Low board turnover? Less opportunity for board diversity

Is board stability always a good thing? A new study from consultant Spencer Stuart showed that, in 2018, 428 new directors were elected to boards of companies in the S&P 500, the most new directors since 2004, representing an increase of 8% from 2017.  What’s more, 57% of boards added at least one new director, and 22% appointed more than one new director. However, overall turnover remained “modest.” While these new directors added  “fresh skills, qualifications and perspectives”—and many were women, minorities and/or first-time directors—nevertheless, the study concludes, “progress is mixed.”

NYSE proposes change to conform to new SEC definition of smaller reporting company

The NYSE has proposed a change to Section 303A.00 of the Listed Company Manual  related to the exemption from the compensation committee requirements applicable to smaller reporting companies. (See this Cooley Alert.) The amendment is intended to conform the Section to the new SEC rules related to SRCs.

Corp Fin updates CDIs related to smaller reporting companies

Corp Fin has posted some updates to its CDIs relating to the new rule amendments regarding smaller reporting companies. (See this Cooley Alert and the SEC’s  Amendments to the Smaller Reporting Company Definition — Compliance Guide.)  In connection with the new updates, Corp Fin has also withdrawn a number of CDIs (presumably, at least in part, because they were no longer appropriate in view of the changes to the rules).  Below are summaries:

It’s election day, and CEOs consider the role of business in society

It’s election day.  Don’t forget to vote!

And given that it’s election day, it’s a good time to step back and consider the big picture.  To that end, you might want to take a look at this DealBook column, which discusses CEOs’ perspectives on the role of business in politics and the impact of technology on society—all in one column no less.

NYSE proposes to amend shareholder approval requirements

No, it’s not Groundhog Day. (In fact, it’s election day.  Go vote!) But this proposal from the NYSE to amend Sections 312.03 and 312.04 of the Listed Company Manual sounds remarkably similar to the one that the SEC has just approved for Nasdaq—modifications to the price requirements for purposes of determining whether shareholder approval is required for certain issuances.  (See this PubCo post.)  Just like the new Nasdaq rule, the NYSE proposal would

change the definition of market value for purposes of the shareholder approval rule and
eliminate the requirement for shareholder approval of issuances at a price less than book value but greater than market value.

CAQ releases 2018 audit committee transparency barometer

The Center for Audit Quality, working with Audit Analytics, has just released a new edition of its annual Audit Committee Transparency Barometer, which, over the past five years, has measured the robustness of audit committee disclosures in proxy statements among companies in the S&P Composite 1500.  The bottom line, according to the CAQ, is that the level of voluntary transparency has continued to steadily increase in most areas. The report includes several useful examples of the types of disclosure discussed.

EY offers new analysis of cybersecurity disclosures

In this report, EY discusses an analysis it conducted of voluntary cybersecurity-related disclosures in the 10-Ks and proxy statements of Fortune 100 companies (79 companies that had filed as of September 1, 2018).  The analysis notes that, not only are regulators focused on cybersecurity risk management and disclosure, but investors consider cybersecurity risk management as critical to the board’s risk oversight responsibilities and boards are increasingly engaged on the topic. The analysis found a wide variation in the depth and nature of the disclosures.