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Directorship Magazine / What Directors Should Know About Advance Notice Bylaws

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What Directors Should Know About Advance Notice Bylaws

By Alexandra R. Lajoux

06/08/2026

Compliance Regulation Member-Only
Key Points
  • Courts generally uphold advance notice bylaws adopted when no proxy contest is pending, though they remain subject to scrutiny regarding their reasonableness.
  • Boards are increasingly adopting or expanding these bylaws to prevent being blindsided by dissident director nominations enabled by the SEC’s universal proxy rule.
  • To avoid claims of entrenchment, advance notice bylaws should be drafted in plain language with the guidance of expert counsel well in advance of any potential shareholder conflict.

This AI-generated summary, based on content on this page, was reviewed by NACD editors for accuracy.

These four recommendations can help boards maintain transparency while navigating shareholder activism through the use of advance notice bylaws.

Can shareholders successfully sue directors simply because the board adopted advance notice bylaw provisions? No, said the Delaware Supreme Court in an April 29 decision. The ruling affirmed the validity of advance notice bylaws adopted on a “clear day,” or when there is no pending proxy fight, and rejected a stockholder challenge on the grounds that the scenario prompting it was “hypothetical.”

What follows is a brief overview of advance notice bylaws and recent shareholder litigation, followed by four recommendations for boards ...

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Alexandra R. LajouxAlexandra R. Lajoux serves NACD as chief knowledge officer emeritus.

This article was informative.

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