Sky Blog
A corporate governance revolution is underway. The conventional depiction of the U.S. capital markets has focused on the presence of large institutional shareholders and their substantial influence over the economy. But in the past two years, in response to political …
Must a company allow a stockholder, no matter the size of its stake, to submit non-binding proposals for stockholder action at a meeting, regardless of their number or subject matter? The answer depends on whether, under Delaware law, stockholders have …
During each annual proxy “season,” companies receive and respond to shareholder proposals and often attempt to exclude these proposals from their proxy statements through no-action requests submitted to the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the …
Shareholder proposals on political issues—particularly lobbying spending disclosure and campaign finance issues—have been a common part of the proxy landscape for some time now. This proxy season, proposals seeking greater transparency around corporate political spending had surprising success compared to …
Critiques of both ESG and anti-ESG shareholder proposals[1] provide a valuable opportunity to clarify what matters in modern corporate governance: active shareholder participation, empirical evidence, and a holistic understanding of risk. While Michael Levin and others rightly highlight the …
Proxy advisers play a pivotal role in corporate governance by providing institutional investors with recommendations on how to vote at shareholder meetings. These firms influence key corporate decisions, including the election of directors, executive compensation, and governance policies, thereby exerting …
Proxy advisers exercise immense influence through their voting recommendations to shareholders. Corporations, aware of the importance of those recommendations, expend valuable resources to ensure that the recommendations align with management’s preferences by hiring governance consultants to influence outcomes. These consultants …
While shareholder proposals on governance are perennial favorites that win majority support from shareholders, advisory proposals that continue to receive significant support from a bloc of investors highlight areas in which enhanced corporate disclosure could be material to a significant …
The “anti-ESG” proposal arose somewhat recently, becoming more common within the past five or so years. Similar in spirit to ESG proposals, but their opposite. Like their conventional counterpart, they request a company consider or study or write a report
The Staff in the Division of Corporation Finance at the U.S. Securities and Exchange Commission has issued three new sets of guidance that may influence and potentially reshape how shareholders engage with companies going forward.
On …
On February 12, the Staff of the SEC Division of Corporation Finance published a new Staff Legal Bulletin No. 14M(“SLB 14M”) regarding the exclusion of Rule 14a-8 shareholder proposals under Rule 14a-8(i)(5) (“economic significance”) and Rule 14a-8(i)(7) (“ordinary business”). …
Let’s say upfront: voting “no” or withholding votes on directors is a relatively weak way to influence a portfolio company. We’re stubborn, so we prefer electing directors or amending bylaws. Binding acts work much better than non-binding, like opposing exec …
The 2024 proxy season was characterized by a high volume of shareholder proposals submitted to companies, including proposals relating to topical issues such as artificial intelligence (“AI”) and political lobbying and spending. In addition, the number of no-action requests submitted …
The right of shareholders to vote is essential for maximizing the value of their shares and good corporate governance. However, in a diffusely held corporation, few shareholders have the incentive to monitor management at their own cost, leading to a …
Corporate politicization, when companies take sides in our culture war and risk alienating half their potential customers, is a serious concern. Recent examples of companies that have felt its negative impact on shareholder value abound, including Bud Light, Target, and …
The shareholder proposal process has gone too far. How else to interpret the proposal recently sponsored by the climate activist investors Arjuna Capital and Follow This at ExxonMobil, which called on the oil giant to reduce further its carbon footprint? …
Corporate disclosures concerning artificial intelligence have increased dramatically in the past year, with Bloomberg reporting that nearly half of S&P 500 companies referenced AI in their most recent annual reports. And some investors are clamoring for even more, using shareholder …
Proponents of ESG have recently had to contend with several developments that, at first blush, appear inconvenient. Investor support for ESG-focused shareholder proposals seems to have declined year-on-year, and some investors have abandoned ESG-themed funds while others have withdrawn from …
On November 21, 2023, a coalition of labor unions led by the Service Employees International Union (SEIU), announced that it has nominated three director candidates for election to the Board of Directors of Starbucks at the 2024 annual meeting of …