Listen in as Cooley partners Chad Mills and Jason Kent reflect on the past year, discuss 2022 trends and take a look at the year ahead.
Key takeaways
- 2022 was a particularly active year for the Securities and Exchange Commission, including the proposed adoption of significant new disclosure rules relating to cybersecurity and climate-related information, as well as the final adoption of pay-versus-performance disclosure rules, representing a higher compliance burden on most public companies moving into 2023 and beyond.
- While the SEC has not yet adopted proposed cybersecurity and climate-related information disclosure rules - nor has it proposed expected enhanced human capital and other disclosure rules related to environmental, social and governance (ESG) - the SEC, investors and, importantly, the plaintiffs' bar, continue to actively focus on ESG disclosures by public companies.
- Risk disclosure continues to be a focus too, with the SEC sending sample comment letters in late 2021 and 2022 addressing, among other things, climate change risks and exposure to Ukraine conflict-related risks in the Risk Factors and Management Discussion and Analysis (MD&A) sections.
- In addition to the pay-versus-performance disclosure rules, the SEC adopted new rules to require the use of universal proxy cards in contested elections, and companies are well-advised to revisit their bylaws to ensure that appropriate protective changes are effected.
- Board diversity will remain a hot-button topic in 2023, with Nasdaq's "comply or explain" rule going into effect, as well as continued scrutiny from ISS, Glass Lewis and institutional investors.
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