Directors' Cut

“Oversight in the AI era: understanding the audit committee’s role” from PwC identifies and addresses seven key areas of audit committee AI oversight with reference to foundational considerations across each area. Coverage includes strategic opportunities and instructive examples of real world applications, responsible AI, regulatory standards and expectations, sources of risk and risk mitigation/management, and talent implications and strategy.

“Board Governance of AI and Emerging Technologies” from Directors & Boards provides examples of areas of oversight responsibility properly allocated to board committees subject to the full board’s oversight responsibility.

“Do’s and Don’ts of Using AI: A Director’s Guide” from Skadden Arps advises directors not to use AI in a manner that may result in the inadvertent disclosure of the company’s confidential information; violation of the company’s contractual obligations, internal policies, or privacy laws; loss of attorney-client privilege; or discoverability of sensitive information in litigation or a regulatory enforcement action or inquiry, and explains what this means in terms of suggested do’s and don’ts.

PwC’s “Audit committee effectiveness: practical tips for the chair” is a helpful resource for the audit committee chair and the board. Coverage includes desired audit committee chair skills and attributes; committee composition and size requirements and other suggested criteria; recommended audit committee onboarding topics and ongoing education considerations; best and suggested practices for committee meeting pre-read materials, meeting protocol, meeting agendas, and executive and private sessions; annual evaluations; and proxy disclosure. The guide includes links to checklists, samples, and guidance. A sample annual audit committee meeting calendar is included in the appendix.

Jenner & Block’s review of earnings releases issued by 100 S&P 500 companies in April and May 2025 revealed varying approaches to consideration of tariff implications on quarterly guidance. Companies that did not address tariff impacts in their guidance commonly disclosed the potential impact of tariffs in their forward-looking statements.

KMPG's "2025 Audit Committee Survey Insights" reveals the results of a global survey of more than 600 audit committee members and chairs, in addition to US-specific findings based on a survey of 85 US audit committee members and chairs of predominantly publicly traded companies across industries conducted from February to May 2025. US-specific takeaways are here.

“The Audit Committee Chair of the Future” from Deloitte US reveals insights from interviews with S&P 500 audit committee chairs on how they navigate risk, foster transparency, and drive effective oversight.

Every year, DiversIQ reviews S&P 500 proxy statements for disclosure of the presence of a Rooney Rule policy for director searches. In response to a Society member inquiry regarding evolving practices based on the regulatory landscape, DiverseIQ reported the following stats as of July 3: (i) 120 companies disclosed having a Rooney Rule policy for director searches, down from 220 last year; (ii) Of the 220 companies with a policy last year, 119 retained it, while 101 removed it; (iii) Only one company adopted a new policy this year.

Davis Polk’s piece on board structure and composition considerations discusses common practices and thoughtful considerations relating to the board leadership structure (combined or separate CEO/Chair), board size, director tenure and board refreshment mechanisms, director skills and experience, and director independence.

Deloitte’s “Director skills for navigating a complex business environment” reveals director skills data from SEC filings for the Fortune 100 to help inform board refreshment strategies. See key takeaways here.

According to Spencer Stuart’s report: “Is Your Board Ready for the Challenges That Are Coming?”, both CEOs and directors identified digital / technology / AI expertise as a skill boards need to add or increase in the next three years – topping cybersecurity experience, regulatory / government experience, global perspective, and an investor background. The report cautions against overreliance on issue-expertise on the board as a whole and suggests other approaches—in addition to ongoing strategic refreshment—that boards can consider to gain intelligence on discrete topics, including external experts, as well as internal staff who may be at levels below the members of the C-suite who regularly report to the board.

Premised on the notion that effective board refreshment is positively correlated with corporate resilience and performance, “Board Monitor 2025: The Quiet Power of Continuous Board Refreshment: Why High-Performing Companies Treat It as a Strategic Discipline” from Heidrick & Struggles reports on the results of a recent global survey of CEOs and board members across company types regarding their companies’ approach to board refreshment. Among other insights, the report highlights the most fruitful board refreshment activities that so-called “strategic board refreshers” undertake and includes recommendations to boards to enhance their board refreshment practices.

Semler Brossy’s article addresses evolving responsibilities of the compensation committee that encompass human capital management (HCM) beyond the executive team and how the expanded remit manifests in the form of renamed committees, amended committee charters, and additional or different skill sets. The article includes suggested HCM oversight responsibilities across the full board and committees and suggested HCM discussion topics by quarter.

Reuters reported on the declining use of DEI executive pay metrics among the S&P 500, purportedly triggered by pressures associated with the new Presidential administration and conservative activists. According to data provided by Farient Advisors, use of DEI metrics in executive pay programs declined 35% since 2023, with less than one-quarter of companies using such metrics today compared to 57% in 2023 based on proxy statement disclosures.

“What You are Likely to Hear in the Boardroom” from Pay Governance is a helpful resource for the compensation committee. Based on the firm’s participation in more than 250 compensation committee meetings year-to-date, the article highlights a dozen recurring topics—including executive security, tariff implications on incentive pay, impacts on executive pay resulting from the Big Beautiful Bill, shareholder engagement challenges, and more—and provides targeted insights on common practices and approaches, as well as relevant considerations and seasoned recommendations.

Bank Director’s “2025 Compensation & Talent Survey” benchmarks talent, succession planning, and compensation practices based on a recent survey of 265 independent directors, chairs, CEOs, human resources officers, and other executives of public, private, and mutual US banks, and review of fiscal 2024 proxy statements (as to public company compensation data). See key takeaways here. 

“Trends and Updates from the 2025 Proxy Season” from Freshfields includes robust benchmarking information on board practices, including board committee structure, composition, and refreshment, and board and management diversity, as well as relevant regulatory and other developments, no-action letter statistics, major institutional investor and proxy advisor policies on board diversity, director overboarding, and other key topics.

Society members across company types and sizes weighed in on their company’s board meeting practices – including the number, typical format, cadence, and duration of regular board meetings, as well as strategy sessions in relation to regular board meetings.

The Conference Board, in collaboration with KPMG, Russell Reynolds, and the Weinberg Center for Corporate Governance, reported on the uptick in director overboarding policies and how the policies have evolved substantively over the past five years as of June 15, 2025, based on data from ESGAUGE. See key takeaways here.

Bank Director’s “2025 Governance Best Practices Survey" includes a plethora of benchmarking data on core governance practices among banks under $100 billion in assets based on a May/June 2025 survey of 195 independent directors, board chairs, and CEOs. Coverage includes board and committee meetings and materials; board evaluations; strategic planning; board leadership; board composition, diversity, and refreshment; board culture; and more. 

The NACD reported highlights from its Spring 2025 annual Public Company Board Practices and Oversight Survey of 201 public company directors associated with public companies across sectors and sizes. See key takeaways regarding the board-CEO relationship, AI, cybersecurity oversight, and supply chain oversight here.

The “Private Company Board Compensation and Governance Survey” from Compensation Advisory Partners (CAP) and Private Company Director & Family Business magazines reveals otherwise scarce benchmarking data on director pay and select governance practices based on a recent survey of 633 respondents across ownership structures, with 40% associated with family-owned companies. Pay findings are summarized here.

PwC’s guide: “Going public? What you need to know about corporate governance” identifies and discusses pre-IPO preparedness considerations relevant to board composition and leadership; board and board committee structure and composition; director election voting standards; share structure; shareholder expectations, proposals, and activism; and proxy advisory firms. The appendices include (among other things) a comparison of NYSE and Nasdaq corporate governance requirements, SEC-required governance-related disclosures, and SEC and stock exchange board committee requirements.

Among the noteworthy trends from EY’s “2025 proxy season review: four key takeaways” are those captured by board oversight-related proxy disclosures in relation to AI, sustainability, and DEI. See key takeaways here.

Society in-house members across sizes weighed in on their companies’ quantitative thresholds for various matters that require board approval – specifically, major capital expenditures, indebtedness or financing agreements, acquisitions/divestitures and M&A activity, and settlements of litigation.

Vanguard’s 2024 Investment Stewardship Report outlines its global voting and engagement efforts for the 12 months ended December 31, 2024. Among other things, the report notes that of 401 environmental and social shareholder proposals it evaluated for US companies, it supported none, either because they were overly prescriptive, not sufficiently financially material to the company, or had already been addressed by the company. 

Courtesy of an analysis conducted by Proxy Analytics, Vanguard’s Q2 2025 Quarterly Engagement Report reflects a 44% reduction in the number of engagements overall compared to Q2 2024, and a 59% reduction of US engagements, purportedly evidencing the chilling effect of SEC staff’s February 2025 Schedule 13G guidance on shareholder engagement. 

According to its “US Regional Brief,” based on the application of its case-by-case, company facts and circumstances-specific proxy voting policy, Vanguard did not support any of the 261  environmental or social shareholder proposals at US companies (down from 200 such proposals in 2024) during the 2025 proxy season ended June 30, 2025. The funds voted on 576 shareholder proposals in total, representing a substantial decline from 691 in the 2024 season.

BlackRock's 2025 Global Voting Spotlight, which captures its proxy voting-focused stewardship activities for the 12 months ended June 30, reveals a plethora of noteworthy statistics, case studies, and instructive commentary that should help inform companies' engagement and disclosure going forward. See key takeaways here.

The HR Policy Association, in collaboration with the Center for Executive Succession, released “CEO Succession: “10 Pitfalls Boards Must Avoid— and the CHRO Practices That Help,” offering interesting insights and sound tips on CEO succession planning practices and showcasing the value of  the Chief Human Resources Officer’s involvement in the process. The study was based on interviews with directors, investor insights, and benchmarking data.

Spencer Stuart's annual survey of Nominating/Governance Committee chairs revealed insights on top committee priorities, board refreshment, director education, and recruitment criteria. See key takeaways here.

Directors & Boards reported on CEO security trends based on WTW’s analysis of S&P 500 proxy statements filed as of June 5, 2025. Among the key takeaways: The median value of CEO security has increased from $28,500 in 2014 to nearly $80,000 in 2024. See additional takeaways here.

PwC's "Being prepared for the next crisis: The board’s role" identifies the primary building blocks and associated practical "to do's" associated with crisis preparedness that will both fulfill the board's oversight responsibilities and optimally position the company for damage mitigation and recovery. The memo includes a checklist of the key elements of an effective crisis management plan, examples of board escalation triggers, the most common crisis management mistakes, a crisis post-mortem analysis agenda, and relevant statistics from PwC's annual corporate directors surveys.

In this post: “Officer Exculpation in 2025: What the Latest Vote Results Tell Us,” Woodruff Sawyer provides a high-level overview of how officer exculpation proposals fared in the 2025 proxy season – what generally worked and didn’t work, and why. Practical takeaways based on the analysis address, among other things, whether and how to bundle officer exculpation with other provisions, shareholder engagement, and the implications of proxy advisor support or the lack thereof.

“What drives board effectiveness amid uncertainty” from Corporate Board Member and EY explores how directors are viewing and carrying out their strategy oversight responsibilities in the context of the challenging and unstable macro environment based on a Q1 2025 survey of nearly 200 public company directors. The report suggests boards engage in key conversations about strategic resilience, corporate strategy, risk tolerance, and strategic assumptions to promote corporate resilience and outlines a series of questions associated with each to help inform the board’s discussions.

Boardspan’s “How to earn and keep shareholder trust” shares bite-sized insights and considerations for boards gleaned from a conversation with BlackRock co-founder and Senior Advisor Barbara Novick across the key topics of shareholder engagement and proposals, proxy advisors, Total Shareholder Return, ESG, and diversity.

SquareWell Partners reported on institutional investors’ perspectives on shareholder activism based on a survey of more than 30 asset managers and asset owners. See key takeaways here.

Wachtell’s “The ‘Big Three’ Shift Approach to Stewardship” recaps BlackRock’s, Vanguard’s, and State Street’s internal divisions of stewardship teams into two teams and provides an example of how the voting policies used by the two teams may diverge on key issues, thus potentially complicating companies’ engagement efforts. The firm provides high level guidance to companies as to how to manage the change in approach from an engagement perspective. 

“Activists Say ‘Yes’ to ‘Vote No’ Campaigns in 2025” from Skadden Arps recounts the uptick in “vote no” or withhold campaigns against directors during the 2025 proxy season, explains the various approaches available to and tactics used by activists to launch “vote no” campaigns, and provides guidance to companies on how to reduce the likelihood of being targeted by — or on the losing side— of such a campaign.

The Conference Board reported on DEI-related disclosure trends, including use of the “DEI-related” terminology, workforce disclosure, board diversity disclosure, and board DEI oversight. See key takeaways here.

DiversIQ reported on noteworthy sustainability and human capital disclosure practices and trends, generally illustrating a decline in standalone sustainability and diversity reporting and avoidance of “ESG” nomenclature. Highlights are here.

Littler’s “A DEI Conundrum: We Employ U.S and Non-U.S. Workers. How Can We Straddle Diverging DEI Requirements?” recaps and contrasts the US’s anti-DEI stance with the positions taken by other jurisdictions, including the EU, UK, Japan, Australia, and areas of Canada, which in many cases obligate employers to undertake DEI-related activities that may be deemed unlawful in the US or vis-à-vis US citizens extraterritorially. The firm provides guidance to global companies on how to navigate and mitigate the risks associated with these challenges.