Yearly Archives: 2026

How Boards Can Lead in a World Remade by AI

Posted by Lee Henderson and Jamie Smith, EY, on
Thursday, February 19, 2026
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Lee Henderson is the Center for Board Matters Leader, and Jamie Smith is the Center for Board Matters Investor Outreach and Corporate Governance Director at EY. This post is based on their EY memorandum.

In brief

  • AI’s impacts on strategy, talent, and risk make it essential for boards to adapt their oversight approaches.
  • The board’s guidance is key to helping companies harness AI for growth, maintain needed skills, and drive accountability for AI’s uses and outputs.
  • Leading boards can fulfill this responsibility by adopting new ways to engage with management, embed AI into oversight, and keep current with AI developments.

Picture this: You’ve just opened your favorite news site to catch up on today’s hot topics. You’re pleased to see a feature article suggesting that your company’s new AI-powered services have poised it for rapid growth. However, you’re taken aback by a headline about another company’s corporate scandal involving the failure to check inaccurate AI-generated information. There’s also an editorial voicing concerns that AI could lead to mass unemployment—a sore spot for you, since the board you sit on has just reviewed a management proposal to cut more than a third of the junior workforce “because now we can do it with AI.”

Events like these are emblematic of how AI is driving significant change on many fronts. Below, we explore three shifts that boards should consider—and how these shifts require directors to challenge old assumptions about how they engage with management, with each other, and with the world around them.

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Practicing Law in a Lawless Time

Posted by Leo E. Strine, Jr. (University of Pennsylvania Carey Law School), on
Thursday, February 19, 2026
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Leo E. Strine, Jr. is the Michael L. Wachter Distinguished Fellow in Law and Policy at the University of Pennsylvania Carey Law School. This post is based on his recent paper.

There have been many periods in our nation’s history where serious and legitimate questions were raised about the effectiveness and integrity not only of corporate governance practices, but about the corporate bar itself, such as during the financial crisis.  With power and influence come corresponding responsibility.  At the turn of the 19th into the 20th century, figures like Elihu Root and Louis Brandeis advocated for corporate lawyers to counsel America’s burgeoning large corporations to conduct themselves in a law-abiding manner.  In the wake of the market-shaking frauds associated with the savings and loan crisis in the 1980s and companies like Enron and Worldcom around the turn of this century, the legal profession came under close scrutiny again.  The same was true when it came to light that law firms had helped tobacco and other companies develop approaches to shield the harmful impact of their products from public disclosure.

But this moment is different for a fundamental and disturbing reason.  In prior moments, the assumption was that those charged with enforcing the law in an even-handed manner were committed to doing so in good faith.  The questions in prior moments were whether corporations and their legal advisors were taking advantage of the inevitable inability of regulators to catch every violation or to update regulations rapidly enough to address new innovations in areas like finance that hazarded fraud and financial failure.  That is, it could mostly be taken for granted that the government, regardless of which party was in charge, would in the large main be true to the enacted laws of the nation and apply them in a fair, non- retributive, non-discriminatory way. READ MORE »

SEC Investment Management Director Questions ‘Vote-All’ Proxy Practices and Adviser Reliance on Proxy Advisors

Posted by Michael A. Asaro, Peter I. Altman, and Jason Daniel, Akin Gump Strauss Hauer & Feld LLP, on
Thursday, February 19, 2026
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Michael A. Asaro, Peter I. Altman, and Jason Daniel are Partners at Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump memorandum by Mr. Asaro, Mr. Altman, Mr. Daniel, Douglas A. Rappaport, William K. Wetmore, and Barbara Niederkofler.

Key Points

  • On January 8, 2026, Brian Daly, Director of the SEC’s Division of Investment Management, delivered remarks at the New York City Bar Association addressing proxy voting practices, including whether advisers may have defaulted to automated voting processes that rely heavily on proxy advisory firm recommendations rather than judgments made in their clients’ best interests.
  • Director Daly framed his remarks as part of a broader reassessment of proxy voting practices, encouraging advisers to move away from rote, box-checking approaches and to re-evaluate whether their current practices align with their investment mandates and client objectives.
  • The remarks come amid heightened focus on proxy voting, including a recent Executive Order by President Trump and public statements by SEC Chairman Paul Atkins indicating increased attention to the role of proxy advisors. More broadly, they also reflect an effort across various divisions of the SEC to re-examine longstanding regulatory practices to assess whether they continue to function as intended.

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Remarks by Chair Atkins on Revitalizing U.S. Capital Markets and State Competition in Corporate Law

Posted by Paul Atkins, U.S. Securities and Exchange Commission, on
Wednesday, February 18, 2026
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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 remarks. The views expressed in the post are those of Chairman Atkins and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Thank you, David [Woodcock], for your generous introduction. And good morning, ladies and gentlemen. I am delighted to be here, and grateful for this opportunity to share a few reflections.

Let me begin by thanking our hosts at the Texas A&M University School of Law for convening today’s program. Though only in its second year, the symposium has already earned a reputation for rigor and insight. So, to address leading judges, scholars, and practitioners here, at the Federal Reserve Bank of Dallas, is a profound honor. And before I begin, let me add the customary disclaimer that the views I express here are my own as Chairman and not necessarily those of the SEC as an institution or of the other Commissioners.

Now, some of you may recall that last fall, I addressed a conference at the University of Delaware’s Weinberg Center for Corporate Governance. [1] I spoke candidly about the declining number of public companies in our capital markets and the reforms that I believe are necessary to revitalize them. I also emphasized the important role that States play in these reforms, especially in the areas of litigation reform and shareholder proposals. That speech took place during a period when prominent firms were raising concerns about continuing to be domiciled in Delaware, with some moving elsewhere and encouraging others to follow suit. [2]

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2025 Activism Retrospective

Posted by Jamie Leigh, Sean Brownridge, and Bill Roegge, Cooley LLP, on
Wednesday, February 18, 2026
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Jamie Leigh, Sean W. Brownridge, and Bill Roegge are Partners at Cooley LLP. This post is based on a Cooley memorandum by Ms. Leigh, Mr. Brownridge, Mr. Roegge, Kevin Cooper, Lucas Wherry, and Simon Trisk.

Activists enjoyed a banner year in 2025. From proxy contest wins at blue-chip companies to a partnership with Taylor Swift’s fiancé, engaged shareholders once again demonstrated their capabilities, creativity and readiness. As we discussed in the fall, this year’s activism menu also included the rise of “withhold” campaigns, notable Delaware litigations regarding advance notice bylaws and the continued prominence of investors “swarming” targeted issuers.

This article complements our earlier market update by completing our 2025 activism retrospective and ensuring that boards and management teams have the information necessary to assess the activism playing field in 2026.

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2016 vs 2026: Lessons from a Decade of Corporate Climate Action

Posted by Meghan Sheehan and Ella Woolhouse, Kekst CNC, on
Tuesday, February 17, 2026
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Meghan Sheehan is a Partner and Ella Woolhouse is a Senior Associate at Kekst CNC. This post is based on their Kekst memorandum.

A decade ago, the landscape of corporate sustainability was almost unrecognisable. AI was still more Spielberg than strategy, and ‘net zero’ had yet to enter the corporate lexicon. Two years after the Paris Agreement, businesses were beginning to translate pledges into early strategies, not yet racing towards a lower-carbon future.

Ten years on, that landscape has been tested, reshaped, and in some cases, hardened into realism. In hindsight, 2016 looks less like a moment of achievement and more like a genuine tipping point – the start of something far more complex than many expected.

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Preparing for the 2026 Annual Reporting and Proxy Season

Posted by Doreen Lilienfeld, Erika Kent, and Melisa Brower, A&O Shearman, on
Tuesday, February 17, 2026
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Doreen Lilienfeld, Erika Kent, and Melisa Brower are Partners at A&O Shearman. This post is based on an A&O Shearman memorandum by Ms. Lilienfeld, Ms. Kent, Ms. Brower, John Cannon, Richard Alsop, and Hugo Casella.

ESG, DEI AND HUMAN CAPITAL DISCLOSURES

The prevalence of public company human capital practices and disclosures ebbs and flows. Over the last two years, DEI-related metrics in incentive plans and references in annual reports and proxy statements receded amid legal headwinds, shifting policies and recalibrated investor voting guidelines.

As the next reporting season approaches, companies should ensure that disclosures reflect any updates to DEI policies and align with current practices, reconcile policies with evolving regulatory and legal guidance, and calibrate to increasingly divergent stakeholder expectations. Nasdaq-listed issuers should consider removing the prescriptive board-diversity table, which is no longer required after the Fifth Circuit’s December 2024 ruling. Risk factors in the 2026 annual report should be updated to match current commitments and oversight practices, and companies that revised or omitted DEI metrics in 2025 annual compensation plans should ensure disclosures in their annual report and proxy statement reflect those amendments. Companies should also monitor further developments in proxy advisory firm and institutional investor voting guidelines on DEI matters.

Bottom line: ensure practices, governance documents, and public disclosures are consistent and responsive to investor regulatory and other stakeholder expectations which may not be straightforward to do because of conflicting perspectives. For more information about 2025 trends in the use of DEI metrics in incentive plans and DEI references in human capital and proxy disclosures, see our article, Evolving Trends in Human Capital Practices and Disclosures, published in A&O Shearman’s 23rd Annual Corporate Governance & Executive Compensation Survey.

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US Proxy-Voting Trends: 2025 in Review

Posted by Lindsey Stewart, Morningstar, Inc., on
Monday, February 16, 2026
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Lindsey Stewart is the Director of Investment Stewardship Research at Morningstar, Inc. This post is based on his Morningstar report.

Key Observations

  • We analyzed proxy-voting records of 50 of the largest US managers of equity and allocation funds for companies in the Morningstar US Large-Mid Cap Index over the 2023, 2024, and 2025 proxy years. We also assessed votes by eight European asset managers and 601 US sustainable funds.
  • There was a slight increase in shareholder support for management resolutions: Average support rose to 95.6% in 2025, from 95.0% in 2024 and 95.1% in 2023.
  • Average support for shareholder resolutions on governance remained steady at around 30%.
  • Meanwhile, average support for environmental and social, or E&S, shareholder resolutions fell from 18.8% in the 2023 proxy year to 11.6% in 2025.
  • Votes by the top 10 US managers of equity and allocation fund assets were more supportive of management compared with the other 40 US firms.
  • The top 10 comprises the Big Three index managers— BlackRock, State Street, and Vanguard—alongside Capital Group, Dimensional, Fidelity (including funds subadvised by Geode), Invesco, J.P. Morgan, Schwab, and T. Rowe Price.
  • These firms showed above-market-average support for management resolutions and below-marketaverage support for shareholder resolutions every year. The reverse is true for the next 40 US firms.
  • Voting decisions by US sustainable funds showed much lower support for management resolutions and much higher support for E&S shareholder resolutions compared with the US firms overall.
  • European firms dissented from the management view more often than any of the US peer groups, reflecting a transatlantic gap in voting patterns.

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The Art of Indemnifying Attorneys’ Fees for M&A Disputes

Posted by Frank Favia, Jonathan Dhanawade, and Andrew Stanger, Mayer Brown, on
Sunday, February 15, 2026
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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.

Buyers in M&A transactions often assume that they will be able to recover reasonable attorneys’ fees in connection with a successful indemnification claim if the purchase agreement generally includes attorneys’ fees in the definition of indemnifiable losses. However, buyers may be surprised to learn that Delaware law presumes that attorneys’ fees incurred by a buyer in pursuing an indemnification claim against a seller (often referred to as a “first-party” claim) are not recoverable unless the purchase agreement includes a “clear and unequivocal articulation” of the parties’ intent to require fee shifting.

This Legal Update examines two recent Delaware opinions that illustrate this legal principle. It also discusses drafting nuances for parties that wish to include attorneys’ fees for first-party claims among indemnifiable losses.

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A Proxy Odyssey: What Will 2030 U.S. Proxy Season Look Like?

Posted by Sean Quinn, Matt Filosa, and Sydney Carlock, Teneo, on
Saturday, February 14, 2026
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Sean Quinn and Matt Filosa are Senior Managing Directors, and Sydney Carlock is a Managing Director at Teneo. This post is based on a Teneo memorandum by Mr. Quinn, Mr. Filosa, Ms. Carlock, Martha Carter, and Diana Lee.

The Current Landscape

For decades, corporate governance operated on relatively stable ground, even amid backlash against proxy advisors and the proxy voting system itself. The Securities and Exchange Commission (SEC) controlled ballot access, research and recommendations from proxy advisors like ISS and Glass Lewis influenced voting outcomes, voting power was concentrated among a handful of large asset managers expected to vote every share, and engagement was a straightforward exchange between investors and issuers.

That stability has recently unraveled with unprecedented speed and intensity. In 2025, a wave of regulatory actions, driven in part by political backlash against ESG, began to significantly reshape the corporate governance landscape. As companies prepare for the 2026 proxy season, investor engagement has grown less candid, proxy advisory firms face existential pressure from regulators and AIdriven competitors, and the shareholder proposal process has been fundamentally, if temporarily, altered. In short order, proxy seasons have become much harder for companies to manage and predict, and that trend is likely to continue.

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