NAVIGATING PROXY SEASON – CHALLENGES FOR GENERAL COUNSEL

R&C: In your opinion, how is the 2020 proxy season likely to impact public companies? What key issues should general counsel have on their radar?

Grannis: With the publication of the Larry Fink BlackRock letter and State Street letter, sustainability has everyone talking. The conversation is very broad, and ranges from how to plan for and talk about climate change and other sustainability risks, to how to disclose initiatives and risks related to these topics. We think this clearly is, and will remain, one of the biggest talking points for company boards and investors this year. The real question is what kind of action will result from all of that talk, and whether and how BlackRock and State Street will follow through in these areas.

Odell: We also expect environmental, social and governance (ESG) issues to continue rising in prominence, with a movement toward tying environmental and social concerns to financial and strategy matters. Other trending issues to consider are board diversity, director overboarding and combined chief executive and board chairs. Generally, companies will need to pay increasing attention to social and political trends, as well as anticipate their influence on the annual meeting. Public companies should also review their shareholder proposal strategy in light of the recent Securities and Exchange Commission (SEC) changes to the Rule 14a-8 no-action letter process, and anticipate more active engagement and negotiation with their shareholders, rather than outright refusal of the proposals.

Apr-Jun 2020 Issue

Cleary Gottlieb Steen & Hamilton LLP