We have identified only a few possible changes to date for D&O questionnaires for the 2020 proxy season.

New rules adopted to implement the FAST Act clarify that registrants may, but are not required to, rely only on Section 16 reports that have been filed on EDGAR (as well as any written representations from the reporting persons) to assess whether there are any Section 16 delinquencies to disclose. Accordingly, in directors’ and officers’ questionnaires, registrants may replace  questions regarding whether all Section 16 reports have been provided to the registrant with a question about whether all required Section 16 reports have been filed on EDGAR.

As noted last year, the Tax Cuts and Jobs Act eliminated the exception to IRC §162(m) for performance-based compensation, subject to a transition rule. We continue to urge caution in eliminating questions in directors’ and officers’ questionnaires related to §162(m) for compensation committee members unless it is clear the compensation committee is not required to administer any compensation arrangements under the transition rule. The same can be said for eliminating references to §162(m) in compensation committee charters.

In June, Nasdaq filed a proposal to amend the definition of “Family Member” used in its corporate governance rules, which is incorporated into the definition of “Independent Director.” If approved by the SEC, the definition will no longer include step-children and will include a carve out for domestic employees who share a director’s home. Additionally, Nasdaq emphasized the issuer’s board must still affirmatively determine that no relationship exists that would interfere with a director’s ability to exercise independent judgment.

D&O questionnaires for Nasdaq issuers would perhaps have to be updated if the Nasdaq proposal is approved by the SEC. The SEC is considering the legal and policy implications of the Nasdaq proposal, and the proposal has not yet been approved.