TheCorporateCounsel.net

It’s no surprise that the uncertainty surrounding Brexit continues to impact business – I blogged last month that it might be one of this year’s “top risks.” And in December, I wrote that the SEC is monitoring disclosure.

In remarks late last week, Corp Fin Director Bill Hinman reiterated that the UK’s withdrawal from the European Union may be material not just to UK- and EU-headquartered companies – but to any company with extensive international operations – and explained how companies should be applying the SEC’s “principles-based” disclosure rules to Brexit’s evolving business risks (he also touched on sustainability disclosure, as noted in this blog from Stinson Leonard Street).

Bill shared six topics for companies to consider as a starting point when assessing & drafting tailored Brexit disclosures. This Cooley blog highlights that these are the types of questions Corp Fin will be asking during their disclosure reviews. And this “D&O Diary” blog provides further analysis, along with an abbreviated “cheat sheet”:

1. Is the business exposed to new regulatory risk given the uncertainty of which set of laws and regulations will apply and whether transition agreements will be in place?

2. Are there significant supply chain risks due to the potential disruption to the U.K.’s access to free trade agreements with other nations and any resulting changes in tariffs to exports or imports?

3. Does the company face a material risk of losing customers, a decrease in sales or revenues or an increase in costs due to tariffs or other factors? Is the demand for the company’s product especially sensitive to exchange rates or changes in tariffs?

4. Does the company have exposure to currency devaluation, foreign currency exchange rate risk or other market risk?

5. What is the company’s exposure to contractual risk in the face of Brexit? Has the company undertaken a review of its existing contracts with counterparties in the U.K. or the EU to determine whether renegotiation or termination is necessary in light of contractual obligations?

6. Do Brexit-related issues affect financial statement recognition, measurement or disclosure items, such as inventory write-downs, impairments, collectability of receivables, assumptions underlying valuations, foreign currency matters, hedge accounting, or income taxes?

Glass Lewis Pilots “Feedback” on Their Reports

Here’s the intro from this Sidley memo:

Glass Lewis announced that it will pilot a new Report Feedback Statement (RFS) service to a limited number of U.S. public companies and shareholder proponents during the 2019 proxy season. According to Glass Lewis, the purpose of the RFS service is to allow companies and shareholder proponents to “more fully and directly express their views on any differences of opinion they may have with Glass Lewis’ research.”

The RFS service is to be used to report on differences of opinion — not factual errors, which companies should continue to communicate to Glass Lewis. Companies and shareholder proponents may submit statements noting their differences of opinion with Glass Lewis’ analysis of their proposals to Glass Lewis’ research and engagement team. That team will then distribute the statements, without editing or modifying the content, directly to Glass Lewis’ 3,000+ investor clients along with Glass Lewis’ response to the RFS.

Participants may submit a request to subscribe to the RFS service; Glass Lewis will accept requests on a first-come-first-served basis. The maximum number of pilot participants will be 12 companies and/or shareholder proponents per week between March and May 2019 (subject to decrease if the statements received in any week are particularly long or complex).

Free CLE for In-House Lawyers

I recently noticed on LinkedIn that some of my in-house connections have been panelists for a new CLE provider -“In-House Focus.” IHF is focusing on including case studies from current in-house lawyers, and has committed to using diverse faculty. And according to this announcement, they’re offering nine free video programs as part of their launch. Topics include legal operations, privacy, IPOs and government investigations.

– Liz Dunshee