The Securities and Exchange Commission (the “SEC”) has adopted new rules that require public companies to disclose substantial information about the material impacts of climate-related risks on their business, financial condition, and governance (the “Final Rules”).  The SEC says that “climate-related risks, their impacts, and a public company’s response to those risks can significantly affect the company’s financial performance and position.”  

The Final Rules require disclosure of a range of climate-related matters, including:

  • Any material climate-related risks and their impacts on the registrant’s business strategy, results of operations, and financial condition, as well as on the registrant’s outlook and business model.
  • Any activities, plans, or processes to mitigate, adapt to, or manage material climate-related risks, including the use of transition plans, scenario analyses, or internal carbon prices. 
  • Any board oversight and management role in assessing and managing material climate-related risks.
  • Any targets or goals that have materially affected or are reasonably likely to materially affect the registrant’s business, results of operations, or financial condition.
  • Scope 1 and/or Scope 2 greenhouse gas emissions (“GHG”) by certain larger registrants when those emissions are material, and the filing of an attestation report covering the required disclosure of such emissions, in each case, on a phased-in basis. 
  • The financial statement effects of severe weather events and other natural conditions, including costs and losses.

We discuss the Final Rules in our Legal Update.

We also include a table with the text of Subpart 1500 of Regulation S-K and a table with the text of the revisions to Regulation S-X.

Mayer Brown welcomes Dale Baker, Vice President, Trust Policy from the American Bankers Association to our upcoming panel discussion on the FDIC’s Governance Proposal.

Webinar, March 15, 2024

12:00 p.m. ET – 1:00 p.m. ET
Register here.

On October 11, 2023, the Federal Deposit Insurance Corporation (FDIC) issued a far-reaching proposal for new corporate governance and risk management standards for FDIC-supervised insured depository institutions with consolidated assets of $10 billion or more. The proposal has attracted comment letters that were both supportive and critical but all shared a common theme: the proposal would significantly change the regulatory expectations for the boards and managements of covered institutions. Please join a discussion of the proposal with leading banking and governance experts for an explanation of the proposal and an assessment of it potential impacts.

Additional speakers include:

  • Lawrence Cunningham, Special Counsel, Mayer Brown
  • Brandon Milhorn, President and CEO, Conference of State Bank Supervisors
  • Patricia Murphy, Financial Services Consultant, Alvarez & Marsal
  • Andrew Olmem, Partner, Mayer Brown

Debate over ESG continues, with Mayer Brown’s Lawrence Cunningham and corporate director Sonita Lontoh leading a discussion of the topic in the annual Directors & Boards conference entitled Character of the Corporation, which Mayer Brown sponsored. 

For excerpts from the conversation, continue reading here.

The Securities and Exchange Commission adopted (in a 3-2 vote) final rules requiring disclosures about the material impacts of climate-related risks on their business, financial condition, and governance.

These rules had first been proposed in March 2022.  The SEC adopted the final rules after considering, over a two-year period, some 4,500 unique comment letters from various authors. The SEC made some modifications from the Proposed Rules, most conspicuously withdrawing disclosure of greenhouse emissions from the users of a company’s products and services (so-called Scope 3 emissions). 

The SEC observes that many companies currently disclose substantial climate related information but characterizes this disclosure as “partial,” “fragmented,” “inconsistent” and “often difficult for investors to find and/or compare across companies.” The SEC says that its experience with its existing climate disclosure guidelines, in effect since 2010, indicates inadequate disclosures that leave the “need to both standardize and enhance the information available.” It says that “providing these disclosures in [SEC] filings also will subject them to enhanced liability that provides important investor protections by promoting the reliability of the disclosures.”


We acknowledge the insight and assistance of Gary J. Previts, Distinguished University Professor Emeritus, Case Western Reserve University  

As the regulator of public company auditors, following the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) aims to safeguard investors’ interests. The PCAOB establishes auditing standards, reviews audit firms’ performance, and holds them accountable for complying with its rules and the securities laws.

Although the PCAOB does not have direct oversight of board audit committees, its auditing standards and enforcement actions influence their expectations and actions at times.  Lately, the PCAOB has deliberately leveraged its enforcement powers to target audit committees in a “sweep” program.

The PCAOB uses sweeps to investigate a specific type of potential violation across multiple firms simultaneously.  Sweeps involve gathering information from various sources to identify and address common deficiencies.  The latest sweep focused on auditors who failed to communicate properly with audit committees, as required by PCAOB standards.


Corporate directors may feel like mediators at a rock fight, as antagonists that are for or against the “environmental, social and governance (ESG)” movement duke it out.  The rock fight has arisen due to extremism over ESG.  As proponents and opponents fight to a standoff or stalemate, boards can mediate by embracing neither side but instead appreciate that certain legitimate strands underlying the original formulations of ESG are consistent with traditional fiduciary duties and corporate purpose.


Most legal entities like corporations have officers and directors who, together, run the business. Directors sit on the board of directors and collectively govern and oversee the entity.  In contrast, officers generally implement the board’s vision and manage the day-to-day operations of the business.

While it’s widely understood that the roles and responsibilities of officers and directors are distinct from each other, regulators have often merged or confused the concepts.  This can create problems when directors are expected to intervene in the day-to-day purview of management.  In this Legal Update are examples of how regulators have struggled to distinguish the roles of officers and directors, and how this issue continues to impact the compliance obligations of banks and non-bank corporate entities.

Continue reading here.

The SEC announced an open meeting for March 6, 2024 to vote and consider adoption of final climate-related disclosure requirements for public companies. This comes after nearly two years since the SEC first proposed its controversial rules. Based on public statements from SEC representatives, it appears that the SEC will consider rules that do not require companies to report their Scope 3 emissions, which come from indirect sources such as supply chains or consumers.

Mayer Brown’s Larry Cunningham led a group of more than 20 eminent law and finance professors to shape the public debate on the SEC’s proposal, with letters filed in April and June 2022, as well as an update submitted last week pointing out the recent defection of major investors from the Climate Action 100+, a key advocacy group that the SEC has cited as evidence of investor demand for more climate information. Cunningham also testified on the subject at a Congressional hearing in January (testimony may be downloaded here). 

Directors & Boards has published an insightful piece on board composition by Dr. Keith D. Dorsey, Managing Partner and U.S. Practice Leader for CEO & Board Services at Boyden

Board members are responsible for ensuring their board can fulfill its duty of care to the organization. When the board does not have the full range of human capital it needs to do that, results can range from disastrous missteps to organizational death.

For directors to fulfill their duty of care, they must:

  • Engage in ongoing self-examination to identify human capital redundancies, gaps, and misalignments between the board and organizational stakeholders.
  • Take swift action to close gaps and address misalignments.

Directors accept substantial legal and ethical responsibilities when they accept a position on a board, and these responsibilities are assumed collectively. This means that knowing, trusting, and working well with one’s fellow directors is of prime importance. However, the search for a new director rarely, if ever, extends beyond the existing directors’ networks. Filling open seats with “known” individuals may create a sense of safety – but that can be a false and dangerous illusion.

Continue reading at Directors & Boards here.


Director compensation varies considerably around the world, reflecting different director duties, legal and regulatory frameworks, and market expectations.


The United States and Canada, for example, have the highest median total non-executive director compensation, both close to US$200,000, including cash, equity, and other benefits. In both countries, directors are paid additional fees as board and committee leaders, which can increase the median to slightly more than US$300,000 in both countries. The U.S. levels are slightly higher than those in Canada and nearly half of Canadian companies pay their directors in U.S. dollars, reflecting their exposure to the U.S. market. Read More >>