Welcome to Goodwin's Public Company Advisory News Roundup, which highlights the latest developments with SEC and stock exchange regulatory activity, corporate governance and other topics relevant to public company counseling and compliance.
In this issue
- SEC Updates Eighth Circuit on Climate Disclosure Rules
- House Appropriations Subcommittee Proposes to Reduce SEC Budget
- SEC Addresses PCAOB Leadership Changes
- Proxy Advisory Firms Launch Annual Policy Surveys
- ISS and Glass Lewis Sue to Overturn Texas Proxy Advisor Law
1SEC Updates Eighth Circuit on Climate Disclosure Rules
On July 23, 2025, the Securities and Exchange Commission ("SEC") provided a status update on the SEC's climate disclosure rules in the litigation currently pending in the U.S. Court of Appeals for the Eighth Circuit. See State of Iowa v. Securities and Exchange Commission, 24-cv-1522. In the status update, the SEC indicates that it does not intend to review or reconsider the climate disclosure rules that were adopted in March 2024. The SEC also requests that the court lift the current stay on the litigation and continue considering the parties' arguments regarding the scope of the agency's power to adopt the climate disclosure requirements. In the status update, the SEC states: "[i]f the Court were to uphold the Rules in whole or in part, any reconsideration of them would be subject to Commission deliberation and vote of its members, and the Commission cannot prejudge that action. Moreover, a decision from this Court would inform the scope and need for such action, including providing insights as to the Commission's jurisdiction and authority." Commissioner Caroline Crenshaw issued a separate statement criticizing the scope and substance of the SEC's status update, noting: "[i]f this Commission wants to rescind, repeal or modify the Rules, which were promulgated by-the-book, then it must do the statutorily-required work."
2House Appropriations Subcommittee Proposes to Reduce SEC Budget
On July 21, 2025, Financial Services and General Government Subcommittee of the U.S. House of Representatives Committee on Appropriations voted to approve a $23.3 billion plan for funding the U.S. government's financial services oversight functions in fiscal year 2026, including the SEC. The proposed budget would represent a 7-8% spending cut for the SEC as compared to fiscal year 2025. In addition, the proposed budget includes a number of express restrictions against using funds to implement specified programs, including: (i) enforcing the cybersecurity disclosure rules that the SEC adopted in 2023; (ii) reviewing or approving the budget for the Financial Accounting Standards Board ("FASB") until the FASB withdraws the Accounting Standards Update on Income Tax Disclosures issued in December 2023; or (iii) developing, promulgating, finalizing, implementing, or enforcing rulemaking that would, directly or indirectly, create new disclosure requirements under Regulation D or lower the amount of money that an issuer can raise through Regulation D.
3SEC Addresses PCAOB Leadership Changes
On July 21, 2025 the SEC announced the designation of George R. Botic to serve as Acting Chair of the Public Company Accounting Oversight Board ("PCAOB"), effective July 23, 2025. Previous PCAOB Chair Erica Y. Williams resigned from her position, effective July 22, 2025. Mr. Botic has served as a PCAOB Board Member since October 2023. Prior to joining the Board, he served as the Director of the PCAOB's Division of Registration and Inspections. On July 25, 2025, SEC Chairman Paul Atkins announced that the SEC is soliciting applications for all five PCAOB board positions, including the Chairperson. Each of the PCAOB's board seats has a five-year term, and any nominee selected by the SEC will serve for the remainder of the term associated with that board seat. As noted in the announcement, PCAOB members are required to be "individuals of integrity and reputation who have a demonstrated commitment to the interests of investors and the public, and an understanding of the responsibilities for, and nature of, the financial disclosures required of issuers under the securities laws and the obligations of accountants with respect to the preparation and issuance of audit reports with respect to such disclosures."
4Proxy Advisory Firms Launch Annual Policy Surveys
On July 24, 2025, Institutional Shareholder Services ("ISS") announced the launch of its Annual Benchmark Policy Survey. The survey is open to institutional investors, public companies, corporate directors, and all other interested market constituents through August 22, 2025. In its summary of the survey, ISS notes a focus on corporate governance, executive compensation, risk management and diversity issues. For governance, one should expect questions on shareholder rights in relation to multi-class capital structures, considerations with regard to shareholder proposals, and director over-boarding. For executive compensation, the U.S. companies survey solicits views on both non-executive director pay and on executive compensation, including equity time-based vs. performance-based long-term executive incentives, say-on-pay responsiveness and modification or removal of ESG metrics for in-flight awards. In terms of risk management, the survey addresses oversight of artificial intelligence, biodiversity, cybersecurity and human rights issues. Finally, the survey invites views on board diversity and on shareholder proposals on diversity, equity and inclusion topics in the U.S. Glass Lewis recently opened its own 2025 policy survey, which is intended to inform the firm's policy development and understanding of the governance landscape and investor expectations. The Glass Lewis survey is open to investors, public company representatives and other stakeholders such as asset managers, asset owners and retail investors through September 15, 2025.
5ISS and Glass Lewis Sue to Overturn Texas Proxy Advisor Law
On July 24, 2025, proxy advisory firms ISS and Glass Lewis filed complaints in the U.S. District Court for the Western District of Texas seeking an order declaring a newly-passed law regulating proxy advisors (S.B. 2337) unlawful and seeking preliminary and permanent injunctions against enforcement of the law. The Texas law mandates disclosures when proxy advisory firms recommend casting a vote for "non-financial reasons" or provide conflicting advice to clients that differs from the advice given to other clients. Further, proxy advisors, when providing clients that have not expressly requested services for a nonfinancial purpose with either advice or a recommendation on how to vote on a proposal that is materially different from that provided to other clients, are required to (i) provide additional disclosure, (ii) notify each client, the relevant company and the Texas attorney general, and (iii) disclose which of the conflicting advice or recommendations is provided solely in the financial interest of shareholders and supported by specific financial analysis.
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