Results for: Nasdaq diversity
California Secretary of State publishes “report” about SB 826, California’s new board gender diversity mandate—UPDATED
This post updates an earlier post on this topic to reflect information from a conversation with a knowledgeable representative of the California Secretary of State’s office. He was able to provide some insight about their process and clarify why some apparent inconsistencies were not really inconsistent.
As reported on thecorporatecounsel.net blog, the California Secretary of State has published on its website two spreadsheets, dated July 1, 2019, which apparently together constitute its mandated “report” under SB 826, California’s new board gender diversity mandate. The first spreadsheet identifies 537 companies that the Secretary’s office views as subject to SB 826. The next spreadsheet identifies 184 companies that were apparently in compliance with the board gender diversity mandate as of that date. According to the “methodology,” this data was based on information available for the review period from January 1 to June 30, 2019 in California and SEC filings, as well as information from the NYSE, Nasdaq and miscellaneous other online resources. An updated report will be published on March 1, 2020.
California Secretary of State publishes “report” about SB 826, California’s new board gender diversity mandate
As reported on thecorporatecounsel.net blog, the California Secretary of State has published on its website two spreadsheets, dated July 1, 2019, which apparently together constitute its mandated “report” under SB 826, California’s new board gender diversity mandate. The first spreadsheet identifies 537 companies that the Secretary’s office views as subject to SB 826. The next spreadsheet identifies 184 companies that were apparently in compliance as of that date. According to the “methodology,” this data was based on information available for the period from January 1 to June 30, 2019 in California and SEC filings, as well as information from the NYSE, Nasdaq and miscellaneous other online resources. An updated report will be published on March 1, 2020. My own extremely brief spotcheck, however, revealed that these lists are not exactly, um, accurate. (But see this update.)
California mandates quotas for board gender diversity—will it fuel a movement?
As discussed in this PubCo post from February, a California bill, SB 826, addressing the issue of board gender diversity, has been making its way through the California legislature. On Sunday, Governor Jerry Brown signed that bill into law. Interestingly, one factor apparently influential in his decision to sign the bill was the recent hearing in Washington. As you may have heard, the legislation requires, as Brown phrases it, a “representative number” of women on boards of public companies, including foreign corporations with principal executive offices located in California. Will other states now follow suit? Will corporations incorporated in other states observe its provisions or challenge the application of this California law?
Fifth Circuit dismisses NCPPR appeal of Corp Fin’s Rule 14a-8 no-action relief
You might recall that, in 2023, the National Center for Public Policy Research submitted a shareholder proposal to The Kroger Co., which operates supermarkets, regarding the omission of consideration of “viewpoint” and “ideology” from its equal employment opportunity policy. Kroger sought to exclude the proposal as “ordinary business” under Rule 14a-8(i)(7), and Corp Fin concurred. After Corp Fin and the SEC refused reconsideration of the decision, NCPPR petitioned the Fifth Circuit for review. The SEC moved to dismiss the appeal. But after the NCPPR filed its appeal, Kroger filed its proxy materials with the SEC and included the NCPPR proposal in the proxy materials to be submitted for a shareholder vote. The proposal received less than two percent of the vote. Now, a three-judge panel of the Fifth Circuit has issued its opinion, dismissing the case for lack of jurisdiction; Judge Edith Jones dissented.
SEC’s Spring 2024 agenda delays most actions until 2025
As reported by Bloomberglaw.com, during an interview in February on “Balance of Power” on Bloomberg Television, SEC Chair Gary Gensler said that he does not intend to “rush” the SEC’s agenda “to get ahead of possible political changes in Washington,” that is, in anticipation of the November elections. According to Bloomberg, Gensler insisted that he’s “‘not doing this against the clock….It’s about getting it right and allowing staff to work their part.’” The SEC has just posted the new Spring 2024 Agenda and, looking at the target dates indicated on the agenda, it appears that Gensler is a man true to his word. The only new item (relevant to our interests here) slated for possible adoption this year is a distinctly apolitical proposal about EDGAR Filer Access and Account Management. And, while a few proposals are targeted for launch (or relaunch) this year—two related to financial institutions and, notably, a proposal for human capital disclosure—most are also put off until April next year—post-election, that is, when the agenda might look entirely different. (Of course, the SEC sometimes acts well in advance of the target.) According to the SEC’s preamble, the items listed in the Regulatory Flexibility Agenda for Spring 2024 “reflect only the priorities of the Chair.” In addition, information on the agenda was accurate as of May 1, 2024, the date on which the SEC staff completed compilation of the data. In his statement on the agenda, Gensler said that “[i]n every generation since the SEC’s founding 90 years ago, our Commission has updated rules to meet the markets and technologies of the times. We work to promote the efficiency, integrity, and resiliency of the markets. We do so to ensure the markets work for investors and issuers alike, not the other way around. We benefit in all of our work from robust public input regarding proposed rule changes.”
The Chamber and NCPPR file brief challenging SEC climate disclosure rule
As you probably recall, on March 6, the SEC adopted final rules “to enhance and standardize climate-related disclosures by public companies and in public offerings.” (See this PubCo post, this PubCo post, this PubCo post, and this PubCo post.) Even though, in the final rules, the SEC scaled back significantly on the proposal—including putting the kibosh on the controversial mandate for Scope 3 GHG emissions reporting and requiring disclosure of Scope 1 and/or Scope 2 GHG emissions on a phased-in basis only by accelerated and large accelerated filers and only when those emissions are material—all kinds of litigation immediately ensued. Those cases were then consolidated in the Eighth Circuit (see this PubCo post) and, in April, the SEC determined to exercise its discretion to stay the final climate disclosure rules “pending the completion of judicial review of the consolidated Eighth Circuit petitions.” There are currently nine consolidated cases—with two petitioners, the Sierra Club and the Natural Resources Defense Council, having voluntarily exited the litigation (see this PubCo post), and a new petition having just been filed by the National Center for Public Policy Research, a familiar presence in various cases, such as the legal challenges to the Nasdaq board diversity rules (see this PubCo post), state and corporate DEI initiatives (see this PubCo post and this PubCo post), and litigation over shareholder proposals (see this PubCo post). Petitioners have recently begun to submit briefing. One that has been made available is the brief that was filed on behalf of the U.S. Chamber of Commerce, Texas Association of Business, Longview Chamber of Commerce and the National Center for Public Policy Research.
SEC’s Fall 2023 Reg-Flex Agenda is out—climate disclosure rules delayed again
The SEC’s Fall 2023 Reg-Flex Agenda—according to the preamble, compiled as of August 22, 2023, reflecting “only the priorities of the Chair”—has now been posted. And it’s Groundhog Day again. All of the Corp Fin agenda items made an appearance before on the last agenda and, in most cases, several agendas before that. Do I hear a sigh of relief? Of course, the new agenda is a bit shorter than the Spring 2023 agenda, given the absence of regulations that have since been adopted, including cybersecurity risk governance (see this PubCo post) and modernization of beneficial ownership reporting (see this PubCo post). At first glance, the biggest surprise—if it’s on the mark, that is—is that the target date for final action on the SEC’s controversial climate disclosure proposal has been pushed out until April 2024. Keep in mind that it is only a target date, and the SEC sometimes acts well in advance of the target. For example, the cybersecurity proposal had a target date on the last agenda of October 2023, but final rules were adopted much earlier in July. I confess that my hunch was that we would see final rules before the end of this year, but adoption this year looks increasingly unlikely (especially given that the posted agenda for this week’s open meeting does not include climate). Not surprisingly, there’s nothing on the agenda about a reproposal of the likely-to-be vacated (?) share repurchase rules, although, at the date that the agenda was compiled, the possibility of vacatur was not yet known. (See this PubCo post.) Describing the new agenda, SEC Chair Gary Gensler observed that “[w]e are blessed with the largest, most sophisticated, and most innovative capital markets in the world. But we cannot take this for granted. Even a gold medalist must keep training. That’s why we’re updating our rules for the technology and business models of the 2020s. We’re updating our rules to promote the efficiency, integrity, and resiliency of the markets. We do so with an eye toward investors and issuers alike, to ensure the markets work for them and not the other way around.”
Will the SEC’s shadow trading theory fall to SCOTUS’s major questions doctrine?
In August 2021, the SEC filed a complaint in the U.S. District Court charging Matthew Panuwat, a former employee of Medivation Inc., an oncology-focused biopharma, with insider trading in advance of Medivation’s announcement that it would be acquired by a big pharma company. But it wasn’t your average run-of-the-mill insider trading case. Panuwat didn’t trade in shares of Medivation or shares of the acquiror, nor did he tip anyone about the transaction. No, according to the SEC, he engaged in what has been referred to as “shadow trading”; he used the information about his employer’s acquisition to purchase call options on another biopharma, which the SEC claimed was comparable to Medivation. (See this PubCo post.) Since then, we’ve seen the usual moves on the chess board (discussed briefly below). But what’s particularly interesting, as Alison Frankel pointed out in Reuters, is the amicus brief filed by the Investor Choice Advocates Network, a self-described “nonprofit, public interest organization focused on expanding access to markets by underrepresented investors and entrepreneurs.” In its brief, ICAN contended that the SEC’s invocation of the novel “shadow-trading” theory made this a “major questions” case—a judicial torpedo that we might begin to see fired with some regularity.
You must be logged in to post a comment.