? 'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ? ? Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ? ? (i) 2025 report of the Institute of Internal Auditors (IIA) on internal audit trends (including the reporting lines and responsibilities of the CAE): As reported in last Wednesday's Fortune?CFO Daily Newsletter?(under, "Big Deal"), the IIA released last week its "2025 North American Pulse of Internal Audit"?report, which "explores the most notable trends within the profession...and ?offers original insights and statistics sourced from chief audit executives (CAEs) across the U.S." Below are excerpts from the first section of the report, "Management":

? ? ? ? ? ? ? ? ? ?"CAE responsibilities: CAEs are often responsible?for one or more areas outside of internal audit (89%), but there are wide differences between organization types (see next page for more details). For respondents as a whole,?fraud investigation was the most common area of responsibility (47%).... Another good example of differences is Sarbanes-Oxley (SOX) program responsibility, which was 79% for those at publicly traded organizations, compared to the overall average of 36%.....

? ? ? ? ? ? ? ? ? ?"Reporting Relationships: More than 80%?of respondents have a functional reporting relationship (direct reporting relationship) with their board, generally through the board’s audit committee.......In North America, administrative reporting varies extensively by organization type.?CAEs at publicly traded organizations tend to report administratively to the CFO.....

? ? ? ? ? ? ? ? ? ?"Job Titles for Highest-Ranking Internal Auditors: The highest-ranking internal auditor?at an organization may have a range of different job titles. Usage is evenly split between CAE,?vice president, and?director. The title of?vice president?is most common at publicly traded....organizations. Financial services organizations are most likely to use the title of?CAE......

? ? ? ? ? ? ? ? ? ?"Audit Committee Meetings: The vast majority of CAEs say?they attended all audit committee meetings in the past year (87%). A few said they missed one or two meetings (8%), or more (5%). The most common number of audit committee meetings per year was four (41%). However, half of audit committees meet more than four times per year. A few committees meet every month or more....."

? ? ? ? ? ? ? (ii) Cisco CISO on the dangers of board members being hacked: Jason Lish is the global chief information security officer at Cisco, and he recently spoke (with others) at a virtual meeting hosted by Fortune on the dangers currently facing board members from hackers, as reported in this Fortune article on March 7, "Hackers are taking aim at board directors, warns Cisco security exec":

? ? ? ? ? ? ? ? ? ? ?"Well-known CEOs and executives aren’t the only potential victims of hacks and threats from criminals. Board directors also have to be vigilant, according to Jason Lish, the global chief information security officer at Cisco.?“Often times they’re targets, especially for public companies, where their profiles are out there,” he said during a virtual conversation on Thursday hosted by Fortune?in partnership with Diligent for The Modern Board series.?

? ? ? ? ? ? ? ? ? ?"Lish added that he’s even seen an increase in the mailing of physical ransom letters to board directors and company executives. “How do they stay protected in their personal lives?” he said. “Because threat actors will try to do reconnaissance.”.......

? ? ? ? ? ? ? ? ? ? ?"Lisa O’Connor, a managing director at Accenture?who specializes in cybersecurity, echoed Lish and said threats against boards and executives are growing. “Those directors are a target for attacks specifically because of their role, along with the C-level and others,” she said during the panel. “We’ve seen a big uptick in that.” She urged boards to be aware of cybersecurity risks not only to their organizations but also themselves.?“There’s actually the personal awareness that needs to continue when we think about deepfakes or other things,” she added.

? ? ? ? ? ? ? ? ? ? ? "Board directors also need to make sure they’re being careful about where they’re receiving company information, according to Grant Schneider, president and CEO of FGS,?an intelligence and cybersecurity firm.?“Having a data sharing mechanism with board members that is not just sending them stuff to their Yahoo?account, or whatever it is, I think is really important, because they receive lots of sensitive information about the organization,” he said during the panel......"

? ? ? ? ? ? ? (iii) responding to prominent activist hedge fund Starboard Value launching a proxy contest to nominate a minority board slate/press release of the day: In June/24, prominent activist hedge fund Starboard Value disclosed that it had accumulated?a $500 million stake in Nasdaq-listed,?engineering and construction software?company?Autodesk, Inc., and had sent this open letter?to Autodesk shareholders announcing that it was taking legal action to postpone the company’s 2024 AGM so that it could nominate directors to the board (see item (iv) from June 18/24.) The legal action was unsuccessful, and yesterday Starboard Value announced in this press release?that it intended to nominate a minority slate at the company's upcoming 2025 AGM, and had delivered this letter?to Autodesk shareholders?citing, inter alia, “financial and operational underperformance,” and a “severe lack of management credibility”?.?Autodesk responded in this press release?yesterday, as follows:

? ? ? ? ? ? ? ? ? "Autodesk, Inc. today issued the following statement addressing Starboard Value LP's intent to nominate directors for election to the Autodesk Board of Directors:

? ? ? ? ? ? ? ? ? ? "Autodesk's Board and management team have reviewed Starboard's latest letter. We are always committed to acting in the best interests of our company and shareholders – as demonstrated by our strong recent financial results, the deliberate strategic initiatives we have implemented to generate significant long-term value and our ongoing board refreshment. Our strong business performance has driven total shareholder returns that have outperformed our peers......

? ? ? ? ? ? ? ? ? ? "Engagement with Starboard: In the spirit of constructive engagement?over the past year, Autodesk proactively met with Starboard representatives repeatedly and invited them to present their ideas to the full Board.?When we added our newest directors, we reached out in advance to offer Starboard the opportunity to participate in the process, which they dismissed.....

? ? ? ? ? ? ? ? ? ? "If Starboard proceeds with their nomination, the Board's Corporate Governance Committee will review Starboard's candidates as part of our regular director evaluation process. Autodesk shareholders are not required to take any action at this time."

? ? ? ? ? ? ? ?(iv) ?ISS 2025 proxy season preview: the increase in shareholder proposals against ESG and DEI initiatives continues/latest data on DEI metrics in executive compensation :?

? ? ? ? ? ? ? ? ? ?(a) Last Tuesday,?ISS released its "2025 U.S. Proxy Season Preview." Below are three of the "Key Takeaways":

? ? ? ? ? ? ? ? ? ? ? ?"— Pushback against ESG and DEI initiatives is intensifying,?and the surge of shareholder proposals criticizing?certain environmental or social initiatives continues, representing 14.7% of all proposals submitted thus far for 2025. ??

? ? ? ? ? ? ? ? ? ? ? ? ?— Though these counter-ESG proposals rarely receive broad shareholder support, some companies are likely to concede or make compromise to reach an agreement before the matter comes to a vote. Trend to watch: withdrawals. ? ?

? ? ? ? ? ? ? ? ? ? ? ? ?— Disclosure of diversity information and use of diversity metrics in executive pay is expected to diminish, and board diversity considerations are likely to play a much smaller role this proxy season....."

? ? ? ? ? ? ? ? ? ?(b) Below is from last Thursday's WSJ 'CEO Brief' Newsletter, "ESG’s Role in Executive Comp":

? ? ? ? ? ? ? ? ? ? ? ? "If you want targets to be taken seriously, build them into the executive compensation plan.?That bit of management wisdom took hold in the ESG world over the past five years, with diversity and sustainability goals becoming de rigueur in the compensation plans of many large public companies.

? ? ? ? ? ? ? ? ? ? ? ? "But since the election of?Donald Trump, the trend has gone into reverse. I asked?Umesh Chandra Tiwari, co-founder and executive director of corporate governance research firm ESGAUGE,?to run the numbers for me on corporate filings so far this year. The results, while perhaps not surprising, are stark.?Of the 27 S&P 500 companies that have disclosed so far this year, 41% had DEI metrics in their compensation plans, down from 59% last year. And only 15% cited carbon footprint or emissions reductions,?down from 19% last year. The most notable company to abandon ESG targets in compensation? Apple......

? ? ? ? ? ? ? ? ? ? ? ? ?"(P)erhaps more surprising than the companies that dropped targets?are those that held firm, including Hewlett Packard Enterprise, Johnson Controls and Starbucks. Many of the companies abandoning targets in their public disclosures say they aren’t changing the way they manage their businesses. But if putting targets in the compensation plan made them more likely to be honored, surely taking them out will have the opposite effect."

? ? ? ? ? ? ? (v) latest data on women in the boardroom: Two recent reports with the latest data on women in the boardroom:

? ? ? ? ? ? ? ? ? (a) From this March 5 Conference Board "Quick Take"?report, "Women in the Boardroom: Recent Progress and the Road Ahead":

? ? ? ? ? ? ? ? ? ? ? ? "The number of women on the boards of US public companies has reached an all-time high. As of 2024, women now hold 29% of Russell 3000 and 34% of S&P 500 board seats—an increase that reflects steady progress but remains below parity. The increase has been driven by regulatory actions, investor expectations, and evolving corporate governance standards.....

? ? ? ? ? ? ? ? ? ? ? ?"However, the share of newly appointed women directors may be plateauing or even declining. In the Russell 3000, for instance, new female board appointments dropped from 41% in 2020 to 36% in 2024. While this could suggest that progress is slowing because boards are becoming more gender diverse and closer to parity, it could also signal a broader slowdown in diversity efforts as investor and regulatory pressures ease amid rising legal and political scrutiny of corporate DEI practices."

? ? ? ? ? ? ? ? ? ?(b) From this March 7 Equilar report:

? ? ? ? ? ? ? ? ? ? ? ? ?"As the world celebrates International Women’s Day on March 8, the state of diversity remains in limbo. Diversity, equity and inclusion (DEI) has faced significant challenges in recent months, with the rise of anti-DEI movements taking center stage. The potential impacts of these movements are particularly evident in gender diversity on corporate boards, which experienced setbacks during the fourth quarter of 2024, stalling progress towards gender parity. The Equilar Gender Diversity Index (GDI) for Q4 2024 remained stagnant at 0.60 for the third consecutive quarter, where 1.0 represents gender parity between men and women across the Russell 3000.....

? ? ? ? ? ? ? ? ? ? ? ? "The overall percentage of women on boards has shown a consistent upward trend over the eight years since the GDI’s inception, climbing from 15.1% to 30.1%. While this sustained growth seems optimistic,?the prevalence of female directors has plateaued at 30.1% since the second quarter of 2024. Furthermore, the rate of growth has also decelerated in the last three years.?Between 2021 and 2022, there was a 16.9% increase in female board representation. However, this momentum slowed to an 8.1% increase between 2022 and 2023, and further declined to 4.5% between 2023 and 2024.....

? ? ? ? ? ? ? ? ? ? ?"Despite these challenges, there are some positive trends to note.?The percentage of women holding multiple board seats continues to exceed that of their male counterparts, standing at 24.8% and 16.6%, respectively, during Q4 2024. This trend has remained consistent since the fourth quarter of 2016. Furthermore, 63 boards had no female board members in the fourth quarter of 2024, down from 69 boards in the previous quarter....."

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