Looking ahead to 2013, directors, executives and general counsel of public companies can take some solace from the fact that 2012 was not a year in which a large number of significant new disclosure rules or governance requirements were adopted by the U.S. Securities and Exchange Commission (SEC) or the stock exchanges as had regularly been the case in the prior 10 years. Aside from the impact of relaxed securities regulation under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act) applicable to “emerging growth companies,” 2012 has seen the least amount of new disclosure and governance regulation applicable to U.S. public companies since the passage of the Sarbanes-Oxley Act of 2002 launched a decade of steadily increasing regulation of public companies.
Nonetheless, there remains a significant amount of regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that is yet to be implemented by many public companies, including compliance processes and disclosures under adopted rules regarding compensation consultants and advisers, conflict minerals and financial swaps. There are also yetto- be-proposed rules that have no deadlines for adoption in Dodd-Frank concerning compensation clawbacks for erroneously awarded compensation (Dodd-Frank Section 954), hedging of company stock by directors and officers (Dodd-Frank Section 955), and additional compensation disclosure regarding pay-for-performance and pay ratios (Dodd-Frank Section 952), which are expected to be at least proposed in 2013. Some of these rules, even those already adopted by the SEC as in the case of conflicts minerals disclosure, pose new challenges to securities and governance counsel and other compliance officials, requiring additional knowledge and skills.
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