The Informed Board

Skadden Publication

In the current environment, tax-free spinoffs may be the best option for companies focusing their business lines, we explain in this issue of The Informed Board. Spin-offs do not depend on third parties, and they preserve flexibility on timing and structure.

European companies expect more activist campaigns and, in the U.S., new proxy voting rules could help dissidents win board seats. Meanwhile, the SEC has restricted directors’ pre-set stock trading plans, and even multinationals based outside the EU need to prepare for EU rules requiring climate impact and risk disclosures.

Finally, Foot Locker’s chair discusses how self-evaluations can make boards more effective.

Putting the Best Spin on Corporate Splits
Boards are likely to receive more calls for separation transactions as investors urge companies to focus their businesses. Spin-offs offer more flexibility than a simple sale, and companies retain more control over the process, terms and timing.

How the New Proxy Rules Will Affect US Companies Facing Activist Campaigns
Universal proxy cards may prompt more activist campaigns, subject individual directors to more scrutiny and put pressure on companies to settle. So far they do not appear to have changed proxy advisory firms’ approach to contested elections.

European Activism: More Attacks, More Engagement, More ESG Coming in 2023
Companies expect to see more activist campaigns in Europe this year. Many have identified weaknesses that could make them vulnerable and are engaging with shareholders. ESG issues figure prominently in many activists’ priorities.

FAQs: What the SEC’s New Insider Trading Rules Mean for Directors
New rules for insiders’ preset trading plans will force directors and others to wait before their first trade, and details of their plans will be made public. Restrictions on multiple plans and single-trade plans were also added.

Multinationals Need To Revisit Their Reporting as New EU Sustainability Disclosure Rules Bite
The EU’s new ESG disclosure requirements will apply extra-territorially. Non-EU businesses with EU operations will soon have to report on their environmental impacts and risks — requirements that could conflict with U.S. and U.K. rules.

A Board Chair Explains How To Make the Most of Self-Evaluations
Self-evaluations of full boards, committees and individual directors can elevate a board’s performance. But leaders have to create a culture of trust within the board for the process to work.

See all the editions of The Informed Board