Davis Polk partner Ning Chiu discussed with Corporate Directors Forum recent proposals by the SEC requiring public companies to disclose more information on sustainability, climate-related risks and human capital and how board directors can help their companies navigate regulatory changes.

Ning notes, “Going forward, there will be significant challenges to continue to meet the evolving demands imposed by external stakeholders and regulatory requirements. The challenges will vary by company, but at minimum it will mean companies and boards need to be on top of emerging expectations and proposed rulemaking, rather than wait until that becomes a mandate.”

She also encouraged boards to find the right tone in promoting transparency, accountability, and stakeholder engagement with respect to their company’s ESG disclosures and sustainability reporting. “It’s a bit of a cliche at this point, but tone at the top matters,” she said. “If boards believe that ESG disclosure objectives are important, then they should encourage and support management in these efforts. This includes not only showing clear indications of interest, staying informed, and asking questions, but also an element that isn’t talked about as much but just as crucial, which is to recognize and appreciate the complexity involved.”

Tone at the Top Matters: Corporate Governance Attorney Ning Chiu on Board Directors’ Crucial Role in SEC Reporting,” Corporate Directors Forum (May 30, 2023)