Monthly Archives: September 2026

DOJ Withdraws 1987 ISS Business Review Letter, Thereby Signaling Continued Proxy-Advisor Scrutiny

Posted by Megan Gerking, Joe Folio, and Natalie George, Morrison & Foerster LLP, on
Tuesday, September 8, 2026
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Megan Gerking and Joe Folio are Partners and Natalie George is an Associate at Morrison & Foerster LLP. This post is based on a MoFo memorandum by Ms. Gerking, Mr. Folio, Ms. George, Diane R. Hazel, and Haydn Forrest, all at MoFo.

Amidst growing federal and state scrutiny of proxy advisory firms, the U.S. Department of Justice’s Antitrust Division (the “Division”) recently entered the fray. On August 5, 2026, the Division withdrew its 1987 business review letter (the “Letter”) to proxy advisory firm Institutional Shareholder Services Inc. (ISS), stating that the Letter no longer reflects ISS’s current business practices and citing concerns about concentration among proxy advisors.

The Division’s decision to withdraw the Letter is not an enforcement action or a finding that ISS violated the antitrust laws. In fact, the Division emphasized that proxy advising is not inherently problematic and that voting based on a proxy advisor’s recommendation does not by itself raise competition concerns. However, the Division’s decision signals that proxy advisors like ISS, and perhaps the broader asset management industry, may face increased scrutiny, especially during next year’s proxy season.

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SEC Issues New Guidance Clarifying Ability of Schedule 13G Filers to Engage with Other Investors and Issuers

Posted by Andrew Freedman, Kenneth S. Mantel, and Andrew J. Astore, Olshan Frome Wolosky LLP, on
Monday, September 7, 2026
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Andrew Freedman is a Co-Managing Partner, Kenneth S. Mantel is a Partner, and Andrew J. Astore is an Associate at Olshan Frome Wolosky LLP. This post is based on their Olshan memorandum.

On September 2, 2026, the U.S. Securities and Exchange Commission (the “SEC”) issued new Corporation Finance Interpretations (“CFIs”) in Q&A format regarding how Schedule 13G filers can engage with other investors and issuers without jeopardizing their Schedule 13G eligibility. These CFIs address beneficial owners of more than five percent of an issuer’s equity securities that are required to file on Schedule 13D or 13G and who, among other things, do not hold the securities with the purpose or effect of changing or influencing the control of the issuer. The new guidance supplements earlier CFIs from February 2025 that broadly chilled engagement of both dissident investors and issuers with significant passive shareholders, thereby decreasing investor and issuer visibility into their views.

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Boeing Decision Appears to Narrow Potential Caremark Liability for Directors and Officers

Posted by Gail Weinstein, Philip Richter, and Steve Epstein, Fried, Frank, Harris, Shriver & Jacobson LLP, on
Sunday, September 6, 2026
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Gail Weinstein is a Senior Counsel, Philip Richter is a Partner and Co-Head of the M&A and Private Equity Practice, 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, Maxwell Yim, Adam Cohen, and Colum Weiden, all at Fried Frank, and is part of the Delaware Law Series; links to other posts in the series are available here.

In In re Boeing (Aug. 14, 2026), the Delaware Court of Chancery, at the pleading stage of litigation, dismissed Caremark claims brought against directors and officers of The Boeing Company (the “Company”) after alleged manufacturing process defects led to a dramatic, mid-flight mechanical failure of a Boeing airplane, which followed two earlier catastrophic accidents due to alleged manufacturing defects in Boeing airplanes. The allegations included years-long, ongoing violations by the Company of manufacturing safety laws and regulations.

In two separate incidents in 2018 and 2019, a Boeing MAX 737 airplane crashed in mid-flight—resulting in hundreds of lives lost; the Company paying billions of dollars in fines and settlements; and the Company committing to regulators, the U.S. Department of Justice and stockholders to revamp its safety systems and culture. The recent incident occurred in 2024—when a Boeing MAX-9 737 airplane reached 15,000 feet, the mid-cabin door plug flew off, leaving a gaping hole in the airplane. The airplane made a safe emergency landing, and eight people sustained minor injuries. The Plaintiffs sued, claiming that Company directors and officers breached their oversight duties under Caremark by having ignored in bad faith numerous “red flags” of the Company’s continued airplane manufacturing safety issues. The court dismissed the case, holding that the Defendants did not face a substantial likelihood of liability under Caremark, and therefore demand on the Company’s board of directors (the “Board”) to bring the derivative lawsuit was not excused.

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SEC Comment Letter Review Signals Investor Support for Preserving Executive Compensation and Governance Disclosure Requirements

Posted by Mike Kesner and Annie Chen, Pay Governance LLC, on
Saturday, September 5, 2026
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Mike Kesner is a Partner and Annie Chen is a Consultant at Pay Governance LLC. This post is based on their Pay Governance memorandum.

KEY TAKEAWAYS

1. Large institutional investors have not directly weighed in  The largest asset managers have not directly commented on the proposal; an association of these investors indicated support for reform, while suggesting many disclosures remain. 2. Broad rollbacks face resistance
The most consistent message was opposition to $2B NAF status, exemption of 80%+ of issuers, and a blanket five-year IPO on ramp.		 3. Investor respondents value transparency
Investor respondents continue to use CD&A, Say-on-Pay, perquisite disclosure, and auditor attestation for governance and voting decisions.		 4. Reform should focus on usability
Commenters supported better dashboards, standardization, XBRL tagging, improved visuals, clearer metrics, and comparability.

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2026 Proxy Season: Trending Proposal Topics

Posted by Zally Ahmadi, D.F. King, on
Friday, September 4, 2026
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Zally Ahmadi is a Managing Director, Governance Advisory at D.F. King. This post is based on her D.F. King memorandum.

This post is the second part of D.F. King’s 2026 Proxy Season debriefing report. See here the first part on Shareholder Proposals.

‘Anti-ESG’ Proposals

This year, the ‘anti-ESG’ movement remained a fixture in the shareholder proposal space, remaining in the upper half of our ‘top proposals’ lists. However, the number of proposals decreased meaningfully and average support levels for these proposals remain in the single digits.

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Weekly Roundup: August 28-September 3, 2026

Posted by the Harvard Law School Forum on Corporate Governance, on
Friday, September 4, 2026

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This roundup contains a collection of the posts published on the Forum during the week of August 28-September 3, 2026

Director Compensation Is Up, But Not For Leadership Roles

Posted by Matthew Vnuk, Kyle White, and Cedrick Jean-Louis, Compensation Advisory Partners, on Friday, August 28, 2026
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Comment Letter on the SEC’s Proposal to Modify Emerging Growth Company Accommodations and Filer Status Classifications

Posted by Maureen McNichols (Stanford GSB) and Joe Schroeder (University of Indiana), on Saturday, August 29, 2026
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Securities Class Action Trends: AI Filings Surge, Alleged Losses and Settlement Values Climb

Posted by Tijana Brien, Brett De Jarnette, and Brian French, Cooley LLP, on Sunday, August 30, 2026
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SEC Completes Its Exit from Rule 14a-8 Review

Posted by Ferrell Keel, Joel May, and Kim Pustulka, Jones Day, on Monday, August 31, 2026
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2026 Proxy Season: Shareholder Proposals

Posted by Zally Ahmadi, D.F. King, on Monday, August 31, 2026
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Most Supplemental M&A Disclosures Aren’t Material

Posted by Melissa Sawyer, Sullivan & Cromwell, on Tuesday, September 1, 2026
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Season-end Summary of Shareholder Voting on 14a-8 Proposals

Posted by Neil McCarthy, Nicholas Sasso, and Emily Chapman, DragonGC, on Tuesday, September 1, 2026
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Choosing Your Corporate Home: A Trade-Off Guide for Founder-Led Tech Companies

Posted by Kealan Santistevan, Michael Mencher, and Liz Dunshee, Cooley LLP, on Wednesday, September 2, 2026
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2026 U.S. Proxy Season in Focus: Shareholder Proposals

Posted by Subodh Mishra, ISS STOXX, on Wednesday, September 2, 2026
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SEC Further Modifies Its Rule 14a-8 Response Process

Posted by Helena Grannis, J.T. Ho, and Abena Mainoo, Cleary Gottlieb Steen & Hamilton LLP, on Thursday, September 3, 2026
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Delaware Chancery Court Cautions Against Reading Between the By-Lines

Posted by Adam O. Emmerich, David A. Katz, and Kevin S. Schwartz, Wachtell Lipton Rosen & Katz, on Thursday, September 3, 2026
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Delaware Chancery Court Cautions Against Reading Between the By-Lines

Posted by Adam O. Emmerich, David A. Katz, and Kevin S. Schwartz, Wachtell Lipton Rosen & Katz, on
Thursday, September 3, 2026
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Adam O. Emmerich, David A. Katz, and Kevin S. Schwartz are Partners at Wachtell Lipton Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Emmerich, Mr. Katz, Mr. Schwartz, Theodore N. Mirvis, Elina Tetelbaum, and Loren Braswell, all at Wachtell Lipton.

In a significant decision for public companies facing activism, the Delaware Court of Chancery last week held that a board may not reject a director nomination notice based on disclosure requirements that are not explicitly spelled out in the corporation’s advance notice bylaws. In ATG Capital Opportunities Fund LP v. Lane et al., Vice Chancellor Lori Will found that Empery Digital, Inc. had improperly rejected the nomination notice of an activist investor, ATG Capital Opportunities Fund LP, notwithstanding the Empery board’s well-founded concerns that ATG Capital did not disclose it was acting in concert with another investor and had taken a large short position in Bitcoin ETFs to hedge its position in Empery. The Court concluded that the rejection was not based upon the plain language of Empery’s advance notice bylaws and therefore represented inappropriate interference with the stockholder franchise.

This litigation came after ATG Capital took a significant stake in Empery and nominated a slate of nine director candidates to the board. The Empery board considered the notice and determined that it was deficient both because ATG Capital did not disclose (i) that another investor was acting as a “participant” in ATG Capital’s solicitation and (ii) its short position in Bitcoin ETFs, and because the nominee questionnaires contained certain omissions and inaccuracies. Following receipt of a rejection notice, ATG Capital sued Empery to compel the company to allow the dissident nominees to stand for election.

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SEC Further Modifies Its Rule 14a-8 Response Process

Posted by Helena Grannis, J.T. Ho, and Abena Mainoo, Cleary Gottlieb Steen & Hamilton LLP, on
Thursday, September 3, 2026
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Helena K. Grannis, Abena Mainoo, and J.T. Ho are Partners at Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb memorandum by Ms. Grannis, Ms. Mainoo, Mr. Ho, Francesca Odell, Lillian Tsu, and Shuangjun Wang, all at Cleary Gottlieb.

On August 14, 2026, the SEC’s Division of Corporation Finance updated its statement on how it handles Rule 14a-8 shareholder proposals. The Division will now stop responding to shareholder proposal related no-action requests of any kind, and it will no longer issue “no-objection” letters in response to a company’s representation that it has a reasonable basis to exclude. The change is effective immediately and extends the modified process the Division rolled out last November, which we covered here.

For the coming proxy season, this reads as a slightly modified continuation of last season’s approach. The underlying rule has not changed, so a company weighing an exclusion is faced with the same set of exclusions it always has. The main practical difference is that companies will need to analyze the applicability of exclusions without expectation of a response from the Division; including a reasonable-basis representation will no longer elicit a no-objection response. Companies will still be required to submit an explanation of why the company believes that it may exclude a proposal. The statement has no end date and applies “unless and until the Division announces otherwise,” so we expect this to be the status quo until the SEC completes its planned Rule 14a-8 rulemaking, unless pending litigation against the SEC over last season’s process revision forces a change sooner.

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2026 U.S. Proxy Season in Focus: Shareholder Proposals

Posted by Subodh Mishra, ISS STOXX, on
Wednesday, September 2, 2026
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Subodh Mishra is the Global Head of Communications at ISS STOXX. This post is based on an ISS STOXX Governance report.

Introduction

The 2026 U.S. proxy season marked another period of significant change in shareholder proposal activity. While environmental and social (E&S) proposal volumes continued to decline sharply, governance-related proposals proved more resilient, increasing modestly from the prior year and accounting for a larger share of overall shareholder-sponsored resolutions. These developments unfolded against an evolving regulatory backdrop following changes to the SEC staff’s approach to shareholder proposal exclusions, as well as a broader reassessment of stewardship priorities by both proponents and investors. Voting outcomes suggest that shareholders remain willing to support proposals linked to established governance principles, while support for most E&S proposals remains well below their early 2020s peak despite signs of stabilization in certain issue areas. Together, these trends provide insight into how many investors are calibrating their issuer engagement and voting approaches amid changing market, regulatory, and political dynamics.

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Choosing Your Corporate Home: A Trade-Off Guide for Founder-Led Tech Companies

Posted by Kealan Santistevan, Michael Mencher, and Liz Dunshee, Cooley LLP, on
Wednesday, September 2, 2026
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Kealan Santistevan is a Partner, Michael Mencher is a Special Counsel, and Liz Dunshee is a Senior Strategic Advisor, Capital Markets and Corporate Governance at Cooley LLP. This post is based on their Cooley memorandum.

The choice of state of incorporation used to be handled quietly at formation or IPO and rarely revisited. Even as a handful of high-profile companies and commentators began questioning Delaware’s judge-made law and domicile dominance in 2024, it was unclear whether the sentiment would be temporary or make corporate domicile a more consequential decision.

For now, the latter appears more likely. In the past two years, 50+ public companies have reincorporated out of Delaware, while the First State’s share of the IPO market dropped from 81% in 2024 to “nearly 70%” in 2025. More recently, certain prominent companies have chosen Texas as their state of incorporation and are using the state’s statutory tools to tailor stockholder rights. Although very few widely held large-cap public companies have moved out of Delaware, the trend is more pronounced among founder-led companies or companies with large influential shareholders. The topic is drawing attention in proxy statements, academic journals and the financial press.

Once a company is public and widely held, reincorporation becomes much tricker, as proxy advisory firms have generally opposed moves to Nevada and Texas, and large institutional shareholders have also often opposed reincorporations, resulting in difficult shareholder votes for noncontrolled companies. For a founder-led technology company, where to incorporate is a strategic governance decision. This post offers factors to help companies and their advisors evaluate three prominent options: Delaware, Nevada and Texas. Contact your Cooley counsel to apply these factors to your company’s circumstances.

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