orloff Feeney, and Nathalia Sosa.

On May 12, 2025, the Head of the US Department of Justice’s Criminal Division, Matthew R. Galeotti (“Galeotti”), announced DOJ’s first ever White-Collar Enforcement Plan (the “Plan”), which directs prosecutors to: (1) focus on certain priority areas, including several areas directly impacting the health care and life sciences industries, as noted below; (2) conduct white-collar investigations in fairness by incentivizing good corporate conduct and voluntary self-disclosure; and (3) boost efficiency by reducing the duration of corporate investigations and charging decisions. The Plan also introduces revisions to existing DOJ white-collar and corporate enforcement policies. We previously summarized these significant policy changes in our May 15 Alert.

While overall the Plan reflects a somewhat more measured approach to corporate criminal enforcement, investigating and prosecuting health care fraud clearly remains a priority for the Trump administration. Health care and life sciences companies will continue to be under the microscope and should be aware that:

  • Investigation and prosecution of health care violations dominate the enforcement list for Criminal and Civil DOJ.
  • DOJ has expanded the types of reports eligible under its Corporate Whistleblower Awards Pilot Program (“DOJ Whistleblower Program”) to include information of potential violations involving public health care benefit programs.
  • DOJ has signaled a reduced reliance on corporate compliance monitors in criminal resolutions; however, health care and life sciences companies may still be subject to compliance monitoring and reporting requirements imposed by the Office of the Inspector General for the US Department of Health and Human Services (“HHS-OIG”) or other regulators, such as state attorneys general.

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More and Better Options: Strengthening Long-Term CEO Succession Planning

Posted by Rusty O’Kelley and Rich Fields, Russell Reynolds Associates, on
Monday, June 2, 2025
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Rusty O’Kelley is a Managing Director, and Rich Fields is the Head of Board Effectiveness Practice at Russell Reynolds Associates. This post is based on a Russell Reynolds memorandum by Mr. O’Kelley, Mr. Fields, Margot McShane, Dean Stamoulis, and Joy Tan.

CEO succession is a board’s most important responsibility. This is especially true today, as companies face a range of intense pressures, the reality of decreasing leadership preparedness across a wide range of rapidly-evolving business challenges, record CEO turnover, and nuanced governance trends—such as an anticipated increase of shareholder activism (particularly in the United States) and a new push-and-pull dynamic between board and management.

To ensure resilience in this quickly evolving business landscape, boards need to strengthen their processes to develop long-term CEO succession pipelines. This requires integrating more meaningful options into the succession process. Increasing optionality for top leadership roles is critical, as it allows the board flexibility in decision-making and risk mitigation, making agile, informed choices. Exploring different talent strategies and pathways will also allow boards to enhance value creation, as they will have increased options to achieve desired business results.

Russell Reynold’s 2025 Global Board Culture and Director Behavior study identifies three noteworthy barriers that prevent boards from creating meaningful optionality in CEO succession pipelines.

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The Singular Role of Public Pension Funds in Corporate Governance

Posted by Jill E. Fisch (University of Pennsylvania) and Jeff Schwartz (University of Utah), on
Monday, June 2, 2025
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Jill E. Fisch is the Saul A. Fox Distinguished Professor of Business Law at the University of Pennsylvania Carey Law School, and Jeff Schwartz is the Hugh B. Brown Presidential Professor of Law at the University of Utah S.J. Quinney College of Law. This post is based on his recent article, forthcoming in the Texas Law Review.

Among institutional investors, public pension funds hold a uniquely public and potent position. With over $5 trillion in assets under management, these funds influence corporate governance, ESG initiatives, and economic development far beyond their nominal mandate of managing the retirement money of public employees. Yet, the prevailing legal and policy framework is anchored in a doctrine that we term “beneficiary primacy,” which posits that fund managers must act solely in the economic interest of pension beneficiaries. In our article, forthcoming in the Texas Law Review,  we argue that beneficiary primacy fails to capture the singular structure and role of public pension funds and subjects them unduly to litigation risk. Instead, our article proposes a fundamental reconceptualization: public pension funds should be understood not as intermediaries whose managers are fiduciary-bound to serve passive beneficiaries, but as principals imbued with public values and run in accordance with those values.

We start with an overview of the structure, investment policies, and governance initiatives of four major public pension funds. What stands out from this overview and distinguishes public pension funds, in part, from their investment fund peers, is that public pensions are publicly accountable government agencies. State laws, legislatures, and boards elected by diverse constituencies drive decision-making. We also briefly recount the history of public pension fund engagement in corporate governance. As we explain, public pension funds have played a paradigm shifting role–pioneering socially responsible investing, serving as catalysts for governance changes that have increased management accountability through greater shareholder empowerment, and spearheading the drive to make corporations more sustainable.

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A Playbook for Unplanned CEO Transitions

Posted by David A. Katz, and Laura A. McIntosh, Wachtell, Lipton, Rosen & Katz, on
Monday, June 2, 2025
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David A. Katz is a Partner and Laura A. McIntosh is a Consulting Attorney at Wachtell, Lipton, Rosen & Katz. This post is based on their article first published in the New York Law Journal.

While boards of directors routinely engage in succession planning for the company’s chief executive, fewer have planned for a scenario in which the CEO dies, unexpectedly departs, or is temporarily or permanently incapacitated.  If a board takes the time in advance to think through key issues, resolve some threshold questions for how an emergency CEO transition would be managed, and request that management consider the filings and scripts that would be necessary, the company will be far better prepared to handle such a crisis should it occur.  Having a fully developed playbook, with protocols and documents ready to take off the shelf at a moment’s notice, can mean the difference between a full-blown crisis and a manageable situation.

Creating this playbook is likely to require uncomfortable conversations among board members and the chief executive.  No matter how young, healthy, and seemingly invincible a CEO may be, anything can happen at any time.  There have been high-profile examples of chief executives who have suffered accidents or medical issues that have temporarily incapacitated them, and others who have experienced professional or personal crises that have necessitated immediate resignation or replacement.  While no one will enjoy contemplating the potential misfortunes that may befall the company’s leader, an emergency scenario is likely to resolve in a manner more advantageous to the enterprise if it can be handled with the benefits of forethought and advance planning.  Involving a public relations/investor relations firm that specializes in crisis management can make it easier for the board to consider these difficult issues.
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Making Sure Newly Cautious Shareholders Get the Information They Want

Posted by Brian V. Breheny, Raquel Fox, and Joshua Shainess, Skadden, Arps, Slate, Meagher & Flom LLP, on
Sunday, June 1, 2025
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Brian V. Breheny and Raquel Fox are Partners and Joshua Shainess is an Assoicate at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden memorandum by Mr. Breheny, Ms. Fox, Mr. Shainess, and Kyle Wiley.

Key Points

  • Revised guidance from the SEC regarding ownership reporting is making institutional investors circumspect about raising issues with management.
  • Seeking to influence a company’s executive compensation, or its social, environmental or political policies, may disqualify a shareholder from filing short-form ownership reports.
  • Companies need to respond proactively, anticipating major investors’ issues and information they want but may be reluctant to ask for.

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Chancery Court Dismisses Challenge to Removal of Tag-Along Rights in Healthcare Merger

Posted by Frank J. Favia Jr. and Jonathan A. Dhanawade, Mayer Brown LLP, on
Saturday, May 31, 2025
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Frank J. Favia Jr. and Jonathan A. Dhanawade are Partners at Mayer Brown LLP. 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.

A recent Delaware Chancery Court decision provides important guidance for private equity sponsors, minority investors, and deal professionals regarding the enforceability of contractual waivers and the limits of the implied covenant of good faith and fair dealing in LLC agreements. The court’s ruling underscores the primacy of contract terms in LLC governance, and the limited role of equitable doctrines where fiduciary duties have been expressly disclaimed.

Khan, et al. v. Warburg Pincus, LLC, et al. [1] involved the merger of an urgent care provider and a primary care provider. The urgent care provider, a limited liability company, was majority owned by a private equity sponsor. As explained in more detail below, after the closing, the urgent care provider’s minority unitholders challenged the elimination of their tag-along rights and the allocation of merger consideration. READ MORE »

Investor Views on AI Oversight: What Do Proxy Votes Tell Us?

Posted by Lindsey Stewart and River Meng, Morningstar, Inc., on
Friday, May 30, 2025
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Lindsey Stewart is Director of Investment Stewardship Research and River Meng is a Financial Product Specialist at Morningstar, Inc. This post is based on their Morningstar memorandum.

Key Observations

  • This research paper examines 15 recent shareholder resolutions at US companies addressing oversight and transparency over the use of artificial intelligence.
  • On average, shareholder support for resolutions on AI has exceeded support for proposals on other environmental and social themes.
  • Average adjusted support for the 15 resolutions on AI is 30%, almost double the support for the 400 E&S resolutions in the 2024 proxy year (16%). The seven significant resolutions also achieved higher average support than 107 significant E&S proposals in 2024.
  • Twelve of the 15 resolutions were filed at just five Big Tech companies: Alphabet, Amazon, Apple, Meta Platforms and Microsoft. Chipotle Mexican Grill, Netflix and Warner Bros. Discovery also featured.
  • The four most successful resolutions on AI targeted the same two issues (misinformation and disinformation, and AI-driven targeted advertising) at two companies: Meta Platforms and Alphabet.
  • As with E&S themes more generally, US and European asset managers are taking very different approaches to voting on resolutions addressing AI.
  • Average support for AI resolutions among the 20 US asset managers we reviewed was 30% – less than half the 77% observed for 15 European peers. The gap for significant resolutions is narrower.
  • In the US, BlackRock supported only one of the 15 proposals (7%), State Street and Vanguard did not support any. Fidelity, MFS, and Principal were the strongest US supporters of AI proposals (all 70%+).
  • In Europe, Allianz GI, Amundi, Candriam, and Nordea supported all 15 resolutions. The lowest level of support by a European asset manager was 43%

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