Corporate governance and securities compliance continue to evolve rapidly as the Securities and Exchange Commission (SEC), stock exchanges, and global regulators update their requirements for transparency, accountability, and investor protection.
In 2025, companies face new challenges as technology, globalization, and market speed transform how compliance is executed. For directors, officers, and counsel, understanding how federal, state, and exchange-level rules interact is critical to protecting both the organization and its leadership.
The Modern Regulatory Landscape
The SEC’s regulatory agenda has expanded significantly in recent years, with rulemaking affecting nearly every aspect of securities disclosure, reporting, and governance.
Among the most impactful developments is the adoption of a T+1 settlement cycle and implementation of the EDGAR Next platform. The shorter settlement timeline compresses transaction windows for both lawyers and bankers, while the new EDGAR login requirements enhance cybersecurity but increase administrative burdens. These updates reflect a broader push toward faster, more secure, and more digitized compliance processes. Companies that fail to adapt, risk missing filing deadlines and facing enforcement actions.
The SEC’s broader “Regulatory Flex Agenda” also includes updates to Rule 144 resale restrictions, emerging growth company (EGC) eligibility, and modernization of shelf registration rules. These regulatory shifts underscore the need for compliance teams to build agility and real-time monitoring into their governance systems.
Interplay Between Federal and State Law
Corporate governance in the United States operates within a dual system: federal securities regulation and state corporate law.
Federal statutes such as the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes-Oxley Act (SOX) create uniform reporting requirements, while state law defines the fiduciary obligations of corporate directors and officers. Most public companies remain organized under Delaware law due to its predictable judicial system and well-developed case law. However, the emerging ‘DEXIT’ trend with companies reincorporating in states such as Texas, Nevada, or Wyoming, signals that some boards view Delaware’s evolving fiduciary standards as overly strict. In the end, compliance professionals must understand both the federal and state domains to manage risk effectively.
As Stephen Hinton of Bradley points out, corporate director fiduciary duties apply under state law where the company is incorporated. These fiduciary duties fall into two principal categories: the duty of care and the duty of loyalty.
The duty of care requires informed, deliberate decision-making, while the duty of loyalty demands that directors act in the best interests of the corporation rather than for personal benefit. Important to note is that these duties continue even as a company approaches insolvency, when directors must also consider the interests of creditors.
Board Independence and Exchange Oversight
Independence remains a cornerstone of securities law compliance and corporate governance. Rakesh Gopalan of Troutman Pepper Locke notes that the core governance and independence requirements come from the stock exchanges, rather than the SEC itself. The New York Stock Exchange (NYSE) and NASDAQ impose distinct, but similar, independence requirements. These include limits on employment relationships, compensation arrangements, and familial ties that might compromise objective oversight. Audit and compensation committees face the strictest independence standards, as their work directly affects financial reporting and executive pay.
Boards must therefore review not only federal law but also exchange guidance when evaluating director independence. Proper documentation of these evaluations, through director questionnaires, committee charters, and proxy disclosures, provides both transparency and a legal safeguard. Maintaining independence records also supports defense under the business judgment rule, which protects directors from liability when decisions are made in good faith and with due care.
Governance Beyond ‘Check-the-Box’ Compliance
Policies and procedures alone cannot guarantee ethical governance. Effective compliance requires cultural commitment from the top of the organization downward. Daniel Cotter of Aronberg Goldgehn underscores the importance of leadership in setting a proper example and establishing organizational integrity. Ultimately, governance effectiveness depends on directors who actively engage in oversight and strategic questioning rather than passive approval of management proposals.
Building a true governance culture requires regular board education, transparent communication between management and directors, and meaningful performance evaluations. Boards should revisit their charters annually to confirm that committee roles, reporting structures, and risk management responsibilities remain current.
Globalization and Emerging Compliance Risks
As companies operate across multiple jurisdictions, compliance obligations increasingly extend beyond US borders. Directors must now consider international privacy laws, cross-border investment restrictions, and cybersecurity reporting requirements.
For example, the European Union’s General Data Protection Regulation (GDPR), California’s Consumer Privacy Act (CCPA), and China’s Personal Information Protection Law (PIPL) all impose obligations that affect how companies collect, store, and share investor and financial information. At the same time, beneficial ownership rules under the Corporate Transparency Act (CTA) require disclosure of certain ownership structures, creating new reporting layers. Effective compliance now demands collaboration among legal, finance, IT, and data governance functions.
Practical Compliance Recommendations
Modern governance requires that companies integrate legal, financial, technological, and cultural disciplines into a unified compliance strategy. Whether responding to the SEC’s rule changes, adapting to exchange independence standards, or navigating global data laws, boards that anticipate change rather than react to it will be best positioned to maintain trust and resilience.
Compliance officers and directors can strengthen governance practices by institutionalizing several key principles:
- Conduct annual independence evaluations and verify conflict disclosures.
- Maintain comprehensive documentation of internal controls, audit findings, and remediation steps.
- Implement structured continuing education programs for directors and senior executives.
- Regularly review and update governance policies to reflect SEC and exchange rule changes.
- Incorporate cross-border compliance oversight into risk-committee agendas.
- Ensure robust recordkeeping of board minutes, demonstrating informed decision-making and fiduciary care.
To learn more about this topic view Securities Law Compliance. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested to read other articles about compliance.
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