Monthly Archives: March 2026

Sustainability Disclosures: A Complex Legal and Regulatory Environment for Boards of Directors

Posted by Kenneth J. Markowitz, Stacey H. Mitchell, and George O’Malley-Knowles, Akin Gump, on
Thursday, March 5, 2026
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Kenneth J. Markowitz and Stacey H. Mitchell are Partners and George O’Malley-Knowles is of Counsel at Akin Gump. This post is based on an Akin Gump memorandum by Mr. Markowitz, Ms. Mitchell, Mr. O’Malley-Knowles, Brecken Petty, Samantha Z. Purdy, and Jan Walter.

Executive Summary

  • As sustainability requirements increasingly become fragmented, boards should navigate divergent state, federal and international laws, regulations, policy frameworks and shareholder pressures that heighten operational, legal and political risks.
  • Climate Reporting & Disclosure Requirements. U.S. states like California and New York continue to seek to advance expansive climate reporting mandates despite federal pullbacks, while the EU, Middle East and other international jurisdictions tighten sustainability reporting and due diligence requirements.
  • ESG in the States. Companies face rising complexity as U.S. states adopt opposing pro- and anti-ESG laws that impact investment decisions, contracting eligibility and operational risk. Boards should monitor this patchwork of state level mandates, assess compliance gaps and prepare for rapid shifts in enforcement priorities driven by political change.
  • Greenwashing. Companies face mounting exposure to greenwashing claims, prompting boards to strengthen verification, assurance, carbon accounting and governance processes around sustainability disclosures and marketing statements.
  • Shareholder Activism. Activist proposals, proxy battles and derivative suits continue to pressure boards to demonstrate credible sustainability oversight and measurable progress toward stated sustainability commitments.
  • Contracts. Contracting practices increasingly embed sustainability requirements, requiring boards to consider supply chain diligence, compliance frameworks and the potential business risks associated with sustainability related contractual terms.

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Fiduciary Stewardship, Systemic Risk, and Democratic Authority: A Critique of the Paxton–Vanguard Settlement

Posted by Sarah Wilson, Minerva Analytics, on
Wednesday, March 4, 2026
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Sarah Wilson is the Founder and CEO of Minerva Analytics.

On February 26, 2026, the Texas Attorney General announced a $29.5 million settlement with Vanguard in multistate litigation alleging that major asset managers used stewardship and net‑zero initiatives to coordinate conduct among competing coal producers. Vanguard agreed to “strict passivity commitments” limiting its ability to influence corporate strategy or support environmental and social shareholder proposals, while denying wrongdoing and admitting no liability.

Whatever one’s views on ESG politics, the settlement raises a narrower and more consequential question: what happens when politically framed enforcement rhetoric and settlement leverage are used to recharacterize ordinary fiduciary risk governance as unlawful collusion, without adjudicated findings?

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Reframing Board Diversity Disclosure in 2026 Proxy Statements

Posted by Lillian Tsu, J.T. Ho, and Helena Grannis, Cleary Gottlieb Steen & Hamilton LLP, on
Wednesday, March 4, 2026
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Lillian Tsu, J.T. Ho, and Helena Grannis are Partners at Cleary Gottlieb Steen & Hamilton LLP. This post was prepared for the Forum by Ms. Tsu, Mr. Ho, Ms. Grannis, Shuangjun Wang, and Bobby Bee.

Board diversity disclosure is undergoing a meaningful recalibration. After years of increasing pressure by shareholders and other stakeholders to increase the number of women and underrepresented minorities on boards and provide robust disclosure of board demographic information, the framework is now shifting.  Following the U.S. Court of Appeals Fifth Circuit’s December 2024 decision to strike down the rule requiring Nasdaq-listed companies to include board diversity disclosure in their proxy statements, the Trump Administration’s targeting of DEI programs, and the related pullback from the major proxy advisory firms and institutional investors in their stewardship principles and voting guidelines, companies are now re-assessing how they define and describe the diversity of directors serving on their boards in their proxy statements.  While companies continue to emphasize that their boards include directors with diverse skills, backgrounds, experiences and viewpoints, proxy statement disclosure increasingly frames diversity in broader terms instead of focusing primarily on protected classes.

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AI and the Future of Proxy Research: How New Tools Are Reshaping Stewardship Workflows

Posted by Will Goodwin (Tumelo), on
Tuesday, March 3, 2026
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Will Goodwin is the Co-founder and Head of US Sales at Tumelo.

Introduction

Proxy voting has long been one of the most operationally demanding functions in asset management. A large institutional investor might vote on six thousand or more meetings in a single proxy season. Each meeting requires research, policy application, and a defensible rationale — produced under tight deadlines, often with limited resource. For most of the past two decades, the industry’s answer to this challenge has been outsourcing: delegating research to third-party proxy advisors whose benchmark recommendations could be applied at scale.

That model is now under significant pressure. The combination of rising expectations around fiduciary accountability, growing scrutiny of herding behaviour in institutional voting, and genuine advances in AI capability has prompted many stewardship teams to reconsider how much of the research and decision-making process should sit in-house. The recent announcement by JP Morgan that it is moving to an in-house AI platform for proxy advice reflects a broader industry shift that is likely to accelerate through 2026 and beyond. READ MORE »

Systematic Corruption

Posted by Reilly S. Steel (Columbia Law School), on
Tuesday, March 3, 2026
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Reilly S. Steel is an Associate Professor of Law at Columbia Law School. This post is based on his recent paper, forthcoming in the Columbia Law Review.

When we think about corruption in the corporate and political arenas, what often comes to mind are high-profile scandals involving bribery, kickbacks, or blatant misconduct. But in my paper Systematic Corruption (forthcoming in the Columbia Law Review), I argue that the deeper threat is structural: corruption not as isolated wrongdoing, but as an ongoing system of dependence built through state-conferred economic privilege.

At its core, systematic corruption is about how politicians use economic privileges—such as corporate charters, regulatory approvals, government contracts, and enforcement discretion—to build and sustain political coalitions. Unlike opportunistic corruption, which involves discrete quid pro quo exchanges for private gain, systematic corruption is rooted in the institutional design of political and economic power. By repeatedly rewarding political loyalty with economic benefits, governing coalitions can entrench themselves and ultimately suppress both political and economic competition. Systematic corruption is bad politics and bad economics.

A contemporary illustration comes from merger review. When antitrust enforcement becomes entangled with political loyalty—when firms perceive that favorable treatment may depend less on competition law and more on their alignment with the administration in power—merger review ceases to be a programmatic regulatory screen and instead becomes a partisan tool. Even absent explicit threats, the mere possibility that enforcement decisions hinge on political considerations can induce anticipatory compliance. Firms adjust their behavior, rhetoric, and affiliations to curry favor, helping to cement the dominant party’s hold on power. The danger is not simply uneven enforcement; it is the gradual transformation of a rule-bound process into a system of conditional privilege. READ MORE »

Chancery Interprets LLC Agreement as Not Eliminating Fiduciary Duties

Posted by Gail Weinstein, Philip Richter, and Steven Epstein, Fried, Frank, Harris, Shriver & Jacobson LLP, on
Tuesday, March 3, 2026
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Gail Weinstein is a Senior Counsel, Philip Richter is a Partner, and Steven Epstein is the Managing Partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Weinstein, Mr. Richter, Mr. Epstein, Steven J. Steinman, Randi Lally, and Erica Jaffe, and is part of the Delaware law series; links to other posts in the series are available here.

In Calumet Capital Partners LLC v. Victory Park Capital Advisors LLC (Jan. 29, 2026), the Delaware Court of Chancery, at the pleading stage of litigation, found it reasonably conceivable that, after Victory Park (the “Investor”) invested in Calumet’s lending business (the “Lender”), the Investor—“with and through” its employee, whom it had appointed to the Lender’s board of managers—engaged in a scheme to undermine the Lender and establish a competing lending business (“Bespoke Capital”). The court interpreted the Lender’s LLC Agreement as not having fully eliminated fiduciary duties for the managers; and found it reasonably inferable from the alleged facts that the Employee, by harming the Lender for the Investor’s benefit, had breached his fiduciary duties to the Lender, aided and abetted by the Investor.

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AI as a Performance Metric: What Companies Are Disclosing Now

Posted by Amit Batish, Equilar, Inc., on
Monday, March 2, 2026
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Amit Batish is Senior Director of Content & Communications at Equilar, Inc. This post is based on an Equilar memorandum by Mr. Batish and Andrew Gordon.

Over the last few years, the artificial intelligence (AI) boom has swept through corporate America. Across nearly every function and team, AI is being adopted to boost productivity and gain a competitive edge through every available avenue. As a result, employees, particularly executives, are increasingly expected to identify new ways to drive efficiency and improve results through AI-enabled strategies.

As compensation committees evaluate the performance goals used in executive pay programs, AI-focused performance objectives are becoming more common in incentive plan design. In this post, Equilar examines corporate disclosures that highlight how companies are implementing AI into executive compensation programs today.

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Business Concentration around the World: 1900-2020

Posted by Yueran Ma (University of Chicago), Mengdi Zhang (Northwestern University), and Kaspar Zimmermann (University of Hamburg), on
Monday, March 2, 2026
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Yueran Ma is the Carhart Family Professor of Finance at the University of Chicago Booth School of Business, Mengdi Zhang is a PhD student in Finance at Northwestern University, and Kaspar Zimmermann is a Professor of International Macroeconomics and Finance at the University of Hamburg. This post is based on their recent paper.

March 2026 marks the 250th anniversary of The Wealth of Nations. In that foundational text for modern economics, Adam Smith described a decentralized economy of small producers. Over the next two and a half centuries, however, the emergence of large firms began to shatter this blueprint of “atomistic” capitalism. Once upon a time, this shift motivated many observers to discuss and debate the span of control of the visible hand and the “centralization of capitals” (Marx, 1867; Marshall, 1890; Hayek, 1945; Galbraith, 1967; Chandler, 1977; Lucas, 1978). This evolution also inspired influential research on corporate governance (Berle and Means, 1932), which used high production concentration to emphasize that the separation of ownership and control in large corporations is consequential for society.

In the past few years, the rising dominance of large firms has returned to the forefront of economic and legal discourse. Recent discussions have had a particular focus on changes in the United States since around 1980, perhaps due to both greater data availability for this setting and our impression that this period has been rather eventful. An influential finding, based on the widely-used U.S. census dataset with comprehensive coverage over this period, shows that the largest firms account for an increasing share of output in many industries (Autor et al., 2020; Covarrubias, Gutiérrez, and Philippon, 2020). This rise of concentration is often viewed as an unusual development, and many studies have asked whether it results from shifts in technologies, trade, policies, or demographics.

In our new paper, “Business Concentration around the World: 1900–2020,” we assemble a new dataset to examine the rise of large firms through a wide lens, across both time and space. We uncover two sets of facts, which hold broadly over the past century among market-based advanced economies with available data. The foundation for these analyses is official statistics on the firm size distribution with long-run economy-wide coverage, which we have been able to find for ten countries across Asia, Europe, North America, and Oceania, in addition to the United States in our prior work (Kwon, Ma, and Zimmermann, 2024). We focus on market-based economies to study the “organic” evolution of the organization of production (in environments that approximate “Smithian” capitalism), which is not heavily influenced by government interventions. They are also the primary countries where we can find high quality long-run data.

Fact 1: A Century of Rising Concentration in Output and Capital READ MORE »

Delegating Enforceability: A Novel Solution to Corporate Forum Selection Disputes

Posted by Noah B. Yavitz (Ropes & Gray LLP) and Daniel B. Listwa (Wachtell, Lipton, Rosen & Katz), on
Monday, March 2, 2026
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Noah B. Yavitz is a Partner at Ropes & Gray LLP, and Daniel B. Listwa is an Associate at Wachtell, Lipton, Rosen & Katz. This post was submitted to the Forum and is part of the Delaware law series; links to other posts in the series are available here.

Since their introduction nearly two decades ago,[1] forum selection provisions have become standard in modern corporate governance, with Delaware corporations routinely designating the Court of Chancery as the exclusive forum for “internal affairs” disputes. Yet questions persist about the construction, scope, and enforceability of these provisions—questions that implicate important issues of Delaware corporate law but are often decided by courts outside Delaware.

Consider the recent California Supreme Court decision in EpicentRx, Inc. v. Superior Court, which reversed lower court rulings that had declined to enforce forum selection provisions in a corporation’s charter and bylaws on public policy grounds.[2] While ultimately holding that California’s jury trial policy did not bar enforcement, the court remanded for consideration of whether the provisions were “freely and voluntarily negotiated”—a Delaware law question that California courts must now address.[3]

Similar tensions arise with claims under federal securities laws. Forum selection provisions in charters and bylaws that channel derivative Section 14(a) proxy fraud claims to Chancery have generated particularly acute conflicts—the Ninth Circuit, in Lee v. Fisher, recently upheld such provisions, finding them consistent with both Delaware and federal law, while a divided panel of the Seventh Circuit concluded the opposite in Seafarers Pension Plan v. Bradway.[4]

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Texas Judge Strikes Down Anti-ESG “Boycott” Law

Posted by Mollie H. Duckworth, Betty M. Huber, and Austin J. Pierce, Latham & Watkins LLP, on
Sunday, March 1, 2026
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Mollie H. Duckworth and Betty M. Huber are Partners, and Austin J. Pierce is an Associate at Latham & Watkins. This post is based on their Latham & Watkins memorandum.

Key points

  • On February 4, 2026, the US District Court for the Western District of Texas declared SB 13 (2021) unconstitutional under the First and Fourteenth Amendments and enjoined its enforcement, finding the statute facially overbroad and impermissibly vague.
  • The ruling continues a trend of constitutional challenges against laws seeking to promote and/or constrain various ESG considerations.

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