FEMA apparently uses an informal metric known as the “Waffle House Index” to determine the severity of a natural disaster. We at TheCorporateCounsel.net have our own informal way of assessing the severity of a legal disaster, and we call it the “Force Majeure Memo Index.” Whenever something bad happens, we don’t worry too much about it unless a major law firm kicks out a client memo (see second blog) citing the potential applicability of contractual force majeure clauses.

Unfortunately, this Faegre Drinker memo on contractual risks for global supply chains arising out of the Iran conflict arrived in my inbox last week, and this excerpt makes it clear that we’ve officially crossed the Rubicon:

Force Majeure (FM) clauses excuse performance if it becomes impossible or impracticable due to events like war, armed conflict, or government actions. They may also provide a right to terminate.

The party seeking performance will argue for a narrow construction of the FM provision, limiting the counterparty’s ability to claim relief. It will challenge any suggestion that the event in question caused an inability to perform, and seize upon any failure by the party invoking FM to comply with contractual notification provisions or to mitigate the effect of the event in question.

The party seeking to terminate or suspend will seek to rely on a broad construction, including of specified events such as “war”, “armed conflict”, “acts of government”, “fire or explosion”, etc. It will argue the event in question fits within the specified events, caused its failure to perform, that it has taken appropriate mitigation steps, and potentially that the prolonged duration of the event gives rise to a right to terminate the contract.

The memo addresses other contractual doctrines that might excuse a party from performing its obligations under a contract, as well as contractual provisions, such as MAC clauses, that might have the same effect. The memo also highlights practical steps that parties should consider in dealing with potential contractual performance issues resulting from the Iran conflict.

– John Jenkins

A “crypto user interface” is essentially an app that lets people see their digital currency and send, receive and manage it without needing to understand the blockchain technology that underlies it. Yesterday, the SEC’s Division of Trading & Markets issued a statement that provides a narrow path for certain crypto user interfaces to avoid broker-dealer registration.

The statement includes a detailed list of criteria that the provider of the user interface must satisfy in order to avoid registration. These include operating the interface as a neutral, non-discretionary tool that allows users to handle all aspects of their transactions using objective and transparent parameters. In addition, the provider may charge only fixed fees and may not solicit or recommend trades. Extensive disclosure concerning the provider’s role, fees, conflicts and other matters are also required. (This is definitely the 20,000 ft. overview of the criteria – be sure to read the statement for the details.)

The statement also includes a list of services that will disqualify the provider from relying on the exemption. These include, among other things, negotiating the terms of any transaction, making investment recommendations, handling customer funds or securities, processing trade documentation or taking orders or executing or settling trades.

Commissioner Hester Peirce issued a statement supporting the staff’s actions, but calling for “a more permanent regulatory approach that addresses the broker definition in light of current market circumstances.”

– John Jenkins

On Friday, the SEC approved Nasdaq’s application to expand trading hours expand trading hours for NMS listed equities and exchange-traded products to 23 hours a day, five days a week. This excerpt from the SEC’s release approving the proposal explains how it will work:

Going forward, Nasdaq proposes to conduct trading 23 hours per day, 5 days per week. It proposes doing so in two trading sessions rather than three. First, it will conduct a “Day” trading session, which will be the same and comprise its existing Pre-Market Hours, Regular Market Hours, and Post-Market Hours trading sessions. The Day Session will commence at 4:00 AM ET and end at 8:00 PM ET, and it will continue to feature both the Nasdaq Opening Cross and the Nasdaq Closing Cross. Second, Nasdaq will conduct a “Night” trading session, which will commence at 9:00PM ET and end at 4:00AM ET the next calendar day. All NMS Stocks would be eligible to trade during the proposed Night Session.

As we explain below, between 8:00 PM and 9:00 PM ET on each weekday, the Exchange will pause trading on its market to conduct maintenance, testing, and to process those corporate actions, such as mergers, stock splits, and dividends, that will become effective the following trading day. The pause will also allow for market participants to process and clear trades before proceeding to a new trading day. Nasdaq proposes to keep its markets closed during all weekend hours, except that the trading week will commence with a Night Session on Sunday nights at 9:00 PM ET. The trading week will end at the conclusion of the Day Session on Friday.

On holidays or dates when the Nasdaq market is otherwise closed, the closure will be effective as of 8:00 PM ET on the day prior to the closure date, and the market will generally reopen at 9:00 PM ET on the closure date. If the closure date is a Friday, the market will reopen on Sunday evening at 9:00 PM ET.

The start date for the new extended trading hours remains a little murky. The SEC’s order notes that before it can kick 23/5 trading off, Nasdaq apparently has to file a further rule change proposal confirming that its systems are ready to handle night trading.

As I blogged back in December, a lot of folks on Wall Street aren’t crazy about this move. Among other things, market participants expressed concerns about investors waking to see “a stock blasted 10% higher or lower on thin overnight volume, driven more by traders’ knee-jerk reactions than by calm analysis.”

I’ve got to say, that argument seems a little more strained than it did back in December. I mean, is there anyone who’s witnessed the stock market’s trading history since the launch of the Iran conflict who can argue with a straight face that our currently well-rested traders have been making moves based on “calm analysis?”

– John Jenkins

Glass Lewis recently published its inaugural Institutional Investor Stewardship Report, which surveyed approximately ‍60 asset managers and asset owners across Europe (49%), North America (44%), and APAC (7%). Survey participants represented a range of firm sizes, investment approaches, and stewardship structures. Here are the key takeaways:

– Hybrid stewardship models are now the norm: Nearly two-thirds (65%) of respondents combine baseline portfolio expectations with deeper engagement on select holdings.

– Integration is a work in progress: While 88% report some integration between voting and engagement, a significant share of organizations still operate with fragmented workflows. Nearly half (49%) rely on spreadsheets or general-purpose tools to track engagement.

– Data and accountability as key enablers: Investors highlighted stronger feedback loops with investment teams (44%), credible escalation strategies (41%), and improved data management (36%) as priorities for improved stewardship.

– Regional differences in priorities: European investors place greater emphasis on sustainability themes, while North American investors continue to focus more on traditional governance issues.

– John Jenkins

We recently posted the transcript for our “From S-1 to 10-K: Avoiding Disclosure Pitfalls” webcast, during which Wilson Sonsini’s Tamara Brightwell, Cooley’s Brad Goldberg, Latham’s Keith Halverstam and Gibson Dunn’s Julia Lapitskaya reviewed the most frequent disclosure and compliance challenges that newly public companies face and shared insights into how to avoid the common missteps that can trigger SEC comments, investor scrutiny, and unnecessary risk. The webcast covered the following topics:

– Entering the Exchange Act Reporting Cycle
– Risk Factors, Forward-Looking Statements, and Earnings Communications
– Form 8-K Current Reports
– Form 10-K and Proxy Statement
– Mechanics of the First Annual Meeting
– SOX, Internal Controls, and Disclosure Controls in the First Year

Members of the TheCorporateCounsel.net can access the transcript of this program. If you are not a member, email info@ccrcorp.com to sign up today and get access to the full transcript – or call us at 800.737.1271.

– John Jenkins

State Street Investment Management (formerly known as State Street Global Advisors), which has over $5.6 trillion in assets under management, has published its 2026 Global Proxy Voting and Engagement Policy. State Street also provided a summary of the material changes to the policy, which notes:

The material voting and engagement policy and guideline changes for 2026, which become effective in April 2026, are summarized below.

Engagements with U.S. Issuers

We have included in our publicly-available policy the guidelines State Street Investment Management’s asset stewardship team follows when engaging with U.S. public companies.

Financial Performance

We have systematically embedded financial performance—based on a relative total shareholder return metric—as a factor considered in certain voting policies.

Streamlined Policy for Consideration of Shareholder Proposals

We have streamlined the discussion of the framework we apply when considering shareholder proposals.

With respect to engagement, the State Street policy includes an appendix that sets forth policy guidelines for engagement with portfolio companies that are U.S. public companies. This appendix notes:

As a matter of policy, State Street Investment Management does not seek to influence or change control of any issuer, including U.S. portfolio companies.

When engaging with U.S. portfolio companies, the Asset Stewardship Team may discuss State Street Investment Management’s viewpoints regarding what constitutes best practices supporting effective board oversight of material risks, disclosure of material risks, and shareholder protection consistent with the Policy, including this Appendix A. However, the Asset Stewardship Team will not discuss how it intends to cast its vote on any ballot item, nor its rationale for any vote it has made. Additionally, the Asset Stewardship Team will not dictate or pressure U.S. portfolio companies to adopt or change any policies (including but not limited to policies related to climate, diversity, equity and inclusion, or sustainability) or fundamental business choices like capital allocation. The Asset Stewardship Team will not engage in discussions with U.S. portfolio companies that explicitly or implicitly suggest contingent voting or divestment if a company does not adopt State Street Investment Management’s viewpoint on a particular item, or that suggest that any particular factor, policy or practice is dispositive in making engagement or voting decisions.

All meeting agendas with U.S. portfolio companies are set by the U.S. portfolio company. If requested by the U.S. portfolio company, State Street Investment Management may engage with the company on topics that the U.S. portfolio company has determined to be material to its business, at all times in accordance with the principles set forth in the Policy. However, the Asset Stewardship Team does not discuss, and will remain in listen-only mode during all discussions of, the following topics with U.S. portfolio companies or other investors soliciting State Street Investment Management’s votes in connection with contested shareholder meetings, vote-no campaigns, or shareholder proposals:

– Contested director elections
– Adoption of a climate transition plan
– Adoption of specific targets for emissions reductions
– Scope 3 emissions, including without limitation adoption of a Scope 3 emissions policy, disclosure of Scope 3 emissions, and any reduction of Scope 3 emissions
– Changes to the U.S. portfolio company’s capital allocation

When engaging with U.S. portfolio companies on issues or matters relating to gender, racial or ethnic diversity, the Asset Stewardship Team may discuss State Street Investment Management’s belief that effective board oversight of a company’s long-term business strategy necessitates a board composition with a range of knowledge, expertise, experience, and perspectives. However, State Street Investment Management does not apply, nor will it discuss, specific targets or thresholds of gender, racial or ethnic diversity in connection with U.S. portfolio companies

Consistent with the changes made by Vanguard and BlackRock this years, State Street’s policy reflects a specific focus on financial performance when evaluating the governance matters addressed in the policy. For example, the policy notes:

– “When evaluating board composition, we assess a company’s financial performance relative to its GICS sector (based on a total shareholder return metric) and relevant disclosure.”

– “When evaluating a board’s oversight of risks and opportunities, we assess the following factors, based on various criteria including a company’s financial performance relative to its sector (based on a total shareholder return metric), relevant disclosures by, and engagements with, portfolio companies.”

– With respect to compensation and remuneration, State Street considers “The company’s financial performance relative to its GICS sector, based on a total shareholder return metric.”

On the topic of shareholder proposals, the State Street policy now states:

We believe that company boards do right by investors and are responsible for overseeing strategy and company management. To that end, we do not support shareholder proposals that are on a topic that the company has not determined to be material to its business or that appear to impose changes to business strategy or operations, such as increasing or decreasing investment in certain products or businesses or phasing out a product or business line.

When assessing shareholder proposals, we fundamentally consider whether the adoption of the resolution would promote long-term shareholder value in the context of our core governance principles:

1. Effective board oversight
2. Quality disclosure
3. Shareholder protection

Previously, the State Street policy had gone on to indicate that State Street would consider supporting a shareholder proposal if: (i) the request is focused on enhanced disclosure of the company’s governance and/or risk oversight; (ii) the adoption of the request would protect our clients’ interests as minority shareholders; or (iv) the request satisfied specific criteria that State Street had established for common shareholder proposal topics. The updated policy no longer includes appendices that set forth the criteria used to assess the effectiveness of a company’s disclosure on commonly requested shareholder proposal topics or the criteria for providing support for certain common shareholder proposal topics.

With State Street’s policy, we now have a complete picture of the proxy voting policy changes for the Big Three this year.

– Dave Lynn

One of the risks that we discussed with clients when the SEC Staff shifted to the sidelines for this year’s shareholder proposal season was the prospect that shareholders would utilize the “floor proposal” provisions in Rule 14a-4 to run a “zero slate” contest in the event that a company excluded the shareholder proposal that the proponent had submitted pursuant to Rule 14a-8. As Meredith recently noted over on The Proxy Season blog, we recently saw this risk emerge for one company:

Late last month, Trillium Asset Management advertised its “innovative path to a successful negotiation” with a retailer regarding the inclusion of its climate change-related shareholder proposal in the company’s proxy statement. Here’s more from its announcement:

“Trillium outlined a clear path forward under SEC proxy solicitation rules and BJ’s bylaws: if the company continued towards omission, Trillium would submit shareholder proposals under the pathway provided for in the company’s bylaws and solicit proxies in support of those items. Those proposals would have included a GHG emissions proposal and, importantly, additional good corporate governance shareholder proposals. Trillium’s objective throughout was straightforward – ensuring shareholders had the opportunity to consider, at least, Trillium’s GHG emissions proposal on the company’s proxy.”

“Following further engagement, Trillium and BJ’s reached an agreement: BJ’s will include the Trillium shareholder proposal in its 2026 proxy materials, and the engagement would proceed in the well-established Rule 14a-8 process.”

In the announcement, Trillium reminds proponents that they have options outside of litigating:

“Demonstrating meaningful options without resorting to court: Investors are not confined to a binary choice between acquiescing to omission and filing suit. Without shifting the dispute to the judiciary, shareholders retain credible, well established procedural tools, including independent solicitations, that can change the equation.”

We may be seeing more of these. The announcement also says, “We are proud to join other committed shareholders in the exploration of multiple paths to protect our rights as shareholders.”

We addressed this risk earlier this year in the January-February 2026 issue of The Corporate Counsel, which describes the situation as follows:

Further, some shareholder proponents have raised the possibility of bypassing the Rule 14a-8 process entirely and submitting a “floor proposal” to be raised at the annual meeting, with the prospect that the proponent would solicit its own proxies for that proposal. As we noted in the January–February 2025 issue of The Corporate Counsel at page 10, companies should be on the lookout for shareholder proposals that are not submitted in accordance with the Rule 14a-8 process, particularly given a new activist technique that utilizes the floor proposal approach. In 2024, we saw activists effectively use the floor proposal approach in what has been dubbed a “zero slate” contest, forcing a company in one instance to include the proponent’s five proposals in its own proxy statement when the proponent solicited proxies that included the company’s proposals as well as the proponent’s proposals.

If you would like to review a more detailed description of the mechanics of a “zero slate” contest, check out the article that I wrote titled “Beware of the ‘Other’ Shareholder Proposal Rule This Proxy Season: Considering Rule 14a-4” in the January–February 2025 issue of The Corporate Counsel.

– Dave Lynn

The latest issue of The Corporate Counsel newsletter has been sent to the printer. It is also available now online to members of TheCorporateCounsel.net who subscribe to the electronic format. The issue includes an article titled “Management Succession Is Inevitable: Failing to Plan Is Planning to Fail.”

Email info@ccrcorp.com or call 1.800.737.1271 to subscribe to this essential resource!

– Dave Lynn

Yesterday, the SEC announced the appointment of a new Director of the Division of Enforcement, following the abrupt departure of Meg Ryan last month. The new Director will be David Woodcock, who is currently a partner in the Dallas and Washington, D.C. offices of Gibson, Dunn & Crutcher LLP, where he serves as chair of the firm’s Securities Enforcement Practice Group. The announcement notes:

Mr. Woodcock is a widely recognized securities and governance attorney who returns to the Commission after serving as Director of the Fort Worth Regional Office from 2011 to 2015. During his prior SEC tenure, Mr. Woodcock led Enforcement and Examinations Division lawyers, accountants, and examiners, oversaw investigations in nearly every major area of the SEC’s enforcement program, served as a member of the Enforcement Advisory Committee, and created and served as Chair of the SEC’s cross-office and cross-division Financial Reporting and Audit Task Force, which was designed to enhance the SEC’s detection and prosecution of violations involving accounting and false financial statements.

Most recently, Mr. Woodcock’s practice at Gibson, Dunn & Crutcher focused on regulatory enforcement, internal investigations, and corporate governance. Previously, he served as a senior in-house corporate attorney at Exxon Mobil Corporation. Mr. Woodcock is also an Adjunct Professor of Law at Texas A&M University School of Law, where he has taught for more than a decade on securities, ethics, and compliance.

The SEC’s announcement indicates that Sam Waldon will continue to serve as Acting Director of the Division of Enforcement until David Woodcock starts on May 4.

– Dave Lynn

Last month, the U.S. Government Accountability Office (GAO) released a report to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services titled “Recent Workforce Reductions and Other Personnel Management Changes.” This report was prepared pursuant to a directive in the Dodd-Frank Act which requires the GAO to report triennially on the quality of SEC’s personnel management. The overview of the report notes the following:

Since January 2025, the Securities and Exchange Commission (SEC) has implemented significant personnel management changes in response to executive orders and other direction from the administration. Key changes include offering voluntary departure incentives, requiring employees to work in the office full time, and removing references to diversity, equity, and inclusion from SEC policies and procedures. About 18 percent of employees left SEC during the fiscal year ending September 30, 2025. Most employees who departed took a voluntary departure incentive, and according to SEC, it did not conduct any involuntary terminations in response to executive actions in 2025. SEC also paused its leadership development program in 2025, in part due to uncertainty about the availability and timing of future advancement opportunities.

The report indicates that the SEC has taken some steps to manage the issues that it is facing from the Staff reductions and other changes. The report notes:

SEC has undertaken workforce planning efforts to manage its actions to reduce its workforce. In spring 2025, SEC conducted analysis and began holding human capital review meetings to understand the characteristics of departing staff and to identify skill and resource gaps.

– Analysis of departing staff. Following staff departures due to voluntary buyouts and deferred resignations in April 2025, SEC analyzed the characteristics of staff who left the agency. This analysis found, among other things, that employees with longer tenure were more likely to have taken the voluntary buyouts. Specifically, employees with 20 or more years tenure disproportionately made up the people who voluntarily departed. Officials said this outcome was expected because these employees were more likely to be eligible for early retirement.

– Human capital review meetings. In April 2025, officials from Human Resources and the Office of the Chief Operating Officer began holding modified versions of SEC’s annual human capital reviews with each division and major office on a regular basis. The purpose of these meetings was to gather information about workforce changes and help division heads determine how to reorganize to address these changes. Divisions identified some areas of lost expertise—for example, Investment Management identified lost expertise on rulemaking and on the Investment Company Act of 1940. Officials also assessed whether new priorities from the Chairman could reveal additional workforce gaps. For example, prioritizing cryptocurrency rulemaking might require SEC to address a gap because few employees have both rulemaking and cryptocurrency expertise.

In June 2025, following staff departures and disproportionate losses in specific areas of the workforce, SEC made changes to senior officer ratios and reviewed other supervisory ratios. Specifically, SEC increased the target ratio of employees and supervisory employees to senior officers. They also reviewed divisions’ and offices’ compliance to ensure that supervisory staffing met established targets, according to officials.

In July 2025, the Office of Human Resources began working with each division and
office to create and implement a plan to meet those ratios. Strategies to improve supervisory ratios included using incentives to encourage some supervisors to step down from management positions, combining groups that perform the same function, and shifting employees to new groups with similar job duties. In September 2025, SEC again offered voluntary early retirement and voluntary separation incentive payments to most supervisory-graded employees and allowed certain supervisors to accept a downgrade in their duties to help achieve the planned ratios. According to SEC, 42 people departed the agency in fiscal year 2026 as a result of these efforts.

In December 2025, SEC officials submitted an annual staffing plan in response to the November 2025 OPM and OMB memorandum on ensuring accountability in federal hiring. The memorandum provides guidance on the implementation of Executive Order 14356, which requires agencies to prepare an annual staffing plan in coordination with OPM and OMB and comply with the plan throughout the fiscal year. SEC’s fiscal year 2026 staffing plan identified positions for potential hiring for each division and office. It also identified other personnel actions SEC planned to take based on its workforce planning analysis of skills gaps and needs. For example, the plan included steps to consolidate business groups or work functions to address staffing levels after the voluntary departures and to increase internal and public-facing efficiencies, such as consolidating investor assistance functions nationwide under one office.

– Dave Lynn