Comply or explain requirements have been a feature of the UK regulatory regime for quite a while. It's much less widely used in the US, although a few provisions of SOX and Dodd-Frank adopt versions of it.
Comply or explain gives companies flexibility in responding to corporate governance mandates, while ensuring transparency for investors.
One issue with expanding comply or explain in the US is developing clear guidance on what constitutes an adequate explanation. Jim Hamilton reports on developments in the UK regarding that issue.
A more serious issue, however, is the far more rapacious plaintiffs bar/litigation environment in the USA. Companies may choose to comply rather than risk being sued over claims that their explanation is fraudulent or otherwise inadequate, which eviscerates the key advantage of the comply or explain approach to regulation; namely, flexibility.
If we're going to get serious about comly or explain in the US, we're going to need safe harbors to protect the explanation from being subjected to constant frivolous lawsuits of the sort we're seeing with respect to say on pay disclosures.