Recent Developments for Directors — November 2026

Companies Prepare for 23 Hour Trading Implementation

The SEC has approved Nasdaq and NYSE proposals to extend trading to nearly around the clock. The new rules expand daily trading to 23 hours (with a one hour pause from 8 to 9 p.m. ET), five days per week, effective December 6, 2026. The change does not immediately affect SEC reporting deadlines or Regulation FD compliance, but companies are reviewing governance policies, disclosure controls, and processes for equity plan administration and corporate actions that were developed around an overnight market close. This includes reviewing terminology in insider trading policies as well as coordinating on logistical matters with brokers, equity plan administrators, trading plan providers, and transfer agents. Companies are updating policies and procedures to address extended hours trading while monitoring implementation.

Companies Optimize Digital Strategies in Response to AI Driven Activism

Companies are updating their websites and other public disclosures with AI bots in mind, and boards are treating AI visibility as part of their enterprise risk oversight and activism preparedness. Activists, short sellers, and others use AI to generate public statements that shape market perceptions, and their commentary may dominate the available AI inputs for companies that fail to make their own content easy for AI bots to find and read. Investors, analysts, and media outlets increasingly rely on AI generated summaries, which can form many stakeholders’ first view of a company.

AI is also beginning to influence voting, as some institutional investors replace proxy advisors with their own AI tools and others turn to widely available chatbots. According to a recent analysis of contested elections, leading AI models fully supported management in only 37% of cases, below the historical rate for traditional proxy advisors. In response, companies are making their digital content easier for AI systems to find and read, aligning website and public disclosures, reviewing how models describe the company, and explaining corporate strategy in clear and concise terms.

SEC Proposes to Eliminate Stockholder Proposal Rule and Reform Proxy Solicitation

The SEC has started the process to rescind its stockholder proposal rule, expand discretionary voting authority, and modernize proxy solicitation rules. Final rules are not expected before the 2027 proxy season. Chairman Paul Atkins described the initiative as one of his “highest regulatory priorities,” viewing the longstanding provision (Rule 14a-8) as outside of the SEC’s statutory authority and urging private ordering, with stockholder proposals to be governed by state law. If stockholder proposals are returned to the states, new frameworks could emerge under state corporation law and companies’ governing documents.

Related SEC changes could affect other aspects of proxy solicitation, including discretionary voting authority for certain proposals omitted from proxy materials, duplicative delivery of an annual report in addition to the Form 10-K filing, and other technical requirements. Boards are reviewing their governing documents and state law, maintaining active stockholder engagement, and preparing for the 2027 proxy season under the existing stockholder proposal regime while monitoring trends for the upcoming proxy season.

Meeting Minutes Continue to Receive Careful Scrutiny

Recent litigation in Delaware courts continues to underscore the importance of meeting minutes in providing an accurate and proportionate record of significant board discussions surrounding major transactions. Corporate records, including minutes, remain subject to stockholder inspection demands. Gaps between proxy statement narrative disclosures and board minutes can persuade courts that stockholders have a credible basis for challenging board actions. Courts may look to minutes and other board materials to resolve conflicting director testimony. In response, boards are reviewing their practices around meeting minutes to ensure their reliability and consistency with board deliberations, public disclosures, and corporate action.