All items from Davis Polk Briefing: Governance

We previously described ISS’ draft voting policy to be effective for 2015 meetings beginning next February. Please see our comment letter to ISS on their proposed changes to the independent chair shareholder proposal. Final policy updates are expected on or around November 7, and are likely to cover more topics than the two proposals issued for comment.

Posted 1 day 13 hours ago

The SEC has approved Auditing Standard No. 18, adopted by the PCAOB in June. The standards become effective for audits of financial statements for fiscal years beginning on or after December 15, 2014, including for emerging growth companies (ECGs).  

Posted 3 days 17 hours ago

Companies may want to mark their calendars now for the period beginning 9 a.m. EST on November 3 through 8 p.m. EST on November 14 for the data verification period related to ISS Governance Quickscore 3.0. The updated scores and data will be released on November 24

Posted 6 days 17 hours ago

24 companies have adopted fee-shifting bylaws since May, according to Professor John Coffee in his testimony before the SEC Investor Advisory Committee. Fee-shifting bylaws impose a “loser pays” rule that transfers a company’s costs and expenses in shareholder litigation to the plaintiff shareholder if the plaintiff is unsuccessful.  

Posted 1 week 17 hours ago

According to Proxy Voting Analytics by The Conference Board, hedge funds submitted 39 shareholder proposals, an increase from 24 last year, and accounted for slightly more than 5% of the total. The main recipients of proposals were health technology companies and those in the financial sector. Most topics related to business strategies, such as requests to break up a company, divest it of noncore assets, engage advisers to evaluate a business combination, issue dividends or return capital to shareholders.  

Posted 1 week 2 days ago

Anadarko Petroleum Corporation and EOG Resources, Inc. agreed with the New York State Attorney General earlier this month to provide additional disclosure regarding hydraulic fracturing risks in, and outside of, their SEC filings. These agreements, available here and here, effectively set forth disclosure checklists for the companies’ annual reports on Form 10-K for any material financial effects of current and future hydraulic fracturing regulation, litigation and impacts to drinking water, air and the environment resulting from hydraulic fracturing, including disclosure of each company’s management of these matters. In addition, Anadarko and EOG agreed to publicly disclose (outside of their SEC filings) detailed information regarding hydraulic fracturing risk mitigation techniques, chemical and greenhouse gas information and injury rate and spill statistics. These agreements resolve investigations the Attorney General brought in June 2011 under the Martin Act, a New York State securities law. 

Posted 1 week 3 days ago

For companies considering a review of the audit committee disclosure in proxy statements, the recent review by EY's Center for Board Matters provides several insights on some of the additional information that Fortune 100 companies included in 2014. We previously discussed some of the background related to the increased disclosure here.

Posted 1 week 6 days ago

ISS has published its draft 2015 voting policies for public comment, which are due on October 29. The final release is expected around November 7 and any new updates will apply for meetings taking place on or after February 1, 2015.

Posted 2 weeks 1 day ago

Last Wednesday, an 8-K from Icahn Enterprises L.P. reported that its chairman, Carl Icahn, intends to use Tumblr, Facebook, Twitter and a particular website (www. to communicate about the company and “other issues.” The 8-K acknowledges that it is possible that the information he posts could be deemed to be material information, and therefore the company encourages investors, the media and other interested parties to review this information along with traditional investor relations communications channels such as its own website, SEC filings and press releases.  

Posted 2 weeks 1 day ago

The European Council adopted on September 29, 2014, a Directive requiring large public interest entities with more than 500 employees to disclose in their annual reports “relevant, useful information” necessary for an understanding of such companies’ environmental, social, employee, human rights, anticorruption and bribery matters. These companies will also be required to disclose board diversity matters. The disclosure would focus on the companies’ governing policies, related risks and the management of such risks. The Directive will become law 20 days after it is published in the European Union Official Journal (which is expected in due course). Member states will have two years to transpose the Directive into national legislation. Companies will need to begin reporting as of their financial year 2017.  

Posted 2 weeks 2 days ago