Preparing for the 2026 proxy season

For United States public companies, the drafting of the proxy statement and its filing with the US Securities and Exchange Commission (SEC) are integral parts of preparing for the annual meeting of shareholders. The proxy statement is not only required for compliance with SEC disclosure requirements, but it is also the primary document for communicating important information to shareholders, such as corporate governance matters and responsible business practices.

For the 2026 proxy season, public companies will prepare their proxy statements against the backdrop of the SEC’s policy change regarding the shareholder proposal process, scrutiny of the practices of proxy advisory firms, and evolving disclosure expectations.

In this article, we discuss these and other key developments and challenges for public companies when drafting their proxy statements and preparing for their annual shareholder meetings.

Background

The proxy statement, in the form of Schedule 14A of the Securities and Exchange Act of 1934 (Exchange Act), must be prepared and filed with the SEC by public companies in order to solicit proxies to vote at annual meetings in connection with the election of directors. For 2026, there are no new disclosure requirements under Schedule 14A, but companies are encouraged to take the following items into account as they prepare for the 2026 proxy season:

• Changes to the shareholder proposal process and scrutiny of Exchange Act Rule 14a-8
• Challenges to the practices of proxy advisory firms
• Evolving institutional investor voting guidelines and practices
• Executive compensation disclosure trends
• Voluntary disclosures of diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) practices
• Use of board skills matrices
• Shareholder engagement
• Item 405 disclosures and the impact of the EDGAR Next transition
• Retail shareholder voting programs

Getting started

Preparing the proxy statement often calls for a multi-disciplinary team that includes the corporate secretary, in-house and outside counsel, executive compensation personnel and consultants, financial printers, and proxy agents. Companies are encouraged to organize working teams, delegate responsibilities, and develop timelines to meet the legal requirements for preparing, filing, and distributing the proxy statement.

Developing a timeline

The date of the annual meeting will determine the proxy statement preparation process. Once a company picks a date, it is encouraged to develop a timeline that takes the following requirements into account:

• The record date (i.e., the date that determines which shareholders are entitled to vote at the annual meeting – typically between ten and 60 calendar days before the meeting)
• A broker search (20 business days before record date)
• Notification of the record and meeting date to the New York Stock Exchange (NYSE), if applicable (ten calendar days before the record date)
• Incorporation by reference of Form 10-K Part III information (the proxy statement must be filed 120 calendar days from fiscal year end)
• The notice and access compliance deadline (pursuant to Exchange Act Rule 14a-16, companies must file proxy materials with the SEC 40 calendar days before the meeting date)

In addition, if a company receives a shareholder proposal, it must consider deadlines for the following:

• The shareholder proposal (must be submitted at least 120 calendar days before the anniversary of the date of distribution of the company’s proxy materials in the previous year)
• Notification to shareholder of the company’s intent to exclude the proposal (due within 14 calendar days from receipt of the proposal)
• The shareholder’s response to the notice to exclude the proposal (due within 14 calendar days from receipt of the company’s notice)
• The company’s notification to the SEC of its intent to exclude the shareholder proposal or request no-action relief (due at least 80 calendar days prior to the filing of the definitive proxy statement)
• The opposition statement to the proposal to the proponent (due 30 calendar days prior to the filing of the definitive proxy statement)

Annual meeting agenda and proxy filing deadline

The agendas for most companies’ annual meetings include the election of directors, ratification of independent auditors, and approval of the executive compensation program (say-on-pay). In addition, some companies may ask shareholders to vote on incentive plans, the frequency of the say-on-pay vote, or shareholder proposals. These topics are considered routine, and companies may file their proxy statements in definitive form. Definitive proxy statements must be filed with the SEC on the date that proxy materials are first sent to shareholders.

Any agenda item outside of these topics, such as corporate charter amendments or approval of significant transactions, will require companies to file their proxy statements with the SEC in preliminary format at least ten calendar days before filing and distributing them in definitive form. During this ten-day period, the SEC may comment on a company’s proxy statement, which companies should resolve with the SEC prior to filing the definitive proxy statement. Companies may file and distribute their proxy statements in definitive form if they have not received comments from the SEC by the expiration of the ten-day period.

Gathering information

Disclosure requirements under Schedule 14A call for information from both internal and external sources, necessitating collaboration between multiple parties, including independent directors, company executives, relevant personnel, and service providers. Companies may gather much of the required disclosure for the proxy statement through a director’s and officer’s questionnaire (D&O questionnaire), which is sent to companies’ officers, directors, and director nominees usually at or near the end of the fiscal year.

Accordingly, companies are encouraged to:

• Establish a data gathering process months before drafting the proxy statement and assign responsibility to relevant parties
• Update and distribute D&O questionnaires as early as possible, allowing sufficient time for review and any necessary follow-up
• Contact relevant service providers and inform them of relevant dates, including record, meeting, and projected proxy statement filing and distribution dates
• Allocate time for the drafting and review of certain sections of the proxy statement by external advisors, as relevant, in the preparation timeline

Recent SEC guidance

In January 2026, the SEC’s Division of Corporation Finance issued new guidance in the form of Compliance and Disclosure Interpretations (C&DIs) that address aspects of the proxy statement preparation and distribution process, including broker search requirements, executive compensation disclosure for companies that have been spun off, and notices of exempt solicitations.

Flexibility regarding conducting the broker search

Exchange Act Rule 14a-13(a) requires a public company to send a notice and inquiry to the record holders of its common stock (e.g., brokers, dealers, banks, and other fiduciaries) to obtain information regarding the underlying beneficial owners on whose behalf the shares are held, to ensure that an adequate number of proxy materials are made available for beneficial holders. This process, referred to as a “broker search,” must be conducted at least 20 business days prior to the record date of the shareholder meeting. The SEC issued new C&DI Question 133.02 to clarify that it will not object if a company fails to conduct a broker search at least 20 business days prior to the record date of a meeting of security holders under Rule 14a-13(a), provided that the company reasonably believes its proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13. The SEC noted that, since Rule 14a-13 was adopted in 1986, technological advancements have allowed for greater coordination among the intermediaries involved in the broker search, shortening the timeframe necessary to conduct the search.

Under the new guidance, companies may have greater flexibility in establishing timelines for mailing their proxy materials, particularly in situations with timing uncertainty or compressed schedules. Companies are encouraged to coordinate with intermediaries and service providers, which typically conduct the broker searches, to determine appropriate timing and to avoid distribution delays.

Executive compensation disclosure following a spin-off

The SEC revised C&DI Question 217.01, which clarifies its fact-specific framework for determining when historical compensation information of a spun-off company’s named executive officers must be disclosed in the company’s proxy statement. The C&DI states that historical compensation disclosure is generally not required where a spun-off company:

• Consists of portions of different parts of the parent’s business,
• Has new management following the spin-off, or
• Otherwise lacks continuity in management roles and responsibilities.

In such cases, the company would be required to disclose compensation awarded to, earned by, or paid to its executive officers in connection with and following the spin-off. In contrast, historical compensation disclosure is generally required if the spun-off company operated one line or division of the parent company’s business and, before and after the spin-off, the executive officers:

• Were the same,
• Provided the same type of services to the company, and
• Provided no services to the parent company.

Companies undergoing spin-offs are encouraged to consider how this guidance may affect the executive compensation disclosure in their proxy statements.

Objections to voluntary Notices of Exempt Solicitation

The SEC revised its prior interpretative position and clarified in C&DI Question 126.06 that it will object to the voluntary submission of a Notice of Exempt Solicitation (PX14A6G filing) under Exchange Act Rule 14a-6(g)(1) (PX14A6G filing) by persons who do not beneficially own more than $5 million of the class of securities specified. Historically, although the rule requires filings for holders of more than $5 million in beneficial ownership, the SEC has not objected to voluntary submissions of PX14A6G filings by persons below this threshold, which has led to widespread voluntary filings over time. However, the SEC noted that in recent years the “vast majority” of PX14A6G filings have been submitted by persons on a voluntary basis primarily to generate publicity, and it expressed concern that the PX14A6G process had deviated from the rule’s intended purpose. Similarly, the SEC also revised C&DI Question 126.07 to remove reference to “voluntary” PX14A6G filings.

While this guidance does not directly impact the proxy preparation process for public companies, it could provide relief against perceived abuses of the PX14A6G filing process, which had allowed shareholder proponents with relatively small holdings in a company’s securities to publicly express their views about a company or its practices without having to file their own proxy statement.

Shareholder proposals and Rule 14a-8

Historically, the SEC’s Division of Corporation Finance staff reviewed and issued informal no-action letters on company requests to exclude shareholder proposals under Exchange Act Rule 14a-8. Those letters, while non-binding, provided practical guidance and risk mitigation for companies deciding whether to omit a shareholder proposal. On November 17, 2025, the SEC announced a significant shift in this practice for the 2026 proxy season. For further information on this policy change, please see this Market Edge blog post.

With the SEC no longer reviewing Rule 14a-8 no-action requests, except for requests invoking the exclusion under Rule 14a-8(i)(1) (proposals not a “proper subject” for shareholder action under state law), companies find themselves in a different paradigm. The change in policy has attracted some industry criticism, including from the Council of Institutional Investors. In a public letter to SEC Chairman Paul S. Atkins, the Council flagged material concerns about the SEC’s announcement and cautioned that boards that omit proposals in reliance on the new process should expect special scrutiny from investors if companies appear to use the new pathway to silence legitimate proposals. Following the SEC’s announcement, Institutional Shareholder Services (ISS) updated its U.S. Procedures & Policies FAQ 91 to emphasize that, despite the SEC stepping back from its traditional Rule 14a-8 “referee” role, there is extensive SEC and judicial precedent on excludability, and companies should provide transparent, defensible rationales for any excluded proposals – otherwise, ISS may treat the exclusion as a governance failure in certain cases. Previously, ISS would recommend voting against directors or the full board when a company excluded a properly submitted shareholder proposal without SEC no-action relief, a court order, or the proponent’s voluntary withdrawal.

The SEC staff’s policy could lower the overall volume of proposals reviewed but increase risk for companies that exclude shareholder proposals without traditional no-action relief from the SEC.

Key takeaways

Companies are encouraged to:

• Work with legal counsel to consider the strength of any exclusion basis and the potential impacts of excluding shareholder proposals, such as legal challenges or adverse reactions from proxy advisory firms, shareholders, and other stakeholders
• Consider disclosing the rationale for omitting any shareholder proposals in their notice of exclusion filed with the SEC under Rule 14a-8(j)

State law considerations and Rule 14a-8(i)(1)

In a keynote address in October 2025, Chairman Atkins questioned whether non binding, precatory proposals are “proper subjects” under Delaware law, signaling that companies could seek exclusion under Rule 14a 8(i)(1) with supporting state law legal opinions or state court decisions, and expressing high confidence that the SEC staff would honor such authority. Accordingly, if precatory proposals are found not to be proper subjects for shareholder action under state corporate law, companies could exclude them from their proxy materials under Rule 14a-8(i)(1). As of the date of this publication, there have been no no-action requests or responses under Rule 14a-8(i)(1) for the 2026 proxy season.

His remarks also referred to Texas SB 1057 as an example of state law requirements relevant to Rule 14a-8(i)(1). Texas SB 1057, which became effective on September 1, 2025, permits eligible nationally listed corporations that 1) have principal places of business in Texas or 2) are listed on a Texas-headquartered stock exchange approved by the Texas Securities Commissioner to opt into Texas Business Organizations Code § 21.373, which limits who may submit proposals. Such companies can adopt provisions in their governing documents that require a shareholder proponent (or group of shareholders) to 1) continuously hold at least $1 million in market value or three percent of voting shares for at least six months before and through the meeting, and 2) to solicit holders of at least 67 percent of the voting power entitled to vote on the proposal. Chairman Atkins suggested that, if a Texas company properly opted into the Texas law and received a shareholder proposal that did not meet the law’s requirements, the proposal “should be excludable” under Rule 14a 8(i)(1) because it is not a proper subject for shareholder action under applicable state law.

Other states could also enact legislation limiting the ability of shareholders to submit proposals at annual meetings. While Chairman Atkins suggests that state laws should govern in such situations, pre-emption questions remain a live point of debate and market speculation. Companies are encouraged to monitor developments in their states of organization, including legislation and litigation, as well as future SEC pronouncements and rulemaking.

Proxy advisory firm challenges and regulatory scrutiny

Historically, many institutional investors have looked to ISS and Glass, Lewis & Co. (Glass Lewis), two leading proxy advisory firms in the US, to provide guidance on how to vote their shares at the annual meetings for their portfolio companies. As a result, some critics of the proxy advisory firms have claimed that ISS and Glass Lewis wield outsized influence in the proxy voting process and voting outcomes, arguing for greater regulation of the proxy advisory firms.

As noted in this Market Edge blog post, on December 11, 2025, President Donald Trump issued Executive Order (EO) 14366, “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors,” which directed an inter-agency effort by the SEC, Federal Trade Commission (FTC), and Department of Labor (DOL) to increase oversight of proxy advisory firms. The EO cited ISS and Glass Lewis in particular for being foreign-owned and controlling more than 90 percent of the proxy advisory firm market. Noting that proxy advisory firm practices are politicized and frequently focus on DEI and ESG considerations rather than the prioritization of investor returns, the EO tasks the SEC Chair with:

• Reviewing and, in some cases, revising or rescinding rules, regulations, guidance, bulletins, and memoranda related to proxy advisory firms and shareholder proposals
• Enforcing anti-fraud provisions concerning material misstatements or omissions in the proxy advisory firms’ voting advice
• Evaluating whether certain proxy advisory firms must become registered advisers under the Investment Advisers Act of 1940
• Considering requiring proxy advisory firms to provide increased transparency on their recommendations, methodology, and conflicts of interest, especially regarding DEI and ESG
• Assessing whether proxy advisory firms facilitate the coordination and augmentation of voting decisions among investment advisers resulting in the formation of a “group” under Sections 13(d) and 13(g) of the Exchange Act
• Examining whether the engagement of proxy advisory firms by registered investment advisers to advise on non-pecuniary factors such as DEI and ESG is consistent with fiduciary duties

In parallel, the EO directs FTC, in consultation with the Attorney General (AG), to investigate whether proxy advisory firms engage in unfair or deceptive methods of competition or practices. The DOL is also directed to consider revisions to regulations and guidance related to the Employee Retirement Income Security Act of 1974 that are consistent with the EO, including examining whether proxy advisory firms should be considered fiduciaries and providing for increased transparency around proxy advisory firm usage, particularly regarding DEI and ESG investment practices.

Prior to the EO, Glass Lewis announced that it would overhaul its business model to deliver greater customization for institutional investors, leveraging advances in artificial intelligence (AI) and smart technology. Beginning in 2027, Glass Lewis will provide a range of voting policies tailored to varied client perspectives instead of a single benchmark policy approach.

Against this federal backdrop, state actors have also begun signaling increased scrutiny of proxy advisory firms and their activities. Florida AG James Uthmeier opened an investigation into ISS and Glass Lewis focused on potential misrepresentations of their ESG- and DEI-related policies under the Florida Deceptive and Unfair Trade Practices Act and whether these proxy advisory firms use their market power to advance political agendas to the detriment of maximizing shareholder value. In addition, Missouri AG Catherine Hanaway opened an investigation into, and filed separate lawsuits against, ISS and Glass Lewis on the basis that these proxy advisory firms prioritize DEI and ESG over shareholder value.

State legislatures have also taken action. In June 2025, the State of Texas adopted SB 2337, which attempts to regulate proxy advisory firms providing services to any public company organized in Texas, headquartered in Texas, or pursuing a Texas re-domicile. SB 2337, which went into effect September 1, 2025 and has been challenged in court by ISS, requires proxy advisory firms to make certain disclosures for advice related to Texas publicly traded entities, including when such advice relied wholly or in part on non-financial factors such as ESG and DEI.

Separately, SB 2676, currently under consideration in the State of Mississippi, would similarly require proxy advisory firms to make specified disclosures depending on whether their recommendations are based on written financial analyses. In Oklahoma, a pending bill, HB 4429, would require proxy advisory firms to provide clear disclosure when recommending votes for non-financial reasons, premised on findings that some benchmark policies have urged ESG- or DEI-driven votes without providing accompanying financial analyses despite stated shareholder value objectives. Iowa’s Senate Study Bill 1056, which is currently pending in committee, would require proxy advisory firms to conduct and document an analysis demonstrating that a recommended vote is in the best economic interests of shareholders when the recommendation on a shareholder‑sponsored proposal is inconsistent with the board of directors’ recommendation, and to disclose both the vote and the analysis in an annual report to the state treasurer.

If they survive legal challenge, new regulations by states or federal agencies such as the SEC could result in requirements for proxy advisory firms to provide additional information regarding their policies and practices, which could enhance companies’ ability to understand and, when necessary, challenge adverse proxy advisory firm recommendations. New regulations could also limit the vote recommendations of the proxy advisory firms or cause them to change their business practices or scope of their advisory offerings. Furthermore, advances in technology, such as AI, could make it easier for institutional investors to develop in-house tools for proxy voting advice tailored to their own mandates or objectives, instead of relying on the services of the proxy advisory firms.

Key takeaways

Companies are encouraged to:

• Understand which of the proxy advisory firms may be more influential with their key institutional investors and how their current voting guidelines may impact voting outcomes
• Provide disclosures in the proxy statement that address potential issues that could cause negative recommendations by ISS or Glass Lewis, as proxy advisory firms rely primarily on proxy statement disclosures in making their voting recommendations
• Review the most recent updates to the benchmark voting guidelines of ISS and Glass Lewis (see this Market Edge blog post)

Changes to institutional investor voting guidelines and practices

Internal re-alignments in the stewardship programs of key institutional investors, including BlackRock and State Street, are reshaping how proxy voting policies are set and executed, particularly on board racial and ethnic diversity and environmental matters. Stewardship within those entities is moving from a single, centralized program to multiple tracks with distinct mandates, decision makers, and voting frameworks, potentially creating different policies and voting outcomes.

BlackRock formally divided its stewardship activities between BlackRock Investment Stewardship (BIS) and BlackRock Active Investment Stewardship (BAIS). State Street also re-tooled its stewardship operating model to offer distinct pathways, maintaining a core Asset Stewardship Team while introducing a Sustainability Stewardship Service for clients prioritizing sustainability themes. These organizational changes could add complexity for companies, which may now need to navigate the variances in the voting guidelines of the different stewardship teams and engage with multiple teams and new contacts at the same investor.

Companies are encouraged to understand which institutional investors hold significant positions in their stock, as well as understand voting guidelines on issues that may impact them. In some instances, institutional investors have relaxed previously prescriptive policies on board diversity or other ESG-related topics and have adopted more principles-based approaches.

For example, BIS removed the term “diversity” from its 2026 proxy voting guidelines and eliminated the expectation for companies to disclose their approaches to DEI and workplace demographics. It instead encouraged companies to disclose matters such as workforce size; composition; compensation; engagement; turnover; training and development; working conditions; and health, safety, and wellbeing, among other possible topics. The guidelines also replace prior references to “diversity” with language such as “a variety of experiences, perspectives, and skill sets.” Meanwhile, references to “professional and personal characteristics” were replaced with “qualifications.”

Some institutional investors have announced they will no longer rely on the services of the proxy advisory firms. In January 2026, JP Morgan Asset & Wealth Management announced that it would no longer use external proxy advisory firms for its stewardship activities in the US, replacing them with its own AI-powered platform, ProxyIQ. Similarly, Wells Fargo Wealth & Investment Management announced the launch of its proprietary proxy voting service, allowing it to direct proxy voting based on its “own custom policy and voting instructions focused on clients’ long-term economic interests.” Wells Fargo added that its service would streamline the proxy voting process and reduce reliance on third parties.

Key takeaways

• Changes to proxy voting guidelines and institutional investor practices could call for changes to companies’ shareholder engagement strategies
• Companies are encouraged to review their key investors’ voting policies and address potential issues through their proxy statement disclosures and engagement meetings

Executive compensation

The SEC has identified executive compensation, which constitutes a key part of a company’s proxy statement, as an area needing disclosure reform. When drafting their proxy statements, companies are encouraged to consider market trends and changes that may be proposed in the near term by the SEC to executive compensation disclosure rules under Item 402 of Regulation S-K.

Executive compensation trends

According to ISS-Corporate’s 2025 U.S. Compensation Post-Season Review report (a summary of the key findings is available for request here), median CEO pay continues to rise, most of which, in recent years, has been driven by the increase in value of long-term incentives. CEO short-term incentive pay-outs have also outpaced the rate of increases to base salary levels.

In addition, say-on-pay support levels have generally bounced back to the approximate levels applicable before the COVID-19-era dip, due to fewer instances of discretionary pay adjustments and one-time grants. According to Semler Brossy’s 2025 Say on Pay + Proxy Vote Results report, 2025 say-on-pay average approval rates were approximately 90 percent compared to a failure rate of only 1.4 percent.

Disclosures by companies regarding their explicit use of DEI and ESG factors as incentive metrics has declined. However, it appears that many companies are still taking such factors into consideration subjectively.

Increased investor focus

Investors may focus on mid-stream adjustments made to performance compensation goals in 2025, whether in response to tariff or economic shifts or other factors. Companies that implemented such adjustments are encouraged to clearly communicate in their disclosures the underlying rationale and business case for making them and why they were deemed necessary to provide adequate incentives to align with investor interests.

Similarly, companies that provided one-time equity grants in 2025 in light of market uncertainty are encouraged to carefully craft their disclosures, as the use of such one-time equity grants has declined in recent years. Those grant practices are often linked to increased risk of a negative ISS voting recommendation for the election of compensation committee members and company-sponsored compensation-related proposals, such as the say-on-pay vote.

This proxy season, institutional investors may pay close attention to details surrounding long-term incentive disclosures, particularly where there is concern for pay-for-performance misalignment. Companies with complex performance goal designs are encouraged to consider how transparent their disclosures are to investors. Similarly, companies that made changes to their performance metrics, weightings, or other long-term incentive program designs in 2025 are encouraged to explain the business reasons for such decisions and how the changes align with creating incentives tied to long-term value for investors, especially if such compensation decisions are not reflective of market practice followed by peer companies.

SEC roundtable on executive compensation disclosure

In June 2025, the SEC held a roundtable, which was the first of a multi-step process for evaluating whether the existing disclosure requirements meet the rules’ objectives and what changes should be made to modernize and streamline the existing disclosure rules. In his introductory remarks, Chairman Atkins referred to the current disclosure requirements as a patchwork of rules that had evolved over more than three decades. These sentiments were echoed by other SEC representatives and a majority of the speakers at the roundtable.

The discussion focused on the burden and expense to companies of complying with the current executive compensation disclosure requirements, examples of misalignment with investor concerns, and potential approaches for modernizing the current executive pay disclosure regime. Potential modernization changes included streamlining and simplifying existing table disclosures in order to reduce the disclosure burden on companies and presenting the equity award life cycle more clearly to better align it with investors’ concerns. Interest in these priorities was reflected in public comments to the SEC emphasizing the need to modernize disclosures following the roundtable. For more information regarding the roundtable, please see this Market Edge blog post.

The SEC may propose amendments to the executive compensation disclosure rules that will scale back the current disclosure requirements. While the exact timing for implementation remains uncertain, the SEC is expected to propose new executive compensation disclosure rules in the first half of 2026, with potential final adoption in late 2026 or early 2027. Compliance would likely begin in late 2027 or early 2028.

Key takeaways

When drafting the “Compensation & Disclosure Analysis” section of the proxy statement, companies are encouraged to:

• Provide the underlying rationale for mid-period adjustments to performance metrics and why such adjustments were deemed necessary
• Explain the purpose of any one-time equity grants and how such grants are aligned with long-term shareholder interests

DEI disclosures

The 2025 proxy season was marked by a significant decline in the number of companies disclosing DEI-related information, including board gender and ethnic/racial diversity. As noted in this DLA Piper alert, 2025 saw certain institutional investors make changes to their voting guidelines that removed or de-emphasized board diversity disclosure or composition requirements. This followed the US Court of Appeals for the Fifth Circuit’s decision invalidating Nasdaq’s board diversity rules in December 2024 and the Trump Administration’s EO and other policies seeking to eliminate DEI programs in early 2025.

In examining proxy statements filed in 2025 by S&P 500 companies, DLA Piper’s Corporate Data Analytics team found that approximately 61 percent of these companies disclosed graphics and other information regarding their board’s gender and racial/ethnic composition (i.e., board diversity data) in their proxy statements. This represented an approximately 35-percent decrease in the percentage of companies that provided board diversity data in their proxy statements in 2024. For more information regarding DEI disclosure trends, see Appendix A.

Voluntary disclosure of DEI information in proxy statements, on company websites, and on social media could subject companies to increased scrutiny and enforcement actions from federal and state regulatory authorities. Some companies have also been subject to shareholder activism because of their DEI disclosures. For example, a large financial institution recently announced plans to remove DEI considerations from its corporate board selection policies after receiving a shareholder proposal seeking to have the company eliminate its board diversity policy. However, companies may consider balancing the pressure to dismantle DEI programs or reduce DEI disclosure against possible strategic and operational impacts, as well as against shareholder expectations.

Key takeaways

• Companies are encouraged to consider a holistic approach in analyzing and determining what, if any, diversity information to include in their proxy statements
• When describing their DEI practices and policies in their proxy statements, companies are encouraged to evaluate them in terms of their overall human capital policies and practices and how they contribute to companies’ operational and financial performance

ESG and sustainability disclosures

Schedule 14A does not mandate the disclosure of ESG information, though many companies have voluntarily disclosed such information in their proxy statements and elsewhere over the last several years. As noted in this DLA Piper alert regarding preparing Form 10-K for 2025, the SEC under Chairman Atkins’s leadership has signaled that it does not intend to pursue ESG-related rulemaking, as evidenced by the public statements of SEC commissioners, the SEC’s decision not to defend its 2024 climate disclosure rules against legal challenges, and its most recent rulemaking agenda, which did not include prior ESG-related items such as human capital reporting and board diversity (please see this Market Edge blog post for more information on the SEC’s Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions).

ESG continues to face legal and regulatory headwinds more broadly. As noted above, the Trump Administration highlighted in its EO proxy advisory firms’ purported support for ESG policies, stating “proxy advisors regularly use their substantial power to advance and prioritize radical politically-motivated agendas — like [DEI] and [ESG] — even though investor returns should be the only priority.” Several states have enacted legislation that seeks to remove ESG considerations from state and local pension funds’ investment decisions or prohibit state and local entities from doing business with firms or asset managers that utilize ESG considerations. There have also been legal challenges to state and federal regulations that are perceived to promote ESG policies.

Nevertheless, some institutional investors and other stakeholders, such as customers and employees, may urge companies to maintain and disclose ESG programs and policies or demonstrate oversight of ESG-related risks. Failure to provide ESG information could prompt activist shareholders to submit proposals seeking ESG disclosures or actions. Furthermore, directors at companies that fail to address ESG risks may be subject to “no” or “withhold” votes in connection with their elections under certain institutional investor voting guidelines. Alternatively, they may be subject to proxy fights, which could receive institutional investor backing.

Accordingly, many companies continue to provide ESG-related disclosures in their proxy statements. According to research conducted by DLA Piper’s Corporate Data Analytics team, approximately 79 percent of S&P 500 companies provided ESG disclosures (excluding ESG metrics related to executive compensation plans) in their 2025 proxy statements, which represented a slight decrease from approximately 84 percent of S&P 500 companies providing such disclosures in their proxy statements in 2024. For more information on ESG disclosure reporting trends, see Appendix A.

Key takeaways

Given the legal and regulatory developments regarding ESG, companies may evaluate their prior disclosures and carefully consider what to disclose in their proxy statements regarding ESG-related matters.

When drafting ESG-related disclosures for the proxy statement, companies are encouraged to:

• Use their proxy statement disclosures to show how their ESG-related initiatives contribute to their specific strategic goals and decrease business risk
• Consider feedback from shareholders and other relevant stakeholders in deciding whether to reduce ESG disclosure
• Align proxy statement disclosures with any ongoing international reporting obligations, such as Australia’s Corporations Act 2001, Mexico’s Sustainability Reporting Standards, Singapore’s Sustainability Reporting Standards, and the United Kingdom’s Climate-Related Financial Disclosure Regulation
• Monitor for forthcoming disclosure requirements under California’s Climate Corporate Data Accountability Act (SB 253), the European Union’s Corporate Sustainability Reporting Directive (CSRD), and other international sustainability disclosure regimes and ensure consistent proxy statement disclosure as applicable
• Consider whether customers and other stakeholders should be considered when making these disclosure decisions
• Carefully assess the bases of the various assumptions and projections that management will rely upon if establishing new ESG goals and strategies to ensure they can be reasonably achieved

Board skills matrices disclosure

Many companies now voluntarily include board skills matrices that allow shareholders and other proxy statement readers to more easily identify the specific skills and backgrounds of each board member and how they contribute to the board’s ability to provide oversight of and strategic advice to the company. A skills matrix can also identify gaps in the board’s competencies and improve the board refreshment process. Especially for companies in industries related to new technologies, demonstration of skills and experience in areas such as cybersecurity, AI, and digital assets may satisfy potential investor concerns about the board’s composition.

In addition, Item 7 of Schedule 14A requires companies to disclose the board’s role in providing oversight of risk. A board matrix may help to establish that the board has the requisite knowledge and experience to oversee the company’s risks. Shareholders and other stakeholders have demonstrated a strong interest in companies’ use of AI – whether to support its operations or as key strategic initiative – and how boards oversee AI-related risks. The use of a board matrix may be helpful in supplementing a company’s disclosure related to its management of AI and other risks.

The use of the board skills matrix is prevalent at large public companies. The DLA Piper Corporate Data Analytics team examined proxy statements filed in 2025 by S&P 500 companies and found that almost 80 percent of them contained a board skills matrix. However, this represented a slight decline from approximately 86 percent of S&P 500 companies that provided a board skills matrix in their proxy statements in 2024. The skills that were most frequently included in these matrices were finance/accounting, leadership, and technology. See the table below for the top skills included in board skills matrices for S&P 500 companies in 2025 and 2024.

Skill disclosed in matrix (2025)	Percentage of S&P 500 companies including skill in matrix (2024)	Percentage of S&P 500 companies including skill in matrix (2025)
Finance and/or accounting	99%	95%
Leadership	98%	90%
Industry or sector-specific experience	94%	81%
Technology (exclusive of cybersecurity)	84%	78%
Cybersecurity	64%	58%
Global operations and/or supply chain	63%	65%
Public policy, government, and/or regulatory	62%	65%
Public company board experience	54%	43%
Human capital management and/or DEI	53%	52%
Sales, marketing, and/or customer relations	53%	50%
ESG/sustainability	51%	52%
Corporate governance	41%	41%
Mergers and acquisitions	35%	29%

Companies considering the inclusion of board skills matrices in their proxy statements may solicit relevant information in the directors’ and officers’ questionnaire (D&O questionnaire), which is often used to collect information needed for a company’s Form 10-K and proxy statement.

Key takeaways

Companies planning to include a board skills matrix are encouraged to:

• Reflect any changes to the matrix caused by the election and departure of board members since the last proxy statement
• Scrutinize responses in D&O questionnaires to ensure that directors’ experiences are representative of their skills or backgrounds, which can help ensure the matrix’s accuracy and usefulness

Shareholder engagement

A robust shareholder engagement process may help to facilitate a successful voting outcome at a company’s annual meeting. By actively engaging with shareholders, companies can address concerns before they escalate, build trust, and demonstrate a commitment to good governance, which may lead to stronger support from institutional investors in future meetings.

As we noted in a prior DLA Piper alert, in February 2025, the SEC issued a C&DI clarifying that certain engagement activities by large institutional investors holding more than five percent of a company’s securities could be viewed as attempts to exert control over a company that would disqualify those investors from reporting their beneficial ownership of the company’s stock on Schedule 13G. The guidance implicated activities such as recommending the removal of a staggered board, switching to a majority voting standard, eliminating a poison pill plan, changing executive compensation practices, or advocating for specific social, environmental, or political policies. As a result, some institutional investors may opt for a more passive form of engagement, putting the burden on companies to anticipate topics for discussion and to set the agenda for engagement meetings.

The SEC’s guidance and resulting changes in some investors’ engagement practices may highlight the role of the proxy statement as an engagement tool. Companies may use their proxy statements to address potential issues or areas of concern. Proxy statement disclosure also reaches a wider audience, including smaller institutional investors, retail shareholders, employees, and other stakeholders, with whom a company would not ordinarily engage outside of the annual meeting process.

It may be prudent for companies to disclose their shareholder engagement activities in their proxy statements, as proxy advisory firms may recommend against directors at companies deemed to be unresponsive to shareholder concerns. In describing its engagement efforts in the proxy statement, a company may include in its disclosure:

• The number or percentage of outstanding shares held by the shareholders that the company tried to engage
• The number or percentage of outstanding shares held by the shareholders with whom the company actually engaged
• The participants from the company, including the involvement of board members
• The specific feedback received
• Actions taken by the company in response to shareholder feedback

Such disclosures can demonstrate a company’s willingness to strengthen relationships with its key shareholders, which could prove useful in the event of a negative proxy advisory firm recommendation or an activist shareholder threat.

Key takeaways

Companies are encouraged to:

• Understand and address important issues for key investors in their proxy statement disclosures, including corporate governance and operational matters
• Provide robust proxy statement disclosures regarding areas such executive compensation, corporate policies, and governance to potentially reduce the need for additional engagement meetings with key shareholders
• Disclose their outreach and the results of their actual engagement meetings with investors since their last annual meeting

Item 405 disclosure and the impact of the EDGAR Next transition

In 2025, the SEC introduced EDGAR Next, an updated platform for managing filer accounts, and retired its legacy EDGAR system. Filers transitioned to EDGAR Next beginning in March 2025, and use of the new platform became mandatory on September 15, 2025. Phased onboarding and transition challenges resulted in late Section 16(a) reports by some company insiders who were unable to complete EDGAR Next enrollment or secure new filing credentials in time.

Item 405 of Regulation S-K imposes a bright-line requirement to disclose any known untimely Section 16(a) reports during the most recent fiscal year. Accordingly, companies should treat any late Section 16 filings resulting from the EDGAR Next transition like any other late reports and disclose them clearly and accurately in their 2026 proxy statements.

Retail shareholder voting programs

On September 15, 2025, the SEC staff issued a no-action letter permitting a voluntary, no-cost Retail Voting Program, concluding that it would not recommend enforcement under Exchange Act Rules 14a-4(d)(2) and 14a-4(d)(3) if the program was implemented as described.

The SEC staff emphasized that its position was based on the specific facts and representations set out in the company’s no-action request. The company’s retail shareholder program includes the following features:

• The program is voluntary, offered at no cost, and equally available to all retail investors – both registered holders and beneficial owners through banks, brokers, or plan administrators – with each eligible investor offered the same opportunity to enroll
• The program excludes investment advisers registered under the Investment Advisers Act of 1940 when they exercise voting authority over client securities
• Participating retail shareholders receive annual reminders of their opt-in status and standing selection during periods in which the company is not soliciting votes for its annual meeting
• Participants retain the right to opt out at no cost for future meetings and to override their standing instruction with respect to any particular proposal after definitive proxy materials are filed for that meeting
• Participating shareholders receive all proxy materials for upcoming meetings, and the program may not be used to limit or restrict shareholders from voting using those materials at any time
• The company makes a full disclosure of the program on its website and proxy statement

While no similar no-action requests have been submitted to date, the SEC staff’s response signals openness to other companies adopting substantially similar programs without seeking individualized no-action relief, provided that the program echoes the features of the company’s program and the investor-protection features cited by the staff’s no-action letter. Companies proposing departures from that entity’s approach may consider seeking their own no-action relief.

Conclusion

As previously noted, while there are no new disclosure requirements for the proxy statement this year, there are a number of relevant trends for companies to consider as they prepare for their 2026 annual meetings. By this time next year, there may be substantial changes to proxy statement disclosure requirements and to the proxy solicitation process resulting from regulatory actions by the SEC or state legislatures, private ordering due to changes in investor views and practices, and innovation. As companies seek to anticipate when and how some of the potential changes noted above may materialize, they are encouraged to focus on communicating the long-term value they provide as they draft their proxy statements for 2026. Taking appropriate steps to address shareholder concerns through active engagement and robust disclosure may be key for a successful annual meeting.

 

Appendix A

Proxy statement disclosures of S&P 500 companies in 2025 compared to 2024

Disclosure level*	Percentage of S&P 500 companies providing DEI disclosure	Percentage of S&P 500 companies providing ESG/sustainability disclosure
Substantially less	63.29%	28.14%
Less	17.44%	21.66%
Substantially similar (including where no disclosure is provided either year)	18.46%	47.98%
More	0.61%	1.62%
Substantially more	0.20%	0.60%

_{* “Substantially less” or “substantially more” indicates that entire paragraphs of disclosure (including graphics) were added or deleted.}

_{“Less” or “More” indicates that some disclosure was added or deleted, but that much of the original disclosure remained intact.}

_{“Substantially similar (including where no disclosure is provided either year)” indicates that the company only made minor and year-over-over changes.}

Proxy statement disclosures of S&P 500 companies in 2025

Disclosure	Percentage of S&P 500 companies providing disclosure in 2025
Board diversity	61.13%
Workforce diversity (including EEO-1 data)	21.86%
Skills matrix	79.55%
ESG	79.35%
Used term “ESG”	45.55%
Change from “ESG” to “sustainability”	21.26%
Referenced external sustainability report	69.84%
ESG disclosure limited to reference to external sustainability report	17.00%