Rule Changes Mean Opportunities for 2020 Proxy SeasonJanuary 6, 2020 9:33 am
Corporate governance and compliance are always evolving. In turn, there are distinct opportunities for your company through proxy management and planning for your annual meeting. Here are five areas of potential impact to consider:
- For the first time, most public companies will be required to include a hedging disclosure in their proxy statements. If your company does not have a hedging policy, it is worth thinking about how shareholders may react to that, and if there are demonstrable steps to consider taking in that direction.
- Board diversity will continue to attract attention. The SEC has outlined the conditions under which board members’ self-identified diversity characteristics are to be included in proxy statements, which offers your company an opportunity to demonstrate attention to Environmental, Social and Governance (ESG) factors.
- More investors are putting their money where their mouth is when it comes to sustainability, making voluntary environmental and social (E&S) disclosure an opportunity to affirmatively engage shareholders. From 2016 to 2018, sustainable, responsible and impact investments (SRI) increased by 44% to more than $12 billion.
- New guidance and interpretations of existing requirements with respect to proxy voting and investment adviser guidance are in effect for the 2020 season. This additional complexity comes as the SEC has proposed new rules governing the influence of proxy advisory firms.
- Due to phased-in compliance rules, Inline XBRL will be required for many annual reports in the upcoming annual report season. This means filers can embed XBRL data directly into the document filed on EDGAR, making it possible for both people and machines to review the information without auxiliary exhibits.