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Goodwin recently published its 2025 Proxy Statement Form Check. In addition to providing a chart laying out relevant Schedule 14A & Reg S-K line-item disclosure requirements, the document includes a detailed discussion of new and revised disclosure requirements that will apply to this year’s filings. The document also addresses certain “less than annual” disclosure requirements like say-on-pay frequency and CEO pay ratio.

– John Jenkins

Yesterday, the SEC announced the formation of a new Cyber and Emerging Technologies Unit (CETU). Its stated focus is “combatting cyber-related misconduct.” Acting Chairman Uyeda notes that the unit will “root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”

This unit replaces the former Crypto Assets and Cyber Unit and is staffed with approximately 30 fraud specialists. The announcement lists “public issuer fraudulent disclosure relating to cybersecurity” as a priority area in addition to:

– Fraud committed using emerging technologies, such as artificial intelligence and machine learning
– Use of social media, the dark web, or false websites to perpetrate fraud
– Hacking to obtain material nonpublic information
– Takeovers of retail brokerage accounts
– Fraud involving blockchain technology and crypto assets
– Regulated entities’ compliance with cybersecurity rules and regulations

– Meredith Ervine 

Earlier this week on The Proxy Season Blog, Liz shared that BlackRock has put a hold on planned engagement meetings on the heels of last week’s updated CDIs about Schedule 13G eligibility for large “passive” shareholders. On Wednesday, Reuters reported that Vanguard has followed suit.

It appears, for now, that these moves are temporary while both asset managers assess the impact of the new guidance. If not, Liz noted that this would be an even bigger deal than the “engagement hushing” practices I blogged about last week, and companies may end up with less visibility into feedback & voting inclinations going into their annual meetings.

Check out our “Schedules 13D & 13G” Practice Area for related law firm memos. If you do not have access to all our Practice Area resources or the latest insights provided in the Proxy Season Blog here on TheCorporateCounsel.net, sign up online or email sales@ccrcorp.com.

– Meredith Ervine 

We’ve posted the transcript from our recent webcast – “ISS Policy Updates and Key Issues for 2025.” ISS’s Marc Goldstein provided a recap of what transpired during the 2024 proxy season, discussed the proxy advisor’s recent policy updates (as of January 22) and shared thoughts on some issues companies will face in the 2025 proxy season. Davis Polk’s Ning Chiu & Jasper Street Partners’ Rob Main joined the dialogue with Marc.

One of the things Marc addressed is how ISS will view increased perk reporting due to higher spending on executive security arrangements. Marc confirmed that, like with all perks, ISS expects companies that are outliers in terms of reported perks amounts to explain why that’s the case.

That said, Marc noted that ISS recognizes the sensitivities with disclosure related to security expenditures and does not expect companies to disclose the specific types of threats that their executives may have received or why their executives are more vulnerable than those of other companies, which may exacerbate vulnerabilities. However, ISS would like to see evidence of measures the board took to ensure that the types and cost of security benefits are appropriate and reasonable, such as if a company has hired a third-party consultant and followed those recommendations.

If you aren’t already a member with access to this transcript and the on-demand audio replay, sign up today for a no-risk trial! You can do that online or by emailing sales@ccrcorp.com. Our “100-Day Promise” guarantees that during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.

– Meredith Ervine 

Tuesday’s Executive Order, “Ensuring Accountability for All Agencies,” has some big implications for key administrative agencies that are considered “independent” from the President compared to other agencies due to one or more features of their establishing legislation — for example, leadership by bipartisan panels of members who serve fixed terms. That includes the SEC and the FTC. Per the fact sheet, the new Executive Order states that all executive branch officials and employees are subject to Presidential supervision under Article II of the Constitution since “the Founders created a single President who is alone vested with ‘the executive Power’ and responsibility to ‘take Care that the Laws be faithfully executed.’” It goes on to say that:

– All agencies must submit all draft regulations for White House review

– All agencies must consult the White House on priorities and strategic plans

– The President and the AG (subject to the President’s supervision and control) provide “authoritative interpretations of law” for the executive branch

– Their “opinions on questions of law are controlling on all employees”

– OMB will adjust independent agencies apportionments, which may prohibit appropriations from being spent on particular activities or projects

– OMB will write “performance standards and management objectives” for the heads of independent agencies

– Independent agencies will hire a White House liaison to work with President Trump’s team

Here’s some helpful history from NPR:

The White House has had the power to review the regulations of government agencies for more than 30 years, since President Clinton signed an executive order calling for regulatory review. However, the policy has long exempted independent regulatory agencies . . .

Project 2025 references a 1935 Supreme Court decision, Humphrey’s Executor v. US, in which the Court decided that a president cannot fire the head of an independent agency. Project 2025’s chapter on the Department of Justice argues that that decision violates the separation of powers.

In Trump’s first term, his White House asked the Justice Department for an opinion on whether he could make independent agencies submit to White House regulatory review. The DOJ said yes, but Trump did not pursue that.

It also notes that this isn’t the first action by the Trump Administration that challenges this independence:

Trump has already fired high-ranking officials at independent agencies including the Equal Employment Opportunity Commission and the National Labor Relations Board, and also more than a dozen inspectors general at independent agencies. Those decisions have already sparked lawsuits against the administration that claim the firings were illegal.

While bemoaning the politicization of the SEC isn’t new, UC Berkeley law prof Amanda Tyler says in the WSJ that the structure of these independent agencies was intended to provide some “insulation from the political winds, ensuring that we don’t have wild volatility of policy . . . If Trump prevails in wresting control of many of these agencies, that is the precedent in place for whoever succeeds him—potentially using that power for very different ends.”

Finally, ICYMI, DOGE appears to be bringing (more of) its fray to the SEC.

– Meredith Ervine 

There have been several CTA updates recently, but I’ve been waiting for a big one to blog about because, among all of us editors, no fewer than two CTA blogs have had to be completely rewritten because of real-time updates that changed the headline. Our last update was when SCOTUS granted a stay of the preliminary injunction the Eastern District of Texas issued in December that prohibited the government from enforcing the CTA while litigation is pending in the 5th Circuit. Weirdly, that didn’t immediately impact BOI filing requirements because a second nationwide injunction remained in place.

Well, now the injunction in Smith v. Treasury has met the same fate. The DOJ under the new Trump Administration filed a motion in February to lift the Smith injunction, which the District Court granted earlier this week.

FinCEN announced that BOI reporting requirements under the CTA are back in effect, with a new deadline of March 21, 2025 for most companies. Consistent with a previous announcement, FinCEN noted that it will consider further modifying deadlines, while prioritizing reporting for entities posing national security risks and initiate a process this year to revise the reporting requirements to reduce hardship on lower-risk entities (including many U.S. small businesses).

In the meantime, Congress started weighing in — with bipartisan support in the House to delay the filing deadline for certain entities by one year. Here’s reporting from Reuters:

On February 10, the House passed the Protect Small Businesses from Excessive Paperwork Act (H.R. 736) unanimously, with a 408-0 vote. Under the bill, existing entities that are “a small business concern” as defined under 15 U.S.C. 632 would have until January 1, 2026, to submit reports about their beneficial owners to Treasury’s Financial Crimes Enforcement Network (FinCEN).

– Meredith Ervine 

Last week, ISS announced that it would halt consideration of gender and racial and/or ethnic diversity of a company’s board when making vote recommendations on director elections. After the announcement, a common question was: “What will Glass Lewis do?”

This Fried Frank memo says Glass Lewis sent a letter to its clients yesterday stating that it is re-evaluating its DEI-related voting guidance in light of the Administration’s approach. Here’s more:

The letter states that, in light of the Administration’s views on DEI, Glass Lewis “may in fact determine that it is in our clients’ best interest for Glass Lewis to change its approach to voting guidance on board elections and DEI-related shareholder proposals at U.S. companies, particularly in areas where this guidance considers gender, ethnic, and racial diversity of the board.” The letter states, with respect to institutional investors who “remain committed to diversity”: “We will do our best to support your voting preferences, but ask you to understand that may not be fully possible in the end.” Glass Lewis states that it “will spend the next two weeks gathering input from clients” and will issue new guidance on March 3, 2025, following the DOJ’s issuance of its report.

That last sentence refers to the Attorney General’s February 5th memo that directs the Civil Rights Division and the Office of Legal Policy to jointly submit a report with specific recommendations for discouraging private sector “illegal DEI” by March 1st.

This isn’t the only update to board diversity considerations since ISS’s announcement. Reuters reported that Goldman Sachs has also ended its four-year-old policy of only taking companies public if they had two diverse board members.

– Meredith Ervine 

Yesterday, on DealLawyers.com, I blogged about Senate Bill 21, which was introduced in the Delaware Senate Judiciary Committee on Monday. The bill proposes sweeping changes to the DGCL that — like last year’s amendments — would override certain existing case law. This CLS Blue Sky blog by law professors Eric Talley (Columbia), Sarath Sanga (Yale) and Gabriel V. Rauterberg (University of Michigan) says, “if adopted, these measures would mark the most significant single-year revision of Delaware’s corporate code since at least 1967” and notes that the proposed changes cut “across foundational doctrines—controller conflicts of interest, derivative litigation, access to corporate records.” Plus, a concurrent Senate Resolution requested that the Council of the Corporation Law Section recommend legislative action on attorney’s fee awards.

As I noted on DealLawyers.com, the bill is notable in both substance and process. The blog says, “most striking of all is the speed with which this is happening—circumventing the usual measured processes of the Delaware Bar’s Corporation Law Council and the typical stakeholder buy-in.” There’s also speculation on LinkedIn that the proposed changes might be approved as soon as this spring — not in the usual August timeframe.

In the following two blogs, I’ll share a summary of key changes to DGCL Sections 144 and 220. Memos already started rolling in yesterday, and we’re posting them in our “Delaware Law” Practice Area. Check that out for more info!

As you’ll see in the subsequent blogs, the bill would make massive changes to Delaware’s approach to reviewing controlling stockholder transactions and attempts to narrow and define some related concepts involved in reviewing the fairness of transactions with a controlling stockholder — including what constitutes “independence” for the directors that approved or recommended the transaction. Even before this bill, director independence was already getting a lot of attention — after the SEC’s settlement with a public company director due to his failure to disclose his close personal friendship with an executive officer and the Delaware Chancery Court’s Tornetta decision.

This will be one of many topics addressed in our upcoming webcast “Director Independence: Recurring Issues and Recent Developments.” Join us on Wednesday, March 5, at 2 pm ET to hear Skadden’s Caroline Kim, Gunster’s Bob Lamm, Davis Polk’s Kyoko Takahashi Lin and Morris Nichols’s Kyle Pinder discuss recurring issues, recent developments and some common scenarios. Members of this site are able to attend this critical webcast at no charge. If you’re not yet a member, try a no-risk trial now. Our “100-Day Promise” guarantees that during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.

– Meredith Ervine 

Newly introduced Delaware Senate Bill 21 would, if adopted, make significant changes to Section 144 of the DGCL to more narrowly define key concepts from case law and create a safe harbor for corporate transactions with controllers (other than going private transactions). Here’s more from this CLS Blue Sky blog:

Overturning Match Group: Lowering the Standard for Controller Transactions. Under Match Group, all controlling stockholder transactions must satisfy all six MFW procedural protections—or face entire fairness review. The proposal rewrites that rule: It applies MFW only to so-called “controller takeovers” (mirroring the original MFW), and even then jettisons crucial MFW features such as full independence of the committee and ab initio In practical terms, going-private deals no longer need to be conditioned on both cleansing mechanisms from the outset, and the committee need only be “majority disinterested” (explained below). For all other controlling-stockholder transactions, the standard is also lowered: (a) The special committee does not have to be fully independent, only “majority disinterested.” (b) The stockholder vote counts only votes actually cast, so abstentions do not act as opposition. (c) Either committee approval or stockholder approval suffices—no need to secure both. This is a major departure from Match Group and fundamentally reduces the scrutiny applied to controller transactions.

Defining “Controlling Stockholder” with a 33.33 percent Threshold. Delaware courts have recognized controllers below 33.33 percent when they exert “actual control.” The proposal imposes a bright-line rule: A stockholder is a controller only if the stockholder owns a majority or holds at least one-third plus managerial authority equivalent to a majority owner. This will exclude some major stockholders (20–33 percent) from controller scrutiny, even if they exercise significant influence. Notably, it undermines cases like Tornetta v. Musk(2024), where Elon Musk was deemed a controller at just 21 percent. Under this rule, he would not have been classified as a controller at all.

Presumption of Independence for Exchange-Listed Directors. A director deemed independent under NYSE/Nasdaq rules is now presumed disinterested unless strong, particularized evidence proves otherwise. Additionally, a director’s nomination by an interested party does not, by itself, suggest the director is interested. This directly counters cases like Goldstein v. Denner, where a director’s controller-backed nomination played a key role in determining that the director wasn’t independent. This change makes it harder to challenge director independence.

“Fair as to the Corporation” Defined. The proposal defines fairness as a transaction that provides a benefit to the corporation or stockholders and is comparable to what might have been obtained in an arm’s-length deal. This codifies the two-pronged fairness test (fair price + fair process) but lacks detail compared with decades of entire fairness jurisprudence. It leaves open several questions: How “comparable” must the deal terms be? What evidence satisfies this? Courts will likely need to interpret these gaps in future litigation.

New Definitions of “Material Interest” and “Material Relationship.” For directors, a material interest or material relationship is anything that reasonably impairs their objectivity. For stockholders, it’s defined more broadly as anything material to them personally. This replaces the fact-intensive, contextual analysis of director independence from Beam v. Stewartand In re Oracle with simplified statutory definitions. Courts may now be less willing to find conflicts unless the impairment is explicit and significant. This could potentially limit challenges to board independence.

– Meredith Ervine 

Newly introduced Delaware Senate Bill 21 would, if adopted, also rework Section 220 of the DGCL governing books & records requests. Here’s the CLS Blue Sky blog‘s summary of those key changes:

Narrowing the Scope of “Books and Records” Requests. The proposal limits what qualifies as corporate “books and records” under DGCL Section 220 to a specific, exhaustive list—charters, bylaws, stockholder meeting minutes, communications to stockholders, board minutes, board materials, annual financial statements, and agreements under Section 122(18). This restricts what stockholders can request in a 220 demand, potentially excluding emails, text messages, or informal board communications, which have become central to derivative litigation.

Imposing a Three-Year Lookback Period. Stockholder access to records is now capped at three years—meaning any demand can only cover documents created within that timeframe. This limits the window for stockholder investigations, particularly in long-running governance disputes or cases where corporate misconduct surfaces years after the fact.

Raising Procedural Hurdles for Stockholder Demands. The amendments impose stricter procedural requirements: A demand must state a proper purpose, describe it with reasonable particularity, and show that the requested materials are “specifically related” to that purpose. This raises the bar for shareholders seeking information, giving corporations more grounds to resist requests by arguing they aren’t narrowly tailored or don’t meet the heightened standard.

Allowing Corporations to Impose Confidentiality Restrictions. Corporations can now mandate confidentiality for produced records and require shareholders to incorporate them by reference in any lawsuit based on the demand. This discourages fishing expeditions and limits strategic use of 220 materials.

Courts Retain Some Discretion—But With Constraints. The proposal confirms that courts can still compel production in litigation or impose reasonable limits—but only if the stockholder meets the new statutory requirements. This preserves some judicial oversight but signals to the Court of Chancery that Delaware wants to tighten stockholder access, which could change how courts approach 220 disputes going forward.

– Meredith Ervine