You can still register for our popular conferences – the “2026 Proxy Disclosure & 23rd Annual Executive Compensation Conferences” – to be held in person in Orlando and virtually nationwide on Monday, October 12th – Tuesday, October 13th. With so much rulemaking and guidance coming out of the SEC right now, you won’t want to miss hearing practice pointers and strategies to track what might change – and how to implement new frameworks.
For more details, check out the agenda – we’ll kick things off with a conversation with Christina Thomas, who is Deputy Director of the SEC’s Division of Corporation Finance & Chief Advisor on Disclosure, Policy, and Rulemaking. From there we’ll dive into proxy season insights, the fate of shareholder proposals, the shareholder activist landscape and more. Our speakers are fantastic and this is truly a “can’t miss” event for anyone involved with proxy disclosures, corporate governance, and executive pay.
Conference attendees will not only get access to our unique & valuable course materials – you’ll also get access to the conference archives for a year after the event, so that you can refer back to all of the practical nuggets when you’re grappling with your executive pay decisions, disclosures and engagements. Register today online! You can also contact us at info@CCRcorp.com or by calling 1-800-737-1271.
The question of who should lead the board can be a sensitive topic to weigh in on. Although it depends on the company and circumstances, it can help to know what others are doing. According to a recent report from The Conference Board – in collaboration with ESGAUGE, KMPG, Russell Reynolds and the University of Delaware – an increasing number of companies have separated the CEO and chair roles since 2020, but it is still a less common approach than “CEO duality” – especially among the largest companies.
The report assessed board leadership structures in the S&P 500 and Russell 3000. Here are other key takeaways:
• Large-cap companies are more likely to have a combined CEO/chair. In 2025, the current CEO served as chair at 42% of S&P 500 companies, compared with 34% in the Russell 3000.
• Incoming CEOs are rarely elected board chair at the time of transition. In 2025, 3 of 65 CEO successions in the S&P 500 (4.6%) and 9 of 353 in the Russell 3000 (2.5%) involved the CEO being named board chair at the same time.
• Most companies disclose a policy that preserves board discretion. In 2025, 79% of S&P 500 companies and 71% of Russell 3000 companies disclosed policies giving the board flexibility to separate or combine the roles depending on circumstances.
• Disclosed rationales for leadership structure are evolving. For role separation, the most commonly disclosed rationale remains that the two positions have different responsibilities. For role combination, references to improved communication and strategic execution have increased, while mentions that the CEO is best suited to set the board agenda have declined.
• Proxy advisors and large institutional investors typically focus on independent board leadership (independent chair or strong lead independent director) and evaluate proposals to separate the chair and CEO roles case by case.
Note that these stats can differ a bit depending on the measurement date and method – for example, this Freshfields proxy season writeup says 42% of S&P 500 companies have an independent board chair. Additionally, board leadership structures aren’t as neatly binary as the headline stats imply. For example:
– The TCB report shows that the boards of nearly 20% of S&P 500 companies are chaired by a non-independent director other than the CEO
– The Freshfields report breaks this down into 13% having an “executive chair” and 7% having an “other non-independent chair”
All that to say, if you’re benchmarking, you’ll probably want to use more than one source to inform your analysis and get a sense of the trend line. The TCB report offers these concluding thoughts:
CEO/chair structure remains an area where expectations are shaped by governance or sector context rather than a single market standard. Looking ahead, boards can strengthen confidence in their approach by reassessing the leadership model as circumstances evolve (including through the board’s regular performance evaluation process and during CEO transitions), clearly defining independent leadership authorities (independent chair or lead independent director), and ensuring that proxy disclosures explains how the structure supports board oversight, decision-making, and accountability.
As I mentioned in today’s blog on board leadership trends, boards have more than two models to choose from. This article from the International Institute for Management Development argues that binary discussions of “independent board chair” vs. “CEO duality” overlook “hybrid” approaches – such as a non-independent chair (e.g., founder, former CEO, significant shareholder) and an executive chair (with ongoing executive functions).
A hybrid approach can be useful in some circumstances – for example, if the company is going through a leadership challenge or other significant transition. This excerpt from the article highlights examples of how an executive chair can add value:
Executive chairs rarely emerge by accident but rather in response to a leadership need or opportunity. Five archetypes stand out, although individual cases can straddle more than one category.
1. Founder or family CEO transitions to executive chair. A founder or family member steps down as CEO but remains as executive chair to provide continuity of vision, strategic direction, culture, and investor confidence. Jeff Bezos, who became executive chair at Amazon in 2021, is one example. This archetype is common in technology and family-controlled companies, where the founder’s strategic authority and long-range perspective are difficult to replace quickly.
2. Non-founder CEO transitions to executive chair. A long-serving professional CEO moves into the executive chair role to support succession, preserve strategic continuity, and remain a visible external presence. Eric Schmidt at Google between 2011 and 2015, and later at Alphabet until 2018, and Ignacio Galán at Iberdrola are examples.
3. Temporary executive chair. A chair or outgoing CEO takes on executive responsibilities during a transition or crisis for a time-bound period to support succession, stabilize the organization, and reassure investors, regulators, or employees. James Gorman during a planned CEO transition at Morgan Stanley in 2024 and John McFarlane after the removal of the CEO at Barclays in 2015 fall into this category.
4. Transformational or governance-focused executive chair. An incoming leader is appointed with a strategic or governance-focused remit, for example, to restore credibility, drive change, or reinforce board leadership and governance in a period of transformation. Although comparatively rare, John Thornton at Barrick Gold is a good example. As executive chair from 2014 to 2024, he played a central role in strategy, major transactions, and governance.
5. Quasi-executive chair. A formally non-executive chair operates with near-full-time commitment or executive-style influence because of organizational complexity, the company’s circumstances, or sectoral demands. Mark Tucker, chair of HSBC from 2017 to 2025, is an example. This is not a formal executive chair model but in practice can closely resemble one. The archetype is most often associated with highly complex organizations, especially global financial institutions, and may represent the sharpest divergence between governance doctrine and boardroom reality.
These archetypes show why sweeping statements about the executive chair model are rarely helpful. They are stylized types, not rigid categories. The same structure can mean different things in a founder-led technology company, a global bank, and a business facing crisis, succession, or transformation.
The article examines the risks and benefits of having an executive chair – they can add leadership capacity and expertise, but companies with this leadership model may also experience the old adage of “when everyone is responsible, no one is responsible.” As you might expect, whether it’s a successful arrangement can depend a lot on the personalities and circumstances, including how well the role is defined. The article provides safeguards to improve the effectiveness of the executive chair model, and recommends that boards ask the following questions before going down that path:
1. What problem are we trying to solve? Is the company facing a founder transition, a difficult succession, a strategic transformation, a crisis, or a capability gap that genuinely requires specific experience, expertise, or additional leadership bandwidth at the top?
2. Could the objective be achieved with a non-executive chair model? Sometimes the real issue is not the chair role, but CEO support, board composition, committee design, or the need for better strategic engagement from directors.
3. What will the executive chair do, and not do? The mandate should be explicit. Executive responsibilities are easier to justify when they are confined to specific areas such as strategy, innovation, or capital allocation, rather than extending into operational management.
4. How will clarity of roles and authority between chair and CEO be preserved and made visible? The division of labor must be clear and understood by management, the board, and external stakeholders.
5. What counterweights will preserve independent oversight? The more active the chair becomes, the more important it is to have strong independent directors, independent committee leadership, and a lead or senior independent director where appropriate.
6. Is the arrangement temporary or open-ended? If it is introduced for a transition or crisis, there should be a clear review point, an expected tenure, or a sunset clause.
The bottom line is that it’s okay (maybe even encouraged!) to think outside the box, but boards still need to be clear about who is in charge and why.
Every once in a while, something weird happens with the SEC’s website or email distribution system, and last night was one of those nights. Announcements started rolling out that had first been issued around the “turn of the century” – one update assuring us that the SEC was prepared for Y2K and another announcing that (long-former) SEC Chair Arthur Levitt would speak at a town hall in Des Moines, Iowa. Briefly, the dates on the announcements had somehow been rolled forward to present / future-day. The error was quickly fixed, but not before I took a little stroll down memory lane.
Fun fact: I just so happened to live in the Des Moines area in the late ’90s when Chair Levitt’s visit actually occurred. Unfortunately, I missed the town hall. I am not sure I had heard of “securities law” at that point, and likely was more focused on my next high school basketball game or reader’s theater performance than on the state of our capital markets…
Did those emails make anyone else nostalgic for simpler times? Or maybe, like me, you now have this Prince song stuck in your head. I wouldn’t complain if the SEC distro lists started sprinkling in more time machine emails.
As Dave recently predicted, it was only a matter of time before the SEC entered the multi-front battle against major proxy advisors. Sure enough, the SEC announced late last week that it is suing ISS in federal court to compel compliance with an outstanding administrative subpoena. The SEC’s announcement and its Memorandum of Law reveal that Staff from the SEC’s Division of Examinations initiated an examination of ISS back in March. (ISS is a registered investment adviser, regulated by the SEC and subject to SEC oversight and examination.)
Among other things, the SEC examination team requested that ISS produce data relating to proxy recommendations and votes – which the SEC’s Memorandum characterizes as the core of ISS’s business — including information like the names of clients who received proxy recommendations and information about votes cast on their behalf, and requested that the information, which ISS maintains in its ProxyExchange system, be produced in Excel format. The Memorandum explains:
The Division of Examinations routinely obtains client information during examinations to
ensure that registrants are complying with the federal securities laws, including to determine
whether investment advisers are acting in the best interests of specific clients. This includes
reviewing recommendations to clients, sources of revenues, expenses, client agreements and
disclosures, and other information relevant to assessing conflicts of interest and potential breaches
of fiduciary duties. Likewise, the Division of Examinations obtains and reviews client profiles and
communications to evaluate whether investment advisers are acting with care and in accordance
with instructions. A proxy advisor could violate its obligations under the securities laws by, for
example, providing voter recommendations that advance its own interests over those of its clients or
failing to vote client shares in accordance with the client’s preferences.
As the SEC tells it, ISS produced a data sample that included info for a limited number of clients. After reviewing it, the SEC said it wanted that info for all clients from July 1, 2024 to February 28, 2026. ISS ignored the request and the nine follow-ups that ensued. So, the Enforcement Division got involved – serving an investigative subpoena in July that ISS also allegedly ignored. The SEC says its subpoena seeks documents “highly relevant” to its investigation of the proxy advisor’s compliance with federal securities laws, reiterating these open questions:
– Does ISS’s advice satisfy its fiduciary duties to its clients?
– Is ISS properly disclosing conflicts of interest to clients?
– Is ISS correctly and faithfully executing its clients’ instructions in voting?
– Is ISS maintaining appropriate and complete books and records?
The SEC’s Memorandum also gives a little more color about why ISS is pushing back on portions of the data request:
The first objection, ISS explained, related to the “high level of sensitivity associated with the requested information,” including ISS’s “voting recommendations under ISS’[s] and clients’ custom policies” and “data on how ISS’[s] clients have voted their shares.” Id. ISS stated that its clients “share their confidential voting strategies, priorities, and voting decisions with ISS with an expectation of confidentiality, just as American voters cast their ballots in the privacy of voting booths. . . .” Id. at 2. ISS further claimed that its clients may suffer competitive harm from “disclosure of the data at issue.” Id.
ISS’s second objection was “based on the First Amendment rights of ISS and its clients.” Id. ISS cited the President’s December 11, 2025 Executive Order 14366 concerning proxy advisors4 and expressed “concern[s] that the Subpoena, and Request 3 in particular, poses an unlawful effort to subject ISS to retaliatory actions for having engaged in protected speech.” Id. at 3.
Finally, ISS argued disclosure of ProxyExchange data might burden ISS’s and its clients’ freedom of association because clients could “choose not to associate with ISS” if their voting data were disclosed to the Commission. Id. at 4. Instead, ISS reiterated its proposal to retain an expert to completely “anonymize” the data, but ISS again provided no timeframe for completing that task.
The SEC disagrees with those objections, for reasons it explains in detail in its application to the court. At this stage, the SEC is just seeking a court order to compel ISS to comply with the administrative subpoena. The announcement notes that continuing its fact-finding investigation and, to date, has not concluded that any individual or entity violated the federal securities laws. And so, another chapter in the saga of proxy advisor is underway. . .
I blogged earlier this week about topics in the SEC’s Reg E-Delivery proposal that companies may want to consider commenting on before the designated comment period expires on September 21st. One concern that I’ve heard bubbling up from conversations with some community members is a perception that the proposal could actually increase companies’ printing and delivery expenses by eliminating the “Notice of Internet Availability” as a permissible delivery method for proxy statements. Please participate in this anonymous poll to share your thoughts:
If you want to provide input to the SEC, now is the time. We’re posting memos in our “E-Delivery” Practice Area that summarize the proposal and the requirements for electing to use electronic delivery as your default delivery method. Consider reaching out to your outside counsel if you need to get up to speed on how the proposal would apply to your specific company and the comment letters that are underway – you could participate in a comment letter if you’re a member of a trade organization that’s submitting one, or through your counsel.
Yesterday the PCAOB announced it had adopted amendments to certain provisions of QC 1000, A Firm’s System of Quality Control, and related amendments to PCAOB forms and the QC reporting rule. You might recall – though I won’t fault you if you don’t – that the PCAOB had convened an open meeting back in June to discuss the amendments. As Dave noted at the time:
QC 1000 was approved by the SEC back in September 2024, and the effective date of the new standard was postponed last August. At the time, Reuters had reported that SEC Chairman Paul Atkins had pushed for a delay, due to feedback from audit firms. Earlier this year, the Financial Times reported that new PCAOB Chairman Jim Logothetis had indicated that he planned to seek narrow changes to the new standard.
The amendments remain subject to SEC approval. However, the amendments do not change the effective date of QC 1000, which is December 15, 2026. If approved by the SEC, the amendments to QC 1000 and to the related PCAOB rule and forms will become effective on December 15, 2026. The PCAOB summarized what the amendments will do if approved:
– Rescind the “design-only” requirement so that QC 1000 imposes requirements only on firms that are required to comply with applicable professional and legal requirements with respect to any “engagement”;
– Provide increased flexibility in filling certain specified roles in the QC system by permitting roles to be assigned to non-firm personnel and divided among multiple individuals;
– Rescind the requirement to have an External QC Function;
– Narrow and simplify communication requirements relating to metrics that the firm communicates to external parties about its audit practice, firm personnel, or engagements;
– With respect to identified engagement deficiencies, require evaluation of whether similar engagement deficiencies exist on other engagements only if the identified deficiency resulted or could result in (i) a failure to obtain sufficient appropriate evidence to support the conclusion reached on an engagement or (ii) an inappropriate overall conclusion on the subject matter of an engagement;
– Revise the definition of QC deficiency to make clear that, when firms have implemented more than one quality response to address the same quality risk, they can take those other quality responses (e.g., compensating responses) into account when determining whether a QC deficiency exists;
– Allow firms to select the date as of which they annually evaluate the effectiveness of their QC system, rather than requiring firms to evaluate as of September 30;
– Revise the QC system evaluation conclusions to align more closely with the conclusions in other quality management standards, while retaining a structured process, including specified factors for consideration, to guide the evaluation; and
– Simplify the requirements for retention of QC system documentation and abbreviate the retention period from seven to five years.
While not everyone reading this blog works on securitizations, the announcement says that the accommodations are intended to facilitate capital formation without diminishing investor protection. That ties back to the Commission’s broader goal to modernize the path to public markets and, in my opinion, shows that the Staff is continuing to look under the couch cushions for incremental improvements at the same time the Commission is considering bigger reforms. Here’s an excerpt from the announcement:
We will now review draft initial registration statements, and any revisions thereto, submitted under the Securities Act on either Form SF-1 or Form SF-3 on a nonpublic basis so long as the ABS Issuer confirms in a cover letter to the nonpublic draft submission that it will publicly file its registration statement and nonpublic draft submissions at least 15 days prior to any road show or, in the absence of a road show, at least 15 days prior to the requested effective date of the registration statement.
We will continue to publicly release staff comment letters and responses to those letters on EDGAR no earlier than 20 business days following the effective date of a registration statement.
This review is limited to the following registration statements (“Initial Registrations”):
1. The initial registration statement of a depositor that has not previously filed a Securities Act registration statement on either Form SF-1 or Form SF-3.
2. A new registration statement on Form SF-3 filed by a depositor who, at the time of filing the draft registration statement, does not have an effective registration statement.
3. A new registration statement on Form SF-1 or Form SF-3 filed by a depositor registering an offering of ABS in an asset class for which it does not currently have an effective Securities Act registration statement.
The announcement says the Staff will monitor practices under the expanded processing procedures and may make modifications to limit or terminate these procedures. We will post memos on this topic in our “Asset-Backed Securities” Practice Area!
As we noted in early-summer blogs about this year’s reincorporation votes – in particular, to Texas, whether from Delaware or elsewhere – investors seem to be taking a case-by-case approach. Now, institutional investor voting disclosures are beginning to give more color on large asset managers’ voting decisions. This WSJ op-ed from a Research Director at UT-Austin shares:
On Aug. 28, BlackRock’s voting disclosures showed it backed almost every public company seeking to reincorporate in Texas. From April 1 to June 30, the peak season for shareholder votes, 12 publicly traded companies voted on plans to reincorporate in Texas, according to Southern Methodist University’s Shane Goodwin, whose tracker follows these moves. BlackRock supported all but one.
The op-ed says that BlackRock even backed proposals that the broader shareholder base rejected – which may be surprising, especially if you are comparing the activity to 2020 proclamations from Larry Fink, as the op-ed does. But even in 2024 and 2025, institutional investors weren’t providing across-the-board support for companies that proposed reincorporating, according to this Cooley memo. That said, the prior voting data was more keyed to Nevada being on the ballot.
In the year 2026, Texas has made strides. Let’s not forget that BlackRock holds a stake in the Texas Stock Exchange and, as Axios put it last year, the asset manager has been having a “Texas Revival.”
According to this Bloomberg Law article, the recent N-PX filings confirm that other asset managers have also supported reincorporation proposals:
Investment stewardship teams at BlackRock Inc. and State Street Corp., as well as one of the largest passive funds at Vanguard Group Inc., voted in favor of [a large energy company] and [a large technology company] reincorporating to Texas.
The voting records illuminate some of the largest institutional investors’ attitudes toward the increasing number of company bids to leave their longtime legal domiciles — typically Delaware — for the Lone Star State. Texas has ramped up efforts to bring companies under its legal jurisdiction but caught flak from shareholder proponents for the restrictions it allows companies to set on certain lawsuits and investor proposals.
The asset managers’ votes broke with recommendations from the world’s largest proxy advisory, Institutional Shareholder Services Inc.
All that said, these reports are still relatively early. There will surely be more parsing of the numbers to come – as well as views on whether any data is pronounced enough to be a “trend” and what this all could mean for other companies’ incorporation decisions.
Here’s something that John blogged last week on DealLawyers.com: Lewis Brisbois’s Francis Pileggi and Aimee Czachorowski recently authored a Bloomberg Law article highlighting some of the significant practical advantages that Delaware offers its corporations compared with its leading competitors. The article focuses on business filings, and while it notes that Texas has recently announced a “Texas Express” service for expedited filings, this excerpt explains that what The Lone Star State offers still doesn’t compare to Delaware’s expedited services:
While this announcement is an improvement for Texas entities, the Delaware Division of Corporations provides a superior level of speed, responsiveness, efficiency, and cost.
For example, it doesn’t appear that Texas offers the one-hour service that Delaware offers. In Delaware, one can confirm the formation of an entity or receive confirmation of a filing within a matter of hours. The Delaware Division of Corporations will process the request within the requested time (such as one hour) and a filer can request a confirmation email.
Delaware also offers more options for expedited filings, with the most expedited services offered by Delaware being unavailable in Texas. For the two services — same-day and next-day — which are also offered in Texas, Delaware still proves to be less expensive, and easier to actually file.
The Delaware Division of Corporations provides several options to allow entities to request expedited service both for corporate filings or for uniform commercial code filings for a fee in addition to the normal filing fee.
While Delaware offers one-hour service, which can be requested for $1,000, it appears that the same level of expedited service is unavailable in Texas. Delaware also provides two-hour service for an additional fee of $500; Texas doesn’t offer two-hour service. Texas also announced that it will charge an additional fee for same day-service and next-day service, which Delaware already provides.
While these “back office” issues don’t get much attention from the media or others engaged in the DExit debate, for transactional lawyers and the companies they represent, the Delaware Secretary of State’s office to provide expedited services for a wide array of filings is incredibly important, and states that are serious about getting into the game need to be able to offer filing services that are on a par with those offered by Delaware.
Liz here again: Speaking of Secretary of State services, hat tip to Keith Paul Bishop and his Substack newsletter for the reminder that the Nevada Secretary of State is transitioning business filings to a new website. As part of the transition, there is a planned outage beginning today at 5pm – lasting until 5am Monday, September 14th. During this time, you’ll need to submit filings in an old-fashioned way: by facsimile transmission, e-mail, mail or walk-in. Nevada is also updating its forms – find more information about those on the “ORION Portal“!
