Communications consultant Kekst CNC recently announced the results of its analysis of voting recommendations from four major LLMs across nearly 50 recent proxy fights, comparing those recommendations with proxy advisor recommendations and actual voting outcomes. You might be surprised to hear that “AI is meaningfully more likely to articulate support for activists than traditional proxy advisors – as well as real proxy contest outcomes.” Specifically:

– AI recommended for the activist’s nominees more often than the company’s (45% of cases versus 37%)

– AI recommended for the activist far more often than the two major proxy advisory firms, with ISS and Glass Lewis recommending the company’s nominees in about 55% of the cases and for the activist in 36% and 42% of the cases, respectively

– The activist prevailed in final voting tallies only 14% of the time

From the investor perspective, Pennant AI founder Ryan Nowicki Stewart weighs in in this LinkedIn post, saying:

“AI favors activists 45%” is the wrong scoreboard. What matters is whether AI can faithfully reflect your firm’s voting policy, view and voice. An agent tuned for a long-horizon index steward might vote differently from one tuned for an event-driven fund. Default settings produce default answers, and investors’ unique voices deserve better.

But from a company perspective, this info is helpful as they consider how shifting voting dynamics might influence their outcomes. These LLMs weren’t fed any particular voting policy, so the way these recommendations came out in this test might be most indicative of what a retail holder would receive from an LLM. Complicating things, each LLM seemed to have different focus areas and biases (and even the same query yielded different results from the same LLM some of the time). For example:

Claude frequently values the relevant experience of dissident director nominees and the track record of the activists. Gemini is more likely to appreciate management’s desire to avoid disruption at critical moments – or call out when independent shareholder accountability is needed to force change.

– Meredith Ervine 

Despite the different approaches of the four tested LLMs, Kekst CNC was still able to analyze the sources most commonly cited by these models and share some generally applicable communications takeaways for public companies. For example, these LLMs didn’t assign the same weight to arguments and resources that have historically been highly influential.

[T]wo traditionally core arguments have only relatively moderate influence for AI, each seeing around 25% frequency in promanagement votes:

– Lack of credibility or experience attributed to the activist fund itself (separate from its nominees). It is particularly worth highlighting that in very few cases did AI cite procedural or tactical accusations against activists – such as suspicious timing of actions taken, trading activity/disclosures, or track record of unconstructive engagement with the board.

– Expertise and track record of the board’s nominees. The vast majority of the time, AI did not attempt to compare the two sides’ nominees. In cases where director nominee quality was a factor, the rationale was either rounding out skills central to the company’s strategy, or a desire to avoid disruption of the board’s oversight of ongoing progress.

In addition, certain arguments frequently relied upon by issuers to question the motives of activists hold minimal weight among the LLMs. The short-term nature of an activist’s position, or the activist not representing the true interests of shareholders, was mentioned in just 5% of pro-management votes.

And, it’s not just what you say, it’s how you say it – and possibly even how many times.

The single most important channel to articulate arguments that affect AI recommendations is the press release [. . .] Releases represented nearly one-third of all citations informing AI responses – whether through direct links to the newswires through which they were issued, or through full reprints on automated websites. Notably, the analysis did not uncover obvious volume “fatigue” among engines, i.e., consuming a maximum number of press releases to inform its recommendations. The breadth of attribution was typically a function of the depth of the engine’s analysis – Gemini’s analyses are more detailed, for example, while Perplexity’s are shallower. Sourcing can also change meaningfully when running the same search multiple times or by different users.

A valuable subject for further study and testing is whether companies and activists should consider increasing their rate of press release issuance in contested situations to “flood the zone” with content deemed most credible by AI engines.

Less impactful on AI decision making are the “fight deck” and major business publications, which seemed to be drowned out by the “flood of digital content [that] exists in the public domain that both dwarfs volume of ‘sophisticated’ media, and continues to hold meaningful credibility by LLMs.”

This a16z Substack points out that proxy advisor influence may be waning (and the vote outcome goes the way of the activist only 14% of the time). That said, the Kekst CNC report says not to write off proxy advisors just yet:

The approach of treating AI as proxy advisors should not downplay the critical role of the traditional proxy advisors, which remain broadly used among institutions. The LLMs themselves certainly do not underestimate the value of ISS and Glass Lewis: well more than half of all chatbot responses noted their outcomes as a dispositive factor. All sides in a contest should prioritize highlighting favorable recommendations and supporting language from the proxy advisors, through press releases and any other channels that could be influential in LLM analysis.

This report is focused on proxy fights, but AI use is impacting uncontested elections and other proposals. Yesterday on CompensationStandards.com, Liz blogged about how say-on-pay outcomes are impacted by investors’ use of AI.

We usually cover “big A” activism on DealLawyers.com, so head there for more info on activism. For more on the latest and greatest proxy voting and engagement trends, see our “Proxy Season” Practice Area here on TheCorporateCounsel.net.

– Meredith Ervine 

The growing list of public companies proposing to move from Delaware to another jurisdiction of incorporation indicates that “DExit” remains a live topic among boards and management teams. In our latest “Timely Takes” podcast,  FTI Consulting’s Garrett Muzikowski & Andrea Hearon joined John to discuss a variety of legal and business issues that companies considering migrating out of Delaware should consider.  Topics addressed in this 25-minute podcast include:

– Pros and Cons of Reincorporating Outside of Delaware
– What Boards Often Misunderstand About the DExit Decision
– Reasons for DExit Proposals and Outcomes of Stockholder Votes
– Emerging Patterns in Proxy Advisor and Institutional Investor Responses
– How Boards Should Approach Texas’s Optional Provisions
– Importance of a Communications Strategy
– Will DExit Become Mainstream or Remain a Niche Response?

As always, if you have insights on a securities law, capital markets or corporate governance issue, trend or development that you’d like to share in a podcast, we’d love to hear from you. You can email me and/or John at mervine@ccrcorp.com or john@thecorporatecounsel.net.

– Meredith Ervine 

Earlier this month, Broadridge announced that it is extending its governance platform to support digital assets – which means that public companies and investors can manage proxy voting, corporate actions and disclosures across both traditional and tokenized securities with existing platforms and workflows. And this is not theoretical. Galaxy Digital (the first U.S. public company to issue native tokenized equity on a major public blockchain) will use ProxyVote for its annual meeting scheduled for May 28. Its CEO says, “With Broadridge, we’re combining the credibility of traditional market infrastructure with the advantages of blockchain to deliver a more efficient model for shareholders.” Here’s more from the announcement:

The platform introduces corporate actions for tokenized assets, starting with proxy voting, which will be recorded on Broadridge’s Avalanche based L1 and then distributed across multiple blockchains. Integrating Broadridge’s ProxyVote platform into digital wallets, investors can receive materials, confirm their holdings and submit votes, all with a transparent and verifiable record.

To simplify the annual meeting process for public companies issuing tokenized shares alongside traditional shares, Broadridge’s solution consolidates voting across registered, beneficial, and tokenized holdings into a single view for issuers. This “single pane of glass” approach removes fragmentation and enables consistent oversight of governance activity regardless of how assets are held. The platform is designed to support all forms of tokenization, including both issued-sponsored tokenized securities and third party-sponsored tokenized securities, ensuring compatibility with evolving market models.

Today’s announcement underscores Broadridge’s commitment to accelerating the adoption of digital assets across the financial services landscape. Building on its industry-leading role in tokenizing US$8 Trillion in assets per month, Broadridge also enables on-chain proxy voting and governance, digital asset post-trade infrastructure, and the scaling of digital asset capabilities across multiple asset classes. Through these innovations, Broadridge is helping traditional financial institutions unlock the next era of digital asset investing.

Galaxy’s tokenized Class A common stock is a small percentage of its outstanding shares (13,404 of 191.8 million Class A shares outstanding), but these shares get special treatment in the proxy. The company added some disclosure to explain their unique circumstances:

Tokenized Stockholders. Holders of Tokenized GLXY will receive voting instructions via email. Such stockholders may vote through the Tokenized ProxyVote website referenced in the email by connecting the wallet(s) that hold their Tokenized GLXY to the website, making their voting elections, and cryptographically signing their votes via their wallet. If a tokenized stockholder is unable to connect their wallet(s), they may instead vote via www.ProxyVote.com using their control number included in the email.

If you are a holder of Tokenized GLXY, in addition to the four options above, you can also vote by the following method: through the Tokenized ProxyVote website at www.token-vote.com, 24 hours a day, seven days a week, until 9:00 a.m. Eastern Time on May 27, 2026, by connecting the wallet(s) that hold your Tokenized GLXY to the website and cryptographically signing your votes via your wallet(s).

– Meredith Ervine 

In early April, we shared that two of the lawsuits filed by proponents against companies that excluded shareholder proposals from their proxy statements without traditional no-action relief from the Corp Fin Staff remain ongoing. In one, the judge had denied the preliminary injunction request because the proponent, As You Sow, had not shown a likelihood of prevailing on the merits under Rule 14a-8(i)(7)’s ordinary business basis. Now, in the other ongoing lawsuit (involving a proposal submitted to a retailer by the Comptroller of the State of New York requesting assessment of deforestation risks in the company’s private-label brands), the judge last week granted the proponent’s request for a preliminary injunction and denied the company’s motion to dismiss. (Hat tip to Law Prof Ann Lipton and her post on LinkedIn.) 

This decision also turned on the ordinary business basis for exclusion. Unlike As You Sow v. Chubb, where the District Court for the District of Columbia said, “the Parties have yet to explore why the Court should find [the Staff Legal Bulletins] to be persuasive expositions of Rule 14a–8(i)(7)’s meaning,” here the District Court for the District of Massachusetts is more explicit about which Commission and Staff guidance it was relying on — citing Staff Legal Bulletin 14H. This is an old one, so here’s what Broc wrote about it back in 2015:

The SLB also touches on the Rule 14a-8(i)(7) litigation playing out in Trinity Wall Street v. Wal-Mart by disagreeing with how the majority in the Third Circuit applied the “significant policy exception” to the ordinary business exclusion. More specifically, Corp Fin didn’t endorse the majority’s “new two-part test, concluding that ‘a shareholder must do more than focus its proposal on a significant policy issue; the subject matter of its proposal must ‘transcend’ the company’s ordinary business.’” As noted in this Cooley blog, the Third Circuit’s opinion requested Corp Fin’s views in this area – and now they have it…

Specifically, the opinion says:

The Court is persuaded by the approach advanced by the concurring opinion in Trinity and the Staff Legal Bulletin [14H]. The 1998 Release clearly states that “proposals . . . focusing on sufficiently significant social policy issues . . . generally would not be considered to be excludable, because the proposals would transcend the day‑to‑day business matters.” 61 Fed. Reg. at 29108 (emphasis added). Nowhere does the SEC’s interpretation of Rule 14a‑8 indicate that the proposal must also be “divorced” from the day‑to‑day business operations of a company, as the Trinity majority contends.

With the proper interpretive approach of Rule 14a‑8(i)(7) resolved, the Court addresses whether the Fund’s Proposal “focus[es] on sufficiently significant social policy issues” and thereby falls outside the scope of the ordinary‑business exclusion. Here, the Proposal requests that BJ’s “conduct an assessment of risks of deforestation associated with its private‑label brands within one year and provide a report summarizing the results.”  The Fund’s supporting statements elaborate on the larger policy issue of deforestation, noting that “[m]ore than half of global GDP is moderately or highly dependent on nature” and that “deforestation threatens to disrupt the reliability of the natural ecosystems and the global economy.” The Proposal further ties this social policy issue back to BJ’s private‑label brands, warning that BJ’s failure to evaluate the deforestation risks of its private‑label brands has become “increasingly consequential” as BJ’s “expect[s] to increase the sales penetration of [its] private‑label items,” which “currently represent 25% of annual sales.” The focus of the Proposal is clearly on the deforestation risks arising from BJ’s private‑label brands, and the mere fact that the Proposal touches on ordinary business matters (i.e., BJ’s supply‑chain) does not change the nature of this focus.

Here’s something I shared on DealLawyers.com on Friday:

Yesterday, the SEC posted notice & immediate effectiveness of a Nasdaq proposal that increases SPAC initial listing requirements. Here’s the background from the notice:

Historically, Acquisition Companies chose to list on the Nasdaq Capital Market instead of the Nasdaq Global Market, in part, because it had lower fees and lower initial distribution requirements. More recently, certain Acquisition Companies have sought to list on the Nasdaq Global Market.

In particular, Nasdaq notes an SEC statement about accounting treatment by Acquisition Companies and subsequent and more recent accounting comments to Acquisition Companies have resulted in some Acquisition Companies adopting different accounting practices and, as a result, having insufficient equity to qualify for initial listing on the Nasdaq Capital Market. Based on Nasdaq’s experience listing Acquisition Companies on the Global and Capital Market tiers, Nasdaq proposes to modify Listing Rules 5405 and 5505 to increase the listing requirements for Acquisition Companies.

The notice also says that acquisition companies generally use the “Market Value” standards for those markets — that is the Market Value Standard for the Global Market (because the redeemable shares issued in the IPO means insufficient stockholders’ equity for the other standards) or the Market Value of Listed Securities Standard for the Capital Market (because they don’t meet the operating history and net income from continuing operations requirements of the other standards). With that in mind, Nasdaq is:

– Modifying Listing Rule 5405(b)(3)(A) to increase the minimum Market Value of Listed Securities that an Acquisition Company must have to at least $100 million for the Nasdaq Global Market; and

– Modifying the Market Value of Listed Securities Standard to exclude an Acquisition Company from being able to list under that rule, amending Listing Rule 5505(a)(3) to require that an Acquisition Company listing on the Capital Market must have a minimum of 400 public shareholders and adopting new requirements for Acquisition Companies listing on the Capital Market in Listing Rule 5505(b)(4), which will require:

• Market Value of Listed Securities of $75 million (current publicly traded Companies must meet this requirement and the $4 bid price requirement for 90 consecutive trading days prior to applying for listing if qualifying to list only under the Market Value Standard);
• Market Value of Unrestricted Publicly Held Shares of at least $20 million (for a Company listing in connection with an initial public offering, including through the issuance of American Depository Receipts, this requirement must be satisfied from the offering proceeds); and
• At least four registered and active Market Makers.

In support of these amendments, Nasdaq points out:

This increased Market Value of Listed Securities requirement for the listing of an Acquisition Company on the Global Market is the same as the current Market Value of Listed Securities requirement under the Alternative Initial Listing Requirements for Acquisition Companies listing pursuant to Listing Rule 5406 on the Nasdaq Global Market. This proposal is also consistent with the approach of the NYSE. However, unlike Acquisition Companies listing under Rule 5406 or the NYSE requirements, which can list with 300 shareholders, an Acquisition Company listing under Rule 5405(b)(3)(A) would continue to be required to have 400 shareholders [. . .]

These new requirements for listing of an Acquisition Company on the Capital Market are substantially similar to the current requirements for listing of an Acquisition Company on the Nasdaq Global Market. This proposal is also consistent with the requirements of NYSE American.

– Meredith Ervine 

Proxy advisors are back in the crosshairs, as a follow-up to the executive order that Dave blogged about in December. Earlier this month, in response to the executive order, the Department of Labor published a technical release – TR 2026-01 – that says that certain services that proxy advisors provide may cause them to be “fiduciaries” with respect to ERISA plans.

I don’t claim to know a whole lot about ERISA, but one thing I do know is that being deemed a plan fiduciary is a pretty onerous prospect. This Sidley memo summarizes key takeaways from the new guidance:

– Proxy Advisory Firms May Be Functional Fiduciaries. The DOL cautions that proxy advisory firms may be considered “functional fiduciaries” under ERISA sections 3(21)(A)(i) and (ii) if they exercise authority or control of the exercise of shareholder rights attributable to shares that constitute “plan assets” under ERISA or provide advice on how to exercise proxy rights attributable to shares owned by ERISA plans.

– Proxy Advisory Firms That Exercise Control or Authority Over the Exercise of Shareholder Rights Will Be Functional Fiduciaries. The DOL confirmed that proxy advisory firms that have discretion or control over shareholder rights attributable to ERISA plans (e.g., proxy advisory firms that control voting policies or the casting of votes) will be considered functional fiduciaries under ERISA section 3(21)(A)(i).

– Proxy Advisory Firms Generally Are Investment Advice Fiduciaries Under the Five-Part Test. The DOL confirmed that proxy advisory firms will likely be considered investment advice fiduciaries under the DOL’s five-part test (discussed in more detail in our prior Update). Under the five-part test, a person is a fiduciary only if (1) they render advice to a plan as to the value of securities or other property or make recommendations as to investing in, purchasing, or selling securities or other property; (2) on a regular basis; (3) pursuant to a mutual agreement, arrangement, or understanding with the plan that (4) the advice will serve as a primary basis for investment decisions with respect to the plan’s assets; and (5) the advice will be individualized based on the particular needs of the plan. With the caveat that the ultimate analysis depends on the specific facts and circumstances, the DOL takes the position that proxy advisory firms that provide individualized advice to ERISA plans as to how to exercise shareholder rights on a regular basis will generally satisfy the five-part test.

– State Law Preemption. In light of a number of recent state laws seeking to regulate proxy advisory firms, the DOL provided guidance on the application of ERISA’s preemption clause to state laws mandating disclosure by proxy advisory firms when they make recommendations for reasons other than maximizing returns. The release provides that a requirement that proxy advisory firms disclose when their research or recommendations take nonfinancial factors into consideration would not sufficiently affect ERISA plan administration because proxy advisors are already precluded from taking actions with respect to ERISA plans that would require such disclosures. As such, the DOL concludes that such a law would not be preempted.

This Ropes & Gray memo is recommending that asset managers and ERISA plan fiduciaries consider taking the following steps:

1. Audit existing proxy advisor arrangements against each prong of the DOL’s five-part investment advice test as interpreted under TR 2026-01 to determine whether the arrangement may create an inadvertent fiduciary relationship — and whether restructuring to avoid fiduciary status is appropriate;

2. Assess potential exposure under ERISA § 405 (as a co-fiduciary) where the proxy advisor may be deemed to be a fiduciary; and

3. Monitor for future rulemakings that may amend the regulations to take a harderline on the use of non-pecuniary factors and the tiebreaker test.

I can’t say whether this will cause investment managers to rely less on proxy advisors or affect the broader voting advice ecosystem – but it does seem like another instance of tightening the screws. The Ropes & Gray memo notes that the guidance could be a prelude to a rule proposal.

– Liz Dunshee

Earlier this week, the US Supreme Court heard arguments in Sripetch v. SEC, which could resolve a split between the 2nd and 9th Circuits about limits on the SEC to use disgorgement as a remedy in enforcement cases. This Bloomberg article explains the importance of this remedy to the agency:

The dispute will shape a panoply of SEC cases in which victims aren’t easy to pinpoint, from low-profile record-keeping violations to major insider trading allegations. The SEC used disgorgement to secure orders for more than $6 billion in fiscal 2024 and almost $11 billion last year.

This O’Melveny memo summarizes the lead-up to the case and notes it’s the third time in the past decade that SCOTUS has addressed the SEC’s equitable remedies. According to the Bloomberg article, the Court seemed skeptical about taking disgorgement off the table, even though tracking down specific victims of securities fraud is challenging (if not impossible). Here’s an excerpt:

But even Justice Clarence Thomas, who had voted to bar the use of disgorgement altogether in 2020, indicated he isn’t a sure bet this time around. Thomas told a lawyer arguing for new restrictions that “the world has changed in this area” because of a statute Congress passed in the aftermath of the 2020 ruling.

Although Monday’s session wasn’t definitive, the court spent less than a half hour questioning the Justice Department lawyer representing the SEC in its bid for broad disgorgement powers. That’s potentially a positive sign for the government from a court that often spends more than an hour peppering government lawyers with skeptical queries.

We’ll stay tuned for the opinion…

– Liz Dunshee

One person who I’ve missed seeing and hearing from at this year’s various events is Cicely LaMothe. I was delighted that she was able to join Dave Lynn and me for our latest episode of our podcast, “Mentorship Matters with Dave & Liz.”

As our readers may recall, Cicely retired from the SEC in December after 24 years of service. During her time at the agency, Cicely served in many senior leadership roles, including as Acting Director of Corp Fin. Listen to this 24-minute episode to hear:

1. Cicely’s leadership experiences at the SEC, including favorite memories.

2. The role of mentorship in Cicely’s career trajectory and achievements.

3. How mentorship dynamics evolve as your career advances, and how to keep growing through these changes.

4. Maintaining positive relationships as practitioners move between the public and private sectors.

5. Valuable mentorship advice for anyone looking to progress in the corporate and securities compliance field.

Thank you to everyone who has been listening to the podcast! If you have a topic that you think we should cover or guest who you think would be great for the podcast, feel free to contact Dave or me by LinkedIn or email.

– Liz Dunshee

As I noted just yesterday, disclosure rationalization is an important aspect of SEC Chair Paul Atkins’ goal to “transform” the SEC rulebook to help Make IPOs Great Again. To that end, we’re tracking responses to his call for comments on Regulation S-K – which is where most of the line-item disclosure requirements are spelled out.

The SEC has received over 100 comments so far! These include letters from individual investors, researchers, and many other key market participants and trade groups, such as:

– Business Roundtable

– Center for Audit Quality

– Council of Institutional Investors

– International Corporate Governance Network

– Nasdaq – Also see Nasdaq’s blog with 5 key takeaways from their letter

– Society for Corporate Governance

– US Chamber of Commerce

One thing that struck me when scanning through the letters is that there is not much across-the-board consensus on what the SEC should do and how onerous and detailed the disclosure requirements should be. That’s not too surprising given the diverse perspectives of the groups submitting comments – the corporate issuer crowd tends to want to go one way and the investor crowd tends to want to go the other way. But it does underscore why the SEC is trying to check all the procedural and informational boxes during its current rulemaking endeavors.

This Goodwin blog highlights topics that many of the letters address and the divergent views that are presented. Here are selected excerpts (check out the entire blog, co-authored by our very own Dave Lynn, for more details):

1. Principles Based Disclosure Versus Prescriptive Disclosure – Some commenters advocate for grounding disclosure requirements in materiality and urge the SEC to adopt a principles-based approach that would allow companies to determine, based on their specific facts and circumstances, whether particular information is material to investors.

Commenters who oppose a shift to the principles-based approach counter that increased company discretion creates a risk of under-disclosure.

Several commenters support a hybrid approach, proposing the elimination of clearly immaterial or redundant disclosure requirements while maintaining specified disclosure requirements in key areas.

2. Specific Line-Item Recommendations – The disclosure framework debate is also found in comments regarding specific line-item disclosure requirements under Regulation S-K, where views of commenters diverge on whether particular requirements should be reduced, eliminated, or expanded. The divide is sharpest between those advocating for a streamlined, materiality-focused disclosure framework and those emphasizing the importance of maintaining or enhancing standardized requirements to support comparability and investor protection.

3. Safe Harbors and Liability Reform – Commenters expressed differing viewpoints on whether securities law liability drives the prevalence of boilerplate and immaterial disclosure.

Some commenters argue that litigation risk is a primary driver of defensive disclosure practices, contending that the risk of securities fraud claims encourages companies to include generic, overly broad or immaterial information to mitigate liability exposure. As a result, disclosure is often drafted to satisfy legal requirements rather than to communicate material information. To address these concerns, these commenters advocate for expanded safe harbors and interpretive guidance, including protections for omission of widely known or non-company-specific risks; enhanced coverage for forward-looking statements; and broader, materiality based safe harbors.

Other commenters oppose the creation or expansion of safe harbors from anti-fraud liability, arguing that such liability is fundamental to the integrity of the disclosure regime.

4. ESG and Governance Disclosures – Several comment letters raise the concern that certain Regulation S-K requirements function as indirect regulation rather than as a means for providing material disclosure to investors. This tension is particularly acute with respect to ESG-related disclosures, in which commenters expressed differing views as to the purpose of these disclosure requirements.

5. Scaling and Differentiation by Company Size and Industry – A recurring theme in the comments is whether Regulation S-K should apply uniformly to all companies or whether the disclosure requirements should be scaled to a company’s size, stage of development, or industry.

Several commenters argue that smaller and newly public companies face disproportionate compliance burdens under the current disclosure requirements. These commenters call for scaling the disclosure framework based on company size, with specific proposals including raising filer thresholds, exempting smaller issuers from certain rules (e.g., executive compensation, cybersecurity, and climate-related disclosures), and reducing reporting frequency.

Other commenters express concern that scaled or industry-specific disclosure requirements can negatively affect comparability and investor protection. . . . These commenters recommend streamlining disclosure requirements for all companies to avoid information asymmetry and loss of comparability.

6. Modernization of Disclosure Format – Commenters also addressed the format and delivery of public company disclosures, particularly regarding whether the SEC should expand, maintain, or scale back requirements for structured, machine-readable data such as XBRL.

Some commenters express concerns about the cost and complexity of structured data, recommending substantially scaling back or eliminating XBRL tagging. Proposals include limiting Inline XBRL to primary financial statement line items, eliminating narrative block tagging, and exempting small reporting companies and nonaccelerated filers entirely.

Other commenters emphasize the importance of structured, machine‑readable data for enabling comparability, automation, and AI‑driven analysis. They recommend expanding XBRL to currently untagged narrative sections, including MD&A, risk factors, and qualitative proxy disclosures, arguing that limiting XBRL would increase reliance on manual data extraction and reduce comparability and reliability.

I know a lot of people in our community are investing many hours and brain cells in making suggestions, so it really will be interesting to see how the SEC’s proposal – if and when it’s issued – reflects the feedback. I’m pleased to have worked with my Cooley teammates on this letter – see this blog for a summary of the recommendations – and I am also pleased that it’s now in the SEC’s court!

– Liz Dunshee