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07/03/20 [UPDATED] Board Diversity

NEW:  Keith Bishop discusses a bill introduced in the California legislature that would require domestic and foreign publicly held corporations having their principal place of business in California to include individuals who are African-American, Hispanic, or Native American on their board of directors in Bill Would Impose Minimum Number Of “Directors From An Underrepresented Community”.

The New York City Office of the Comptroller discussed progress of its Boardroom Accountability program in obtaining commitments from companies with which it does business to engage in search processes that ensure that women and people of color are considered for executive and board positions in NYC Comptroller’s Boardroom Accountability 3.0 Results.

Shearman & Sterling reports that a recent amendment to Washington State corporation law require that public companies have a “gender-diverse board” by January 1, 2022 or provide board diversity disclosures in Washington State Becomes Next to Mandate Gender Diversity on Boards.

Jackson Lewis discusses measures that twelve states have enacted or are considering to enhance diversity on corporate boards in States are Leading the Charge to Corporate Boards: Diversify!

Cooley discusses research suggesting that, despite recent efforts to promote diversity on corporate boards, diversity in corporate executive positions remains low, in The sorry state of C-suite diversity.

Wachtell reports the dismissal of a lawsuit challenging California’s law mandating gender diversity on corporate boards for lack of standing in Creighton Meland v. Alex Padilla, C.A. No. 19-2288, compl. (E.D. Cal. Nov. 13, 2019), noting that plaintiff has already appealed the ruling, in Federal District Court Dismisses Challenge to Board Diversity Statute.

Davis Polk reports that the New York City Comptroller announced 75% of companies have approved stockholder proposals establishing diversity search policies seeking to increase board representation by women and people of color, submitted by the New York City Retirement Systems as part of the city’s Boardroom Accountability Project 3.0, which seeks to foster diversity in leadership of companies in which the Retirement System invests, in NYC Comptroller Stringer Reports Progress on Project to Boost Board/CEO Diversity.

Cooley reports that Creighton Meland v. Alex Padilla, C.A. No. 19-2288, compl. (E.D. Cal. Nov. 13, 2019), a lawsuit challenging the constitutionality of California’s board gender diversity statute filed by a conservative legal organization on behalf of a public company stockholder has been dismissed for lack of standing in  Federal District Court dismisses a challenge to California board gender diversity statute.

Cooley reports findings that California’s California’s SB 826 board gender diversity statute has led to significant gains in board diversity, and discusses other states that have introduced similar legislation in Will other states follow California in adopting board gender diversity mandates?

Reuters reports Goldman Sachs’ announcement that from June 30, it will only help take companies having at least one diverse member company, citing superior performance of such companies after going public, in Goldman Sachs to companies: Hire at least one woman director if you want to go public.

Spencer Stuart discusses key takeaways from the 2019 U.S. Spencer Stuart Board Index finding that boards have increasingly added new directors with diversity of gender, age, race/ethnicity and professional backgrounds, but that board turnover remains low, with new directors representing only 8% of all S&P 500 directors. 2019 U.S. Spencer Stuart Board Index.

Deloitte discusses the latest statistics on global boardroom diversity, efforts to increase gender diversity in 66 countries, and political, social, and legislative trends. Women in the Boardroom: A Global Perspective.

Keith Paul Bishop discusses a study of negative effects of California’s SB 826, imposing gender quotas on the boards of publicly traded companies headquartered in California. Business Professors Find “Large Negative Stock Market Reaction” To California’s Board Quota Law.

The New York City Comptroller calls on boards of directors to adopt a policy requiring that searches for director and officer candidates include qualified female and racially/ethnically diverse candidates, and candidates from non-traditional environments such as government, academic, or non-profit. NYC Comptroller Boardroom Accountability 3.0.

Davis Polk’s Betty Moy Huber and Paula H. Simpkins report findings from the 2019 U.S. Spencer Stuart Board Index that S&P 500 companies are accelerating the addition of women and minority directors. Spencer Stuart Shows How Boards Are Transforming.

07/03/20 [UPDATED] Stockholder Meetings

NEW:  Soundboard Governance discusses use of remote, virtual platforms to conduct stockholder meetings following recent increases in use in Key Takeaways and Best Practices from Virtual Shareholders Meetings in 2020.

Vorys discusses the use of virtual board meetings, their management, and how mitigate  additional risks they pose in Virtual board meetings and risk mitigation during Covid-19.

Broadridge provides statistics on virtual stockholder meetings it hosted between January 1 and May 22, 2020, representing a more than 6X increase over the same period in 2019, at Broadridge Virtual Shareholder Meetings (“VSMs”): Preliminary Statistics.

Wachtell discusses increases in the use of virtual annual meetings during the coronavirus meeting, and the first virtual meeting used in a proxy contest in Lessons From the Future – The First Contested Virtual Annual Meeting.

Cleary Gottlieb reports that New York’s Governor Cuomo has issued Executive Order 202.18, Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency (New York, Apr. 16, 2020), extending his previous Executive Order 202.8, Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency (New York, Mar. 23, 2020), which suspended New York’s Business Corporation Law Sections 602(a) — requiring physical stockholder meetings — and 605(a) and (b) — requiring prior notice of annual meetings and adjournments — “to the extent they require meetings of shareholders to be noticed and held at a physical location.” Cuomo Executive Order Gives New York Corporations Relief on Physical Annual Meetings.

Olshan discusses Delaware Governor Carney’s a Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat (Apr. 6, 2020), which authorized Delaware corporations to switch noticed in-person stockholder meetings to remote virtual meetings of adjourn them in favor of a later remote meeting, which it commended as preferable to a proposed emergency amendment to 8 Del. C. § 110, which would give broads discretion to postpone annual meetings irrespective of whether an emergency prevented a quorum from being convened in Delaware Emergency Order: Remote Shareholder Communication Meetings.

Sheppard Mullin discusses considerations regarding the use of virtual stockholder meetings, including hybrid meetings that can be attend either in-person or remotely, in Virtual and Hybrid Shareholder Meetings in the Era of COVID-19: What Public Companies Need to Know.

UCLA Law Professor Stephen Bainbridge discusses recent sources of authority for conducting virtual stockholder meetings, and suggests a platform offered by Broadridge for conducting virtual meetings in Conducting the Annual Shareholder Meeting during the COVID19 Pandemic.

ISS discusses SEC guidance regarding the conduct of virtual stockholder meetings in Annual General Meetings & COVID-19.

Delaware Governor John Carney, in a Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat (Apr. 6, 2020), noting that the Delaware General Corporation Law does not address certain aspects of stockholder meetings implicated by a public health emergency, provides rules governing notice of changes of physical meetings to meetings conducted by remote communications, and adjournment of scheduled meetings.

Cleary Gottlieb discusses adjournment of scheduled stockholder meetings and conversion of scheduled stockholder meetings to virtual meetings, and related notice and procedural requirements under Delaware and New York law in Coronavirus & Postponing/Adjourning Annual Meetings and Coronavirus & Virtual Annual Meetings.

07/02/20 [UPDATED] Disclosures

NEW:  Cooley discusses recent research regarding company disclosures regarding business impact of the coronavirus pandemic in Study looks at COVID-19 disclosure.

Reuters reports that a study of corporate disclosures on management of social and environmental risk required under the European Union’s 2018 Non-Financial Reporting Directive revealed “big gaps between many companies’ words and action,” in Sustainability disclosures by European companies generally poor: study.

ESG Performance and Disclosure: A Cross-Country Analysis examines the relationship between ESG factors, disclosure, and financial performance across countries with varying policies imposing ESG disclosure requirements, finding correlation between quantity of disclosures and quality of data, and no relationship between ESG and risk-adjusted returns, but a small effect on volatility.

The U.S. Chamber of Commerce discusses proposed guidelines for Environmental, Social & Governance disclosures in ESG Reporting Best Practices.

Ernst & Young discusses corporate disclosures relating to human capital and culture in How and Why Human Capital Disclosures are Evolving.

Davis Polk discusses best practice guidelines for Environmental, Social & Governance disclosures proposed by the U.S. Chamber of Commerce. Chamber of Commerce Releases Best Practices for Voluntary Environmental, Social & Governance (ESG) Disclosure.

06/30/20 [UPDATED] Delaware Courts

The Delaware Court of Chancery issued a March 6, 2020 standing order, Standing Order Concerning COVID-19 Precautionary Measures, order (Del. Ch. Mar. 6, 2020), implementing procedural precautions, particularly the use of telephonic rather than live hearings, to help prevent coronavirus transmission.  On March 11, the Delaware Division of Public Health announced the first case of coronavirus infection in the State, and on March 13, the Delaware Supreme Court issued an Order Declaring a Judicial Emergency, order (Del. Mar. 13, 2020) encouraging telephonic proceedings. The Supreme Court subsequently ordered closure of the State Courthouses to the public effective March 23, and ordered an extension of the closure to June 13, 2020. In re COVID-19 Precautionary Measures, order (Del. May 14, 2020). The Courts have established a designated webpage — The Delaware Judiciary Response to Coronavirus Disease (COVID-19) — to publish the latest developments.

NEW: Fox Rothschild notes the Tenth Anniversary, in May 2020, of the creation of the Delaware Superior Court’s Complex Commercial Litigation Division, and discusses procedural and strategic considerations for litigating business disputes in the CCLD in – Adjudicating Business Disputes in Delaware’s Complex Commercial Division.

Skadden reports that Delaware Supreme Court and Court of Chancery are operational and pending corporate litigation has continued with minimal interruption, and discusses the courts’ current status and procedures in Checking In With Delaware Courts Amid the COVID-19 Crisis.

The News Journal discusses the Delaware Supreme Court’s extension of its prior order closing the state’s courthouses to the public in Delaware courts will continue to operate virtually for now.

Law360 discusses the Delaware Court of Chancery’s changes in procedure to continue to handle corporate disputes during the coronavirus pandemic in Del. Chancery Is Uniquely Suited For Coronavirus Response.

Seyfarth Shaw discusses the responses of various Courts, including the Delware Court of Chancery, in COVID-19: Business Courts’ Response to the Crisis.

Francis Pileggi discusses closure of Delaware courthouses and postponements of hearings and other deadlines in More Closures in Delaware Due to Pandemic.

Law360 discusses court closures and the Court of Chancery’s rescheduling of proceedings and adoption of teleconferencing technology in Delaware Largely Closes All Courts For ‘Stay-At-Home’ Order.

The News Journal discusses the recent cancellations and changes in How coronavirus is impacting Delaware: Monday cancellations, schedule changes.

Law.com discusses updates with the Delaware Superior Court in Del. Superior Court Suspends Jury Trials, Chancery Court Postpones In-Person Hearings.

Fox Rothschild discusses the latest updates in Chancery Court in Chancery Hearings and Trials to be Held Telephonically for 30 Days.

Francis Pileggi discusses responses to the first confirmed case in Delaware Supreme Court Declares Judicial Emergency Due to Coronavirus.

Delaware Business Now discusses emergency status and updates to standing orders in Updated: Jury trials delayed in Delaware Superior Court as emergency order is broadened.

Fox Rothschild discusses the Courts’ actions in The Delaware Judiciary’s Response to the Coronavirus (COVID-19).

The News Journal discusses current coronavirus-related Orders and the status of the Courts in Coronavirus and Delaware courts: What jurors, others need to know.

Francis Pileggi discusses current standing orders and other coronavirus-related concerns in Delaware Courts’ Response to the Coronavirus.

Morris James comments on the precautionary concerns in Delaware Courts Issue Standing Orders Addressing Coronavirus Concerns.

Bloomberg Law comments on this matter of public health in the freely-accessible Delaware’s Chancery Increasing Dial-In Court Due to Coronavirus.

$$$ Law360 advises the public of the situation from behind a paywall in Chancery Eyes Remote Hearings To Stem Coronavirus Risk.

03/09/20 [UPDATED] State Business Courts

NEW: The Casper Star Tribune reports that the Wyoming legislature has appropriated funds for the formation of a court of chancery, scheduled to become functional in 2022 in Casper gets a new court.

The State Bar of Wisconsin reports on the success of a three-year Business Court Pilot Project initiated by the Wisconsin Supreme Court in 2017 in Commercial Litigation: Business Court Pilot Project Still Open for Business.

Stoll Keenon Ogden reports the Kentucky Supreme Court’s approval of the creation of a designated business court in Kentucky’s First Business Court to Launch January 1, 2020.

02/24/20 Stockholder Proposals

Majority Action criticizes the current structure of JP Morgan’s board, and specifically a director who serves as the board’s Lead Independent Director, as unlikely to promote oversight and effectively manage climate change risk, recommending that stockholders support a proposal to adopt an independent Board Chair and to oppose re-election of the board’s current Lead Independent Director in Reforms to Board Composition and Independence and Climate Competent Governance.