“Was the richest person in the world overpaid?” That’s how the Delaware Court of Chancery (the Court) began the 200-page opinion in Tornetta v. Musk to rescind Elon Musk’s entire $55.8 billion 10-year equity compensation...more
Public company directors are under more pressure than ever to oversee enterprise risk, even risk from day-to-day operations, which is normally addressed by management. Egregious failures of upper management to react to red...more
The Singapore Exchange Regulation (SGX RegCo) published a public consultation paper proposing to amend the Listing Rules to impose a hard nine-year limit on the tenure of independent directors, removing the current two-tier...more
Are corporate boards awash in faux gatekeepers? This article, Board Gatekeepers, from a law professor at the University of Wisconsin, begins with a catalogue of infamous board failures to act as effective monitors of company...more
On April 28, 2022, Vice Chancellor Slights of the Delaware Chancery Court issued a verdict for the defense in In re Tesla Motors, Inc. Stockholder Litigation, a long-running derivative lawsuit challenging the 2016 acquisition...more
Directors must cope with constantly shifting challenges. To help boards navigate these, Skadden launched The Informed Board, a periodic collection of concise articles that provide broad insights about key issues directors...more
Takeaways - Independence is neither a fixed condition nor a universal status for all purposes. Events and relationships can disqualify an otherwise independent director from participating in decisions.. No matter how pure a...more
Institutional Shareholder Services (“ISS”) published its proxy voting guidelines updates for 2021 (“Policy Updates”) on November 12, 2020. The changes that are likely to be of most interest to companies include new and...more
Publicly traded companies need to know whether a director qualifies as "independent" for a variety of reasons. Item 407 of Regulation S-K, for example, requires issuers to identify each director that is independent. In...more
Proxy advisory firms Institutional Shareholder Services (“ISS”) and Glass, Lewis & Co. (“Glass Lewis”) have issued updated proxy voting guidelines for the upcoming 2020 proxy season. Notable policy updates issued by one or...more
On November 7, 2019, the SEC’s Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert highlighting the most often cited deficiencies and weaknesses observed in recent examinations of registered...more
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...more
Oh, I kid the directors! Who would think of such a thing? Well, the folks in India for one. Bloomberg reports that, after a series of corporate frauds, the Indian government is attempting to raise the country’s corporate...more
DIRECTORS AS VENDORS - A new controversy at a large health system highlights the legal and reputational challenges that can arise when directors sell services to the organizations they serve as fiduciaries. According to...more
Delaware courts evaluate a self-dealing transaction with a controlling stockholder through the lens of entire fairness — meaning that both the deal process and price must be deemed fair. The burden of proving entire fairness...more
Attorneys who counsel independent directors on their legal risks and responsibilities sometimes neglect to discuss with their clients their reputational risks, including unknown enterprise risks which, if realized, can damage...more
U.S. companies face a dizzying array of challenges, including from disruptive technologies and cybersecurity threats; economic and geopolitical uncertainties; climate change and evolving sustainability metrics; and questions...more
The Canadian Securities Administrators (CSA) have released CSA Consultation Paper 52-404 – Approach to Director and Audit Committee Member Independence (Consultation Paper) and are inviting comments on the current approach to...more
Neither California nor Nevada require that a corporation have either a “lead independent director” or “presiding director” and yet many corporations state that they have such a position. Why?...more
Regulatory Developments - DOL Issues Final Fiduciary Rule - On April 6, the Department of Labor (DOL) unveiled its pre-publication final version of the long-awaited fiduciary rule (the Final Rule). Some of the more...more
In “Seven Myths of Boards of Directors,” two academics from Stanford Business School set about debunking some of the most common and persistent expectations regard best practices in board structure, composition and procedure....more
On September 28, Institutional Shareholder Services (ISS), a leading proxy advisory firm, published the results of its 2015–2016 global voting policy survey. The survey, which received 421 responses from a combination of...more