Deal Diary

Editor’s Note: Akin Gump is pleased to publish the first in a series of blog posts covering significant issues U.S. boards of directors may expect to face in 2022. In addition to ongoing pressures on the part of boards of directors of private and public companies to continue embracing environmental, social and governance (ESG) principles in connection with developing both short- and long-term growth strategies, directors in the U.S. (and, by extension, overseas) are facing any number of challenges that will need to be navigated in a thoughtful and transparent manner. We expect to publish this series of posts over the next few weeks, as well as updated materials and content as and when events warrant.  

In light of the health and safety concerns related to coronavirus disease 2019 (COVID-19), the U.S. Securities and Exchange Commission (SEC) has recently issued guidance to assist public companies with upcoming annual shareholder meetings.

This week, we highlight a report by the EY Center for Board Matters that analyzes independent directors who were elected by shareholders to the board of a Fortune 100 company for the first time in 2017. The research shows that companies are continuing to bring fresh and diverse perspectives into the boardroom, and enhancing the alignment of board composition with their forward-looking strategies.

This week we highlight Ernst & Young’s “Top Priorities for US Boards in 2017.” The report addresses the importance of focusing on strategy, risk management, shareholder communications and the company’s talent pool, including the board’s own composition, as well as how geopolitical developments, innovation and technology are some of the main drivers of creating a competitive advantage.

Last week, SEC Commissioner Luis Aguilar outlined expectations for directors of public companies to manage cybersecurity risk. If you think it is enough that a board of directors reviews annual budgets for privacy and IT security programs, assigns roles and responsibilities for privacy and security, and receives regular reports on breaches and IT risks, think again. The SEC appears to be raising the bar for directors everywhere to be responsible for overseeing cyber-risk management.

Noting an average annual cybercrime cost of $11.8 million to a sample of U.S. companies, Commissioner Aguilar highlighted major data breaches affecting companies nationwide—Adobe (38 million customer accounts), Target (40 million customers), Snapchat (4.6 million users), U.S. banks (websites offline) and securities exchanges (infrastructure attacks).