The Informed Board

Skadden Publication

What it means to be an independent director isn’t always obvious. As we explain in this issue of The Informed Board, outside directors need to be alert to circumstances and relationships that could be used to challenge their ability to exercise independent judgment.

In a second article, we offer a quick guide to 16 critical issues boards are likely to encounter in 2022. And, in an interview, Skadden partner Brian Breheny discusses in more detail a rule change that would require fuller, prompter disclosures by activists and other investors that acquire substantial stakes.

What Exactly Is an Independent Director? (Hint: It’s More Complicated Than You Think)
Director independence means different things for different purposes, and it is situational. When directors’ actions are challenged, courts often consider personal and business ties that might suggest divided loyalties.

2022: What You Need To Know …
This year, we expect to see new disclosure requirements; SEC rule changes affecting directors; activists adopting new tactics; changes to shareholder voting processes; tax and antitrust developments that could alter the way companies execute deals; and revised trade rules that will have an impact on many businesses. Here is a quick guide to topics that may affect your decisions as a director in 2022.

Interview: SEC Changes Would Let You Know More About Your Shareholders
The SEC has proposed to update disclosure requirements for investors that acquire 5% of a company, shortening disclosure deadlines and bringing some derivatives within the rules. As Skadden partner Brian Breheny explains, another change would loosen the definition of investors acting as “a group,” potentially requiring them to disclose their holdings and intent sooner.

See all the editions of The Informed Board