In Proxy Statements, More Disclosure is Not Always Better Disclosure, Says S&C Partner Melissa Sawyer

March 15, 2019

The Delaware Supreme Court decision Corwin v. KKR Financial Holdings and subsequent cases have changed how people draft proxy statements. In an effort to avoid partial and elliptical disclosures, some proxy statements are including more information than they need. 

S&C M&A partner and Corporate Governance & Activism co-head Melissa Sawyer discussed that approach to drafting proxy statements, among with other Delaware Chancery Court developments, during a panel at Tulane University Law School's 31st Corporate Law Institute, held on March 15, and the discussion was covered in The Deal

“Resist the urge to draft a really long proxy statement,” said Melissa, explaining that providing shareholders too much immaterial information can be distracting, and does not help them to understand a deal's key takeaways. Furthermore, Melissa noted, the buyer bears the cost of poorly drafted proxy statements as they could give plaintiffs lawyers a chance to file a suit that survives a motion to dismiss. 

For a deeper dive into the current state of corporate governance and shareholder activism trends in 2018, read our recommendations and observations in Preparing for the 2019 Proxy Season: Practical Guidance for Directors and Board Committees.