Looking To The 2026 Proxy Season: Key Corporate Governance, Engagement, Disclosure And Annual Meeting Topics

This Alert outlines key corporate governance, disclosure and shareholder engagement topics for public companies preparing for their 2026 annual meetings. We offer practical guidance on "what to do now" for companies and their boards as they navigate evolving regulatory expectations.

Under new leadership, the Securities and Exchange Commission (SEC) has announced a revised regulatory agenda, including the withdrawal of several rulemaking initiatives from the prior administration focused on environmental, social and governance (ESG) topics—such as proposals on human capital management disclosure, board diversity and conflict minerals reporting—and the introduction of new areas of focus for rulemaking.

As companies enter the annual meeting season, they should remain attentive to shifting SEC priorities and related regulatory developments. For a discussion of disclosure developments for annual reports see our Need to Know for 2026: 10 Tips for the Form 10-K here (the "10-K Alert").

1. HOT TOPICS IN BOARD RISK OVERSIGHT

Companies and their boards of directors face an increasingly complex risk landscape. Although core risks relating to company strategy and business operations continue to be the primary areas of board focus, geopolitical uncertainty, rapid technology developments, and shifting stakeholder expectations demand sustained attention by the board. Regulatory compliance has become more challenging, with companies navigating conflicting requirements across jurisdictions. In the U.S., federal rulemaking has slowed amid a broader move towards regulatory simplification, but enforcement and litigation risk remain, particularly for companies misaligned with the administration's priorities reflected in executive orders on immigration, DEI, trade policy, and artificial intelligence (AI). Companies need to steer the course between the federal regulatory environment and that in applicable states. This landscape creates a precarious legal and regulatory environment, especially in areas such as technological innovation, energy and environmental policy, trade and national security, the administrative state, and certain social initiatives, and reinforces the need for strong board-level risk oversight.

What to Do Now:

• Focus on Core Risks. As companies continue to face a complex risk environment, boards must have a strong grasp of the most significant risks to the business. Boards should ensure that processes and policies for identifying, assessing, managing, and disclosing key risks are regularly reviewed and updated. Board and committee minutes should appropriately document discussions and decisions made regarding key risks and the company's enterprise risk management framework.
• Update Board and Committee Responsibilities. Regulators are also increasingly focused on how boards oversee key risks and whether oversight sits with the full board or a specific committee. Once responsibilities are allocated, committee charters should clearly reflect those oversight roles, and board and committee agendas should provide sufficient time for meaningful risk oversight.
• Mind the AI
  
  Oversight Framework. AI is now a central topic in boardrooms and public disclosures. Effective oversight requires directors to understand how AI is used across the business, how it affects strategy, and what governance and risk-management structures are needed. Although the recent Executive Order seeks to avoid a patchwork of state-level rules, the absence of a comprehensive regulatory framework in the U.S. continues to create uncertainty for companies trying to anticipate and manage the fast-moving risks associated with AI development and deployment. Companies with international operations should also ensure compliance with applicable laws such as the EU's Artificial Intelligence Act.
  
  Board Use of AI. Beyond overseeing AI, boards are also beginning to use AI tools in their own work. Common uses include meeting preparation, summarizing materials, and benchmarking. Given the risks associated with AI use in the board context (including the potential for inadvertently inputting confidential and highly sensitive information into an open access AI tool), boards should work with management to establish clear policies governing when and how directors may use these tools.
  
  Disclosure. Companies are increasingly disclosing how boards oversee AI-related risks and opportunities, including the adoption of responsible AI frameworks, ethical guidelines, and integration of AI into core operations. According to a recent E&Y survey, roughly 40% of Fortune 100 companies have created board-level committees or working groups dedicated to AI governance, while others have assigned AI oversight responsibilities to existing committees. AI disclosure is now also routinely discussed in the Business and Risk Factors sections of the Form 10-K (See 10-K Alert). Disclosures also increasingly highlight AI expertise as a desired or actual director qualification, often noting director participation in AI-focused training and certification programs.
  
  
• Review and Update Crisis Plans. Given the complexity of today's risk environment, boards need a well-defined crisis management plan to ensure an effective response that protects the company's reputation and preserves stakeholder value. Close coordination between management and the board is essential to establish clear escalation and, when necessary, disclosure processes. As part of its oversight role, the board should regularly revisit crisis protocols, conduct tabletop exercises, and integrate periodic reviews of crisis preparedness into the board agenda. These practices help directors clarify roles and responsibilities and anticipate potential reputational, disclosure, and strategic implications. Reputational risk oversight is especially critical in an era where social media can rapidly amplify a crisis. Boards should ensure that management has processes in place (and an advisory team on standby) to identify, assess, and appropriately respond to reputational challenges.
• Review Sustainability Targets. As regulatory expectations and stakeholder scrutiny around sustainability and ESG continue to evolve, companies should regularly review their ESG disclosures across all platforms—SEC filings, sustainability reports, corporate websites, packaging, advertising and other public statements—to ensure consistency, accuracy and alignment with current assumptions and methodologies. Board should pressure test management about whether stated goals and targets remain operationally achievable in terms of technological feasibility and dedicated resources, aligned with corporate strategy and risk management, and supported by credible data and governance processes. Companies that determine that a target continues to be reasonably achievable and aligned with corporate strategy and risk appetite may stay the course or make adjustments to the target and/or related disclosure. Companies may decide to continue with a target but stop making public statements about the target or progress towards achievement (i.e., "greenhushing"). Different considerations may be relevant in different markets and at different times. Companies should be cognizant of the risks involved in continuing with a target as compared to withdrawing it or revising it.

2. FOCUS ON BOARD COMPOSITION

A skilled and adaptable board is essential to effective governance. Board composition and accountability remain under close scrutiny, with investors, customers, regulators, and other stakeholders assessing whether directors have the expertise, structure, and leadership needed to support strategic goals and drive performance. Directors with strong track records (particularly those with CEO experience) are especially valued in periods of uncertainty.

What to Do Now:

• Evaluate Board and Committee Composition, and Leadership. Boards should regularly assess their leadership structure, competencies, independence, tenure, and overall effectiveness to ensure that board and committee composition aligns with the company's long-term strategy and emerging risks. Boards that do not evolve may miss emerging trends, hinder innovation, or provide inadequate oversight. As business risks shift— particularly in areas such as technology—companies increasingly seek directors with specialized expertise who can contribute meaningfully at board and committee levels. Board and committee chairs (and lead independent directors) now play a critical role in supporting management, engaging with external stakeholders, and fostering clear, consistent communication between the board, management, and key stakeholders.
• Consider Board Diversity Disclosures. The elimination of the Nasdaq board diversity rules and the chilling effect of the new administration's policies and threats of legal action on corporate DEI initiatives led to a significant reduction in board diversity disclosure in 2025. A November 2025 report by The Conference Board found that S&P 500 companies disclosing data on director race and ethnicity dropped from 98% in 2024 to 66% in 2025. While this trend towards less board diversity-related disclosure is expected to continue into 2026, companies should be aware of potential impacts on proxy advisory firm recommendations and key institutional investor votes. See our Annex for a "Roundup of U.S. Proxy Voting Policies at Proxy Advisory Firms and "Big Three" Institutional Investors" relating to board diversity.
• Refresh Board Self-Evaluation Methodology. Given rising levels of director dissatisfaction, public companies should consider whether it is time to take a hard look at their board assessment processes. According to the PwC 2025 Annual Corporate Directors Survey, few boards conduct individual director evaluations, and even fewer use an external facilitator. Companies may benefit from reviewing their current practices and assessing whether existing processes are achieving their intended purpose. A more holistic review of each director facilitated by a third-party can help identify whether individual skills, performance, and contributions align with the company's evolving needs.
• Consider Director Commitments. As external risks and evolving market conditions demand greater diligence from public company directors, companies should remain attentive to the risks of director overcommitment. In response to investor and proxy advisor concerns about overboarding, most S&P 500 boards have adopted limits on the number of public company directorships a director may hold at one time or strengthened their existing policies. Companies should continue to assess their guidelines, while maintaining flexibility to account for individual director performance and company needs.

3. HUMAN CAPITAL AND EXECUTIVE AND DIRECTOR COMPENSATION

Over the past year, issues such as talent development, company culture, DEI initiatives, pay equity, and workforce management have receded from public focus as companies continue to prioritize and rebrand "inclusivity" while navigating evolving federal and state enforcement risks and related private litigation. At the same time, companies are anticipating potentially significant changes in the executive compensation disclosure landscape. In June 2025, the SEC convened a roundtable to consider a series of updates to executive compensation disclosure rules. These discussions, combined with the administration's efforts to scale back DEI programs and scrutinize the influence of proxy advisors (and shifts in proxy advisory firm policies), signal possible shifts in how executive pay, as well as key employment terms, are structured, disclosed, and monitored.

What to Do Now:

• Review DEI Disclosure and Inclusion Efforts. Many companies have significantly scaled back disclosure of workforce diversity and equity efforts in light of the administration's flurry of anti-DEI executive orders and guidance from federal agencies including the Department of Justice and the Equal Employment Opportunity Commission. Companies have embraced "inclusion" to rebrand and focus their human capital programs on ensuring everyone feels welcome and included. Companies should ensure that disclosures are consistent across various sources, including SEC filings, sustainability reports and the corporate website.
• Review Key Institutional Investor and Proxy Advisory Firm Policies. Companies should review their pay practices and related disclosures through the lens of proxy voting policies of their top institutional investors and the proxy advisory firms. Companies should also be prepared to engage with key investors and proxy advisory firms around issues that could potentially result in negative votes or recommendations against say-on-pay, compensation plans and/or director elections. For example, among the most common factors cited by investors when voting against say-on-pay proposals in 2025 from Semler Brossy's 2025 Say on Pay and Proxy Vote Results were the grant of special and/or mega incentive awards, inadequate shareholder outreach and disclosure, nonperformance-based equity, problematic pay practices, the relationship between pay and performance and the rigor of performance awards.
• Responsiveness to Low Say-on-Pay Support. In light of recent SEC guidance on Schedules 13G and 13D, ISS updated its framework for evaluating company responsiveness to a low say-on-pay vote (i.e., less than 70% of the votes cast). ISS will not penalize companies for the absence of specific shareholder feedback if they disclose meaningful efforts to solicit input and outline actions taken in response to the low support. ISS will also take into account significant corporate events—such as mergers or proxy contests—recognizing that such circumstances can sometimes contribute to reduced shareholder support.
• Consider Non-Employee Director Pay. ISS has expanded its policy on high non-employee director (NED) pay to permit adverse recommendations against committee members responsible for approving or setting NED compensation in the first year of occurrence for director pay issues that ISS considers "egregious." In addition, adverse recommendations may be issued where a pattern of excessive or problematic pay appears across two or more consecutive or even nonconsecutive years (i.e., in year 1 and year 3, but not in year 2). Examples of egregious NED practices may include performance-based awards, retirement benefits or problematic perquisites.
• Understand Changes to Glass Lewis Policies. As previewed earlier in 2025, starting for 2026, Glass Lewis adopted a new pay-for-performance assessment scorecard to replace its "A" through "F" grading system. The assessment scores executive compensation on a scale of 0 to 100 by rating a company's executive compensation program against six tests comparing various CEO and NEO payouts to total shareholder return and financial performance, as well as qualitative factors: (i) granted CEO pay vs. TSR; (ii) granted CEO pay vs. financial performance; (iii) CEO STI payouts vs. TSR; (iv) total granted NEO pay vs. financial performance; (v) CEO compensation-actually-paid (CAP) vs. TSR; and (vi) qualitative factors as a downward modifier. Generally, companies with a weaker pay for performance alignment based on their score at a "Severe Concern" (0 to 20 points) or "High Concern" (20 to 40 points) level will receive a negative say-on-pay recommendation from Glass Lewis.
• Anticipate SEC Compensation Disclosure Rationalization. The SEC Staff is currently examining whether its executive compensation disclosure regime still meets the goal of "clear, concise and understandable" information that is material to investors and what changes should be made to the disclosure rules. While proposed rulemaking is expected as part of the "rationalization of disclosure practices" on the SEC's regulatory agenda for April 2026, any formal adoption of new or revised rules likely will not be implemented until well after the 2026 proxy season. Until then, companies can evaluate how they approach disclosures in areas of focus for the SEC (such as those addressed during the June 2025 roundtable discussed here) and remain vigilant about reviewing interpretations and other guidance from the SEC Staff.
• Review Perquisites. Perquisites continue to be a complex area of disclosure. Although personal use of a corporate aircraft is generally the most scrutinized CEO perquisite, security services, including personal, residential, and cyber-related security services have received attention, particularly following the tragic December 2024 fatal shooting of the UnitedHealth Group CEO and other instances of workplace violence. A majority of S&P 100 companies require their CEO to fly private as part of the company's broader security policy (See FW Cook's 2025 Executive Perquisites Report). Amid growing pressure including at the SEC Roundtable on Executive Compensation Disclosure (discussed here), the SEC Staff appears to be reconsidering its prior guidance that costs relating to executive security, including use of private aircraft, are not "directly and integrally related to the executive's duties" (and therefore perquisites). BlackRock's voting guidelines now explicitly reference executive perquisites, noting that it seeks to understand the rationale for certain benefits, such as security, and whether the compensation committee regularly evaluates their appropriateness.
• Plan for CEO Succession. With CEO turnover reaching record levels, boards face heightened pressure to reinforce succession planning processes and build deeper leadership pipelines. A November 2025 report by The Conference Board, Egon Zehnder, ESGAUGE and Semler Brossy notes that CEO succession announcements by S&P 500 companies over the last year increased to 13% as of October 2025 (up from 10% in 2024). This trend reflects broader market volatility, activist pressure, and shifting investor expectations around leadership stability. In this environment, effective succession planning requires boards to evaluate a wider slate of candidates, prepare for both long-term and emergency transitions, and identify the mix of skills and strategic priorities that will reassure investors that strong leadership is both in place and actively being developed. Robust planning not only supports continuity but also mitigates the risk of disruption to strategy, operations, and overall performance.
• Consider Equity Grant Policy Disclosure. 2026 marks the second year in which companies must comply with Item 402(x), which requires companies to disclose policies and practices relating to stock option and stock appreciation right (SAR) awards granted in relation to the disclosure of material non-public information (MNPI). Companies that grant options, SARs, or similar awards should closely coordinate board and compensation committee calendars to avoid scheduling grant dates near expected MNPI releases—such as earnings announcements or periodic report filings. Companies may also wish to adopt policies that prohibit equity award grants during the window starting four business days before the disclosure of MNPI and one business day after such disclosure consistent with Item 402(x) and align disclosure accordingly.
• Clawback Reminder. For companies that had restatements in the last year, be mindful of required clawback obligations and disclosure. As discussed in the 10-K Alert, disclosure is required in the annual meeting proxy statement and Form 10-K (which may be incorporated by reference from the proxy statement) of actions to recover erroneously awarded compensation. Where the issuer was required to prepare an accounting restatement during or after the last completed fiscal year, Item 402(w) of Regulation S-K requires disclosure where (i) the issuer was required to recover erroneously awarded compensation pursuant to the issuer's NYSE/Nasdaq mandated clawback policy, or (ii) the issuer has concluded that such recovery was not required.

To view the full article, click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.