Crisis management is a vital organizational function, enabling resilience and mitigation against potential adverse implications associated with disruptive events such as financial instability, cyberthreats, operational breakdowns, and reputational harm—any of which may jeopardize ongoing  operations and an organization’s long-term viability. The board of directors plays a crucial role in this area by providing strategic oversight, establishing governance frameworks, and making informed decisions that are important, particularly in today’s increasingly complex risk landscape.

This Board Practices Quarterly is based on a recent survey of members of the Society for Corporate Governance representing public and private companies. The survey, fielded in Q4 2025, examined organizational crisis preparedness and governance, including topics such as crisis plan formalization, types of crises addressed in the plan, management functions that participate in crisis teams, and the role of the board of directors.

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Today’s corporate boards are confronting a period of unprecedented leadership churn, systemic risk, and technological disruption. This report outlines the top five governance priorities corporate directors face in 2026, based on an analysis of CEO and board-level interviews, proprietary survey data, and emerging market trends.

Top Five Governance Priorities for 2026

1. Fortify CEO succession and leadership pipelines: A demographic wave of CEOs staying in their roles past traditional retirement age, combined with the increasing materiality of leadership quality to value, is creating an impending need for robust planning.
2. Drive strategic board refreshment and composition: A persistent gap between the need for new board skills and the slow pace of director turnover is creating strategic vulnerabilities and attracting activist attention.
3. Build resilience in the context of geopolitical and economic volatility: Escalating geopolitical and economic uncertainty are the paramount risks for boards for the third year in a row, demanding enhanced scenario planning and further increasing the importance of a robust leadership pipeline and new director expertise.
4. Formalize AI governance and strategic oversight: A critical “discussion vs. action” gap in AI oversight is exposing firms to unmanaged risks and hindering their ability to capitalize on AI-driven strategic opportunities.
5. Proactively manage shareholder activism: Sustained, high-level activism is acting as a market-enforced penalty for governance lapses, making proactive board refreshment and strategic alignment the most effective defense.

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Key Takeaways:

• Special committees can be important tools for boards facing actual or potential conflicts of interest.
• To realize their benefits, special committees should consist of only disinterested and independent directors, receive a clear and comprehensive mandate, function independently, and ensure that their work is well documented.
• This article offers practical guidance about when to form a special committee, committee composition, advisors to the committee, and documenting the committee’s work, with a focus on Delaware law.

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A Compensation Committee Roadmap for Evaluating Long-Term Incentives in 2026

U.S. executive compensation has come to rely heavily on Performance Share Units (PSUs). PSUs are awards of stock units which are earned based on pre-established financial and/or market goals, most commonly measured over a three-year performance period. The widespread adoption of PSUs was partly driven by proxy advisor expectations to grant at least half of executive annual long-term incentives (LTI) in PSUs. Failure to comply invited criticism and a challenged Say-on-Pay outcome, a risk few Compensation Committees were willing to endure. The result was a homogenized landscape where, for some companies, proxy advisor compliance may have taken precedence over strategic alignment.

Has the pendulum swung too far toward PSUs? Some investors think so and, in 2026, proxy advisors have signaled greater flexibility toward alternative LTI structures. This article explores why the three-year PSU model is under pressure and provides a 2026 roadmap for Compensation Committees when evaluating LTI design for 2027.

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The C-suite has always been demanding. But the challenges facing today’s C-suite leaders are not just larger versions of yesterday’s problems. They are systemically different in velocity, visibility, and complexity.

CEOs and senior executives operate at the intersection of geopolitical volatility, macroeconomic uncertainty, technological disruption, stakeholder activism, and heightened governance scrutiny. Artificial intelligence is reshaping operating models. Political tensions influence supply chains. Social issues spill into corporate strategy.

Expectations have expanded dramatically, and yet none of the traditional financial performance pressures have been removed; they have simply been layered upon. The margin for error is narrowing, the runway for impact is shorter, and isolation at the top is more pronounced than ever.

In this environment, a mentor is no longer a developmental luxury. It is strategic infrastructure, providing the framework for executive and organizational success.

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This report examines how the composition, compensation, and sectoral profile of named executive officers (NEOs) at US public companies have evolved since 2021, drawing on Russell 3000 and S&P 500 disclosure data to illuminate shifting C-Suite priorities and pay dynamics.

Trusted Insights for What’s Ahead®

• Beyond the CEO and chief financial officer (CFO), business unit heads are the most prevalent NEO roles—although their prevalence has notably declined since 2021.
• Chief legal officers (CLOs) and equivalents are a prevalent NEO role and recorded the largest absolute increase between 2021 and 2025.
• CLOs, chief technology officers (CTOs), chief human resources officers (CHROs), and chief commercial officers (CCOs) are all increasing in prevalence as NEOs—reflecting increased corporate emphasis on enterprise risk, technology, talent, and revenue.
• While mandates such as data, cybersecurity, and sustainability are increasingly strategic priorities, they are not consistently reflected as standalone NEO titles, suggesting these responsibilities are often embedded within broader executive roles.
• Reported median NEO compensation rose again in 2025, with faster growth in the Russell 3000 than in the S&P 500 and strong increases for roles such as CHRO and CLO.
• Men continue to earn more than women across the broader NEO population—with some notable exceptions—largely reflecting differences in role distribution, tenure, and concentration in the highest-paid operational and enterprise leadership positions.

NEOs at US public companies are the top executives whose compensation must be disclosed in detail under Securities and Exchange Commission (SEC) rules, generally including the CEO, CFO, and up to three other highest-paid executive officers. This information is disclosed in the annual proxy statement (DEF 14A), primarily in the Compensation Discussion and Analysis (CD&A) and related tables; and supports shareholder oversight, proxy voting, and assessments of executive pay and accountability.

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In startups, exceptional companies often produce a second generation of influential founders—the “PayPal mafia” being the canonical example. Activism is proving no different. When a firm develops a distinctive playbook, compounds credibility, and delivers repeated success, it does more than win campaigns. It becomes a training ground. Alumni leave with experience, networks, and reputational capital that can be redeployed into new firms, new pools of capital, and new forms of influence. In that sense, leading activist funds do not merely participate in the market; they help build it.

This report examines that dynamic through the firms launched by alumni of eight major activist platforms: Elliott, Starboard, Icahn, Trian, ValueAct, Pershing Square, JANA, and Third Point. The evidence suggests that these spinouts have become an increasingly important source of campaign activity. Their significance lies not only in number, but in function. By adding new vehicles, specialized teams, and fresh capital, spinouts expand the market’s overall activism capacity without requiring legacy firms themselves to increase public campaign volume at the same pace.

That expansion is now visible in practice. Firms such as Irenic Capital, Donerail Group, Fivespan Partners, and Ananym Capital show how experienced teams can establish credible independent platforms and secure influence through cooperation agreements, board representation, and transaction-driven campaigns, often without a prolonged proxy contest. The point is not simply that former activists are founding new firms. It is that these firms are already shaping outcomes in ways that make the market broader, more specialized, and more resilient.

For boards and advisers, the implication is immediate. Activism surveillance can no longer be organized solely around a fixed roster of incumbent names. It must also account for networks, institutional lineages, and the firms emerging from them. The most important actors in the next cycle may not always be the legacy platforms themselves, but the alumni they trained.

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The 2026 proxy season unfolds amid significant shifts in the regulatory, political, and investor landscape, reshaping how shareholder proposals are filed, evaluated, and voted. Following record activity in 2024 and a modest pullback in 2025, companies now face a proxy environment defined less by volume and more by discretion, legal complexity, and evolving investor expectations.

Trusted Insights for What’s Ahead®

• More shareholder proposals are being resolved off the ballot rather than put to a vote. Negotiation, withdrawal, and omission increasingly shape outcomes, raising the bar for proposals to advance.
• Procedural changes have materially reshaped the shareholder proposal process. Record no-action activity, the US Securities and Exchange Commission’s (SEC’s) retreat from routine staff review, and tighter rules on exempt solicitations place greater responsibility—and risk—on issuers and proponents.
• Voting outcomes are becoming less predictable as decision-making grows more contextual. Asset managers and proxy advisors continue to rely less on rigid policy frameworks and more on issuer-specific facts, disclosure quality, and demonstrated responsiveness.
• Proxy disclosure is emerging as a central stewardship tool in a more constrained engagement environment. As informal engagement and procedural guardrails narrow, clear, decision-oriented proxy disclosure plays an increasingly important role in shaping investor understanding and voting behavior.

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INTRODUCTION

1. For more than eight decades, the Securities and Exchange Commission (SEC) has safeguarded the right of shareholders in a public company to present a proposal in the company proxy statement regarding significant issues of concern. This right—enshrined in a regulation known as Rule 14a-8 under the Securities Exchange Act of 1934 (the Exchange Act)—has long served as a foundational mechanism for shareholder participation in corporate governance and for advancing the Exchange Act’s core goals of investor protection and transparent markets.
2. Shareholder proposals are a critical mechanism for a company’s shareholders to raise and vote on important issues directly relevant to a company’s long-term performance and risk profile. More broadly, this process reflects a core principle of American capital markets: that investors who supply capital to public companies retain meaningful rights to protect their investment by participating in corporate governance. The transparency and accountability that follow robust shareholder rights are also a key reason that global capital flows to American markets—investors have confidence that U.S. markets provide meaningful mechanisms for disclosure, accountability, and investor protection.
3. When a company seeks to exclude a qualified shareholder proposal from its proxy materials, it must comply with the procedural framework established by Rule 14a-8. The company must notify both the Commission and the proposal’s proponent and articulate the legal basis for exclusion. This obligation ensures that proponents have an opportunity to respond and that SEC staff can evaluate whether the exclusion is consistent with Rule 14a-8 and longstanding Commission precedent.
4. In recent months, the SEC has adopted a new policy abandoning the requirements and procedures established by the Commission’s own regulation governing the shareholder proposal process. Rather than hearing from both sides and engaging in the review contemplated by the regulations, SEC staff now categorically issues “no-objection” letters—or effectively blesses exclusions—when companies invoke certain formulaic assertions in their submissions. This approach replaces meaningful regulatory oversight with a new, de facto rubber-stamp process that allows companies to exclude proposals without any analysis by the staff.
5. This policy was implemented without the notice-and-comment rulemaking that is required by the Administrative Procedure Act (APA) when an agency adopts or effectively alters binding regulatory standards. The APA requires federal agencies to act through transparent procedures; provide reasoned explanations for policy changes, regardless of the language the government uses to characterize them; and to give affected stakeholders an opportunity to comment before altering decades of the operation of existing regulations. The SEC circumvented the procedural safeguards of the APA and effectively changed how Rule 14a-8 operates through informal staff practice rather than through rulemaking.
6. The result is a process that deprives shareholders of rights established by SEC regulation and decades of Commission precedent. This approach will lead to the exclusion of shareholder proposals that should be included in proxy materials, weakening a core mechanism of shareholder participation in corporate governance. In doing so, it risks undermining investor confidence in the transparency and accountability of U.S. public markets—principles that have long distinguished American capital markets globally. These outcomes are difficult to reconcile with the Commission’s statutory mission to protect investors, maintain fair and orderly markets, and facilitate capital formation.

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Boards and management all have the same fear – the ominous news story, 13D filing, or even the first phone call when an activist investor introduces themselves as one of their largest shareholders. What happens next is swift and often sets the tone for the engagement. The Board is notified, advisors are summoned, and a defense plan is assembled. Directors are flooded with counsel from advisors who claim they know the activist best and have seen this situation many times before.

In these moments, it’s easy for Boards to slip into self-preservation mode and engage in standard defensive tactics. However, many of these well-advised tactics may jeopardize trust with the activist and ultimately reduce the company’s negotiating leverage. Rather than establishing the basis for a thoughtful exchange of ideas, some standard defense tactics can inadvertently signal resistance and bad intentions, making it more difficult to maintain a constructive dialogue that could lead to a mutually beneficial outcome.

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Key Takeaways

•  Nearly 25% of Russell 3000 companies submitted an equity plan proposal in 2025. Shareholder support was strong at 88% on average, and less than 1% of proposals failed to receive majority support, consistent with 2023 and 2024 levels
• It is most common for companies to return to shareholders every 2 to 3 years to seek equity plan approvals
• While proxy advisor opposition to equity plan proposals typically results in lower shareholder support, the proposal failure rate increases only modestly (to a failure rate of less than 4%)
• Among the limited number of companies that failed to receive shareholder support over the last two years, approximately half were in the health care (e.g., pharma/biotech) sector
• Companies can take several steps to improve the likelihood of a successful shareholder vote outcome, including: analyzing share reserve needs, assessing potential dilution, understanding top shareholder voting policies and proxy advisor concerns, and clearly disclosing the shareholder-friendly features of the equity plan

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Texas is entering a watershed moment in corporate law and market development. Over just the past few months, the state has attracted headline‑making redomestications, launched multiple nationally significant stock exchanges, and expanded the reach and influence of the Texas Business Court. Together, these developments signal more than incremental progress—they reflect Texas’s accelerating rise as a premier jurisdiction for corporate governance, capital formation, and high‑stakes commercial dispute resolution. For officers and directors evaluating strategic opportunities in 2026, understanding Texas’s rapidly evolving corporate landscape has never been more important.

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On February 27, 2026, more than two weeks in advance of the deadline, the U.S. Securities and Exchange Commission (the “SEC”) adopted final amendments to certain rules and forms under the Securities Exchange Act of 1934 (the “Exchange Act”) to reflect the requirements of the Holding Foreign Insiders Accountable Act (the “HFIAA”).  The HFIAA, and the SEC’s related rules, subject officers and directors of foreign private issuers (“FPIs”) to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act, beginning with an obligation to file an initial statement of beneficial ownership on Form 3 no later than March 18, 2026.  Importantly, the SEC’s rule amendments do not go beyond what was required by the HFIAA, providing needed certainty with respect to the scope of this new obligation for insiders of FPIs.  Subsequently, on March 5, 2026, the SEC published an order granting an exemption from beneficial ownership reporting requirements under Section 16(a) for officers and directors of certain FPIs.  This alert addresses the SEC’s rule amendments and the exemptions therefrom, and provides some potential next steps for FPIs to which the reporting requirements will apply.

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Overview

In a precedent-setting derivative decision, the Delaware Court of Chancery held that a board of directors’ and senior officers’ failure to respond in good faith to clear red flags of workplace sexual misconduct may give rise to viable breach of fiduciary duty claims under Delaware law. In an opinion penned by Chancellor Kathleen J. McCormick, the court denied motions to dismiss claims against certain directors and officers of eXp World Holdings Inc., ruling that the plaintiffs had pled sufficient facts to support allegations that the company’s fiduciaries had breached their oversight obligations and that the chief executive officer (CEO) had breached his duty of loyalty by concealing information and retaining employees implicated in the alleged misconduct. Los Angeles City Employees’ Retirement System v. Glenn Sanford, et al., C.A. No. 2024-0998-KSM (Del. Ch. Jan. 16, 2026).

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Securities and Exchange Commission (SEC) Chair Paul Atkins recently reiterated his preference to loosen corporate accountability standards at a conference hosted by the Council of Institutional Investors. As the fiduciary for a state pension fund, I believe that weakening shareholder engagement creates risks that beneficiaries and state governments cannot afford.

Stories of CEOs raking in multimillion-dollar bonuses while middle-class workers struggle to pay rent or save for retirement have become all too familiar. Those disparities didn’t arise overnight but they have sharpened investor and public scrutiny of corporate governance. That’s why the federal administration’s effort to weaken shareholder rights is so concerning. Shareholders must have a voice in corporate governance given the capital they have invested in American businesses.

As Oregon State Treasurer I am charged with managing a diversified institutional portfolio of more than $148 billion in assets under management, including the Oregon Public Employees Retirement Fund (OPERF), one of the largest public pension funds in the country.  Treasury staff invest these assets to achieve strong, risk-adjusted returns for beneficiaries. Public employees’ and retirees’ financial security depends on the long-term health of the assets we help steward.

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Brief teaser: Geopolitical shocks directly alter the risk calculus for shareholder activists. This Update lays out factors at play in activists’ decisions as proxy season meets the Iran conflict, whether activism is likely to decline, and approaches companies should take.

Escalating hostilities in the Middle East have injected a new layer of geopolitical risk into already fragile capital markets. The effects of oil price volatility, supply chain disruption, cyberthreats, and heightened regulatory scrutiny are rippling across industries. As with tariffs last year, geopolitical shocks do not affect only a company’s operating performance; they also directly alter the risk calculus for shareholder activists. While the ultimate geopolitical trajectory remains uncertain, the immediate question for Corporate America is more tactical: Will the Iran war chill proxy contests this season?

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