Recent Developments for Directors — August 2026

SEC Proposes Semiannual Reporting, Broad Regulatory Relief for Compliance and Registered Offerings

Sweeping proposals from the US Securities and Exchange Commission would revamp public company reporting and streamline access to public capital markets. The proposals could become effective as early as 2027 or, more likely, 2028.

Companies would be free to choose each year to use one of several methods of reporting their interim financial results. They could switch to semiannual reporting on a newly created Form 10‑S, or they could maintain a quarterly reporting cadence either by filing traditional Form 10‑Q reports or by combining quarterly earnings releases with a semiannual Form 10‑S filing. The SEC’s proposal introduces flexibility and promotes private ordering, although companies will need to weigh the benefits of that flexibility against the implications of departing from established quarterly reporting conventions.

Other proposed changes would expand regulatory relief for public companies:

• An estimated 81% of public companies, representing only 6.5% of total public float, would become exempt from the required auditor attestation of management’s assessment of internal control imposed by Sarbanes-Oxley Section 404(b).
• Automatic shelf registration would become available to all shelf-eligible US domestic public companies after one year of SEC reporting.
• IPO on-ramp accommodations would extend to all newly public companies for at least five years, including relief from the internal controls audit and from say-on-pay advisory votes.

Boards and audit committees are considering possible changes under a new interim reporting process, including effects on disclosure controls, earnings release practices, insider trading policies, and investor relations practices.

Prediction Markets Create New Governance Risks

New risks have emerged with the increasing popularity of prediction markets, where users trade on the outcomes of future events. Regulators are pursuing enforcement actions against employees who make predictive bets on these platforms using confidential company information. Enforcement actions include claims of commodities fraud, wire fraud, and money laundering. In response, companies are reassessing their codes of conduct and insider trading policies and have updated policies to address prediction market risks, while some are relying on existing policy provisions regarding confidentiality or insider trading.

SEC Chair Calls for Reform of Shareholder Proposal System

During last year’s proxy season, the SEC Staff announced a temporary policy directing companies to decide on their own whether to exclude most types of shareholder proposals from their proxy statements. At the time, “dire predictions” claimed that companies would “exclude most or all proposals” or face “litigation risk or adverse recommendations from proxy advisors,” said SEC Chair Paul Atkins recently. “I am happy to report that the world did not end,” he added, noting that exclusion trends in fact remained consistent year-over-year. Lamenting the current system as “woefully ineffective and in desperate need of reformation,” Atkins noted that a single individual proponent this season accounted for 41% of proposals voted on, of which only 8% received majority support. The SEC Staff has now confirmed it will no longer respond to any no-action requests unless and until announced otherwise, ending its longstanding practice of reviewing and responding to company requests to exclude shareholder proposals. Ahead of the 2027 proxy season, boards are weighing the effects on shareholder engagement and proxy season strategy as the shareholder proposal regime faces wholesale reassessment.

Companies Upgrade Cybersecurity Defenses in Response to Autonomous AI Cyberattacks

Recent news coverage of AI-enabled cyberattacks have initiated boardroom discussions of the adequacy of cybersecurity protections in the face of new threats. This summer has seen dramatic advances in the cyber capabilities of frontier AI models, extending even to the capability to conduct an autonomous cyber intrusion. A federal cybersecurity agency has issued guidance treating autonomous AI agents as a distinct attack vector requiring new controls. In response, companies are reviewing incident response plans against attacks that move at machine speed with no human operator; upgrading controls, monitoring, and shutdown capabilities for AI tools and third-party platforms to align with industry standards; and confirming that cybersecurity governance disclosures, as required by SEC rules, reflect autonomous AI capabilities and companies’ defenses against them.