A useful regular publication from the PCAOB is its report about conversations with audit committee chairs – here’s the most recent report. The report has a load of anecdotes that are worthy of noting – I took the liberty of creating my top 10 list from it: 1. No surprises – ever: Audit chairs appreciate frequent, transparent communication. If something could be awkward later, bring …
Board Effectiveness Requires Shared Accountability With Management
The annual PwC “Board Effectiveness” report repeatedly concludes that stronger governance requires action from both boards and management. Boards must improve agility, oversight practices and use emerging tools like AI, while management must provide clearer information, earlier engagement and be a more transparent communicator. Here are seven things from the report to note: 1. Board Effectiveness Is Improving – But Not Universally: Executive confidence in …
Four Practical Sustainability Communication Lessons for Multinational Companies
Here’s a bunch of wisdom from Cooley’s Beth Sasfai: “Many multinational public companies are grappling with a common challenge: how to satisfy multiple audiences simultaneously. Companies today face scrutiny from EU regulators, U.S. regulators, state attorneys general, consumer protection authorities, investors, NGOs, customers, employees and suppliers. The key is not developing separate narratives for each stakeholder group. Instead, companies should focus on building a single, …
How You Can Use AI to Help Your Proxy Drafting Process: Six Things
Recently, I blogged about how you should remain vigilant when using AI to help draft disclosure – and I parsed an example to scare you into not over relying on AI. In that example, AI drafted something that was strictly boilerplate. It doesn’t know your company’s facts and it can be tone deaf. It can overgeneralize, be inconsistent and miss material facts. And it doesn’t …
Should Companies Be Using AI to Draft Their Proxy? An Example to Scare You
With most calendar-year end companies having filed their proxy with the SEC for this proxy season, I thought it would be a good time to reflect upon the risks of relying on AI to help draft disclosure since the continuing improvement of AI models (known as “LLMs”) has reduced – but certainly not eliminated – the risks of hallucinations. I’ll cover ways that AI can …
Seven Ways AI Can Help During Your Annual Shareholders Meeting
I’ve blogged several times recently about the ways you might – and might not – use AI to help you take notes during a variety of meetings. Now let’s tackle how you might use AI to help run an annual shareholders meeting. If you’re using a “sandboxed” AI model – i.e., your input isn’t placed into the public domain – here are seven ways that …
Lessons From the Skies for Executive Compensation Programs
Here’s the intro from this Cooley Alert penned by Ali Murata and Michael Bergmann: “As seasoned pilots know, a downward spiral often starts gradually, almost imperceptibly, unless you heed the early warning signs. If those signs are missed or ignored, trouble compounds. It’s often tough to know whether you’re really in a spiral until it starts to tighten, and at some point – sometimes seemingly …
Shareholder Activism: Trends to Consider
Here’s an excerpt from an entry on “Cooley’s M&A Blog” penned by Jamie Leigh, Sean Brownridge, Bill Roegge, Kevin Cooper, Lucas Wherry and Simon Trisk about recent shareholder activism trends and what to expect this year: “Activists view CEO turnover as an opportunity to pursue campaigns. During the past year, 18% of US campaigns were initiated following CEO turnover, a 38% increase over the four-year …
Drafting Risk Factors in a New AI Era
During Northwestern’s “Securities Regulation Institute,” there was an interesting discussion about whether AI tools supplant the need for the summary of risk factors placed in SEC filings because investors can easily summarize the risk factors using an AI tool. This also made me consider a slightly different question – one that may be relevant as the SEC considers taking aim at “information overload” – which …
Five Mistakes Made With Preliminary Proxy Statements (Part 2)
Following up on Part 1 of this blog that explains what a “preliminary proxy” is – and the first two common mistakes made with them – here are three more common mistakes (as well as a bonus note): 3. Filing for shareholder proposals Rule 14a-6(a)(3)states that a preliminary proxy is not required due to the inclusion of a Rule 14a-8 shareholder proposal in the proxy …