Shareholder Proposals and the Right of Investors to Express Collective Voice on Materiality

The U.S. securities markets are built on the principle that materiality is defined by investors. Courts and the SEC recognize that information is “material” if a reasonable investor would view it as important in deciding how to vote or invest.

The shareholder proposal process under Rule 14a-8 is a crucial tool for investors to express this judgment collectively. Proposals allow investors to identify and elevate issues they deem material and to signal through voting outcomes the significance of those issues to the company’s investor base. Protecting this right ensures that shareholders retain the ability to guide corporate board and management on the risks and opportunities that matter to their investors.

Key Takeaways

• Collective voice defines materiality. Through voting outcomes on shareholder proposals investors indicate what issues are material to them.

• Shareholder proposals operationalize this right. They are a structured, market-based tool for investors to communicate material concerns directly to boards and management.

• Disclosure law reinforces this principle. Materiality under securities law is typically determined under a “reasonable investor” standard – i.e., what investors consider significant in consideration of the total mix of information.

• Restricting this voice undermines exercise of fiduciary duty and market accountability.

Shareholder Proposals: Expressing Collective Voice

• Structured Process: Proposals let investors raise concerns in a 500-word request included in proxy materials.

• Voting as a Signal: Support levels communicate clearly to companies what investors deem significant.

• Proven Accountability: Proposals have driven reforms on governance (independent chairs, majority voting), risk management (opioid oversight, predatory lending), and systemic challenges (climate resilience, online child safety).

• Dialogue & Resolution: Many proposals are resolved through engagement, improving governance and disclosure before a vote is even needed.

Why This Right Matters

• Fiduciary Duty and Materiality: Long-term, heavily diversified investors cannot diversify away systemic risks—such as climate disruption, public health crises, or financial instability. Shareholder proposals are the primary tool for these investors to express collectively which risks they consider material to preserving long-term portfolio value, making this right a cornerstone of fiduciary duty.

• Material to Business, Not a Distraction: Far from being a distraction, shareholder proposals surface core issues that boards may otherwise overlook or downplay. By elevating concerns about governance, risk management, or systemic challenges, proposals make companies more resilient, responsive, and ultimately more profitable over time.

• Forward-Looking Materiality: Shareholder proposals often highlight issues that may be uncertain today but are probabilistically material tomorrow. By surfacing such risks early, they ensure companies and investors can act before crises crystallize, consistent with the “reasonable investor” standard in securities law.

• Consistent with judicial definition of materiality. The Supreme Court has held that a fact is “material” under securities laws if there is “a substantial likelihood that a reasonable shareholder would consider it important” or if its disclosure would have “significantly altered the ‘total mix’ of information made available.” This definition originates in TSC Industries v. Northway, 426 U.S. 438 (1976), and was expressly adopted in Basic Inc. v. Levinson, 485 U.S. 224 (1988), which added that for contingent or speculative information, materiality depends on both the probability of the event and its potential magnitude.

The right to file and vote on shareholder proposals is the collective voice of investors on materiality. It is the practical expression of the “reasonable investor” standard in securities law. Weakening this right would strip investors of a cornerstone of corporate accountability and market stability. Protecting it ensures that materiality remains defined by those who bear the risk and reward of investment: the investors themselves.

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Authored by the Shareholder Rights Group.

US Sustainable Investing Trends 2024-2025

The US SIF Trends Report 2024/2025 provides a comprehensive understanding of the trends driving $52.5 trillion in US assets under management (AUM), including $6.5 trillion explicitly marketed as ESG or sustainability-focused investments.

Key Findings and Takeaways

The Market is Poised for Growth

73% of survey respondents expect the sustainable investment market to grow significantly in the next 1-2 years, driven by client demand, regulatory evolution, and advances in data analytics. This is still the case, despite political headwinds and regulatory scrutiny.

Stewardship Takes Center Stage

79% of US market assets ($41.5 trillion) are now covered by stewardship policies, though further research is needed to assess their active implementation and impact.

Focus on Climate and Clean Energy

Climate change remains the dominant theme, with a strong emphasis on clean energy transitions, carbon reduction, and nature restoration.

Strategic Shifts in Investment Approaches

ESG integration (81%) and exclusionary screening (75%) are the most commonly used strategies. Survey responses indicate that 62% use 5 or more negative screens.

Challenges and Opportunities Ahead

Political challenges, such as anti-ESG rhetoric and greenwashing concerns, continue to shape the narrative. Our survey shows that although these present challenges, they also highlight the need for improved communication and education about the value of sustainable investing.

Access the detailed report on US SIF’s website.

Proxy Review 2025

2025 Proxy Season Executive Summary

This year, shareholders filed 355 environmental, social, and sustainable governance (ESG) proposals as of February 21, 2025. Additional proposals will be filed as the year progresses, but the shape of the 2025 spring annual meeting season is now clear.

The 2025 proxy season has seen a sharp drop in proposals filed from 2024, primarily due to the change in the presidential administration and what many expected to be a dramatic policy shift at the Securities and Exchange Commission (SEC).

Proponents have largely taken a “wait-and-see” approach, electing not to file resolutions until they were able to assess the direction of the new SEC. This approach was validated as it quickly became clear that some proposals that had been allowed by the SEC for decades, began to be omitted. And in a move that clearly undermined proponents—after the majority of the 2025 resolutions were filed, the SEC formally changed the rules of what could be excluded and extended the timeframe for companies to submit or amend their no-action filings without allowing shareholders the same opportunity

to amend their resolutions.

Another factor in the drop in filings is that more companies engaged in dialogue with shareholders in order to avoid both the need for proposals and the related publicity that could draw attention to them given the current political attacks on DEI and climate.

Next year, shareholders will, of course, revise their proposals to meet the new rules and it is anticipated that the number of filings will go up. Yet the larger political and legal attacks on sustainable investing, institutional investors, and proxy analysts does raises concerns that the SEC will take further actions to curtail shareholder rights and hinder shareholder proposals.

The total number of 2025 ESG resolutions are down 34% from 2024 when 536 such proposals were filed by this point. Average support for pro-ESG proposals in 2024 was 19.6%, down from 21.5% in 2023 and well below the 33.3% average vote of 2021. In 2024 there were fewer majority votes than we had seen in previous years. Again, much of the decline in votes is attributable to the large asset managers no longer supporting ESG proposals and the attacks on taking material ESG risks into account.

Thus far, 78 proposals in the 2025 proxy season – 22% of the total filed – were withdrawn. At a similar time in 2024, only 7.7% of proposals had been withdrawn. March and April often see a flurry of withdrawals before proxy statements are sent out, so it will be interesting to see if more companies elect to privately come to an agreement with or engage their shareholders in this incendiary political climate to avoid the public spotlight and how many resolutions are withdrawn to avoid being omitted under the new rules. On March 7, 2025, the SEC reported 221 proposals had received no-action requests. In 2024 there were 7 omissions and 94 no-action requests pending at a similar date.

For a more detailed report on the 2025 Proxy Season, access the resource here.

Letter from Democratic Financial Officers to Asset Managers Regarding Environmental and Social Issues

A coalition of 17 Democrat finance officials have sent a letter to executives at BlackRock and 17 other firms, pushing the institutions to reaffirm their commitment to managing long-term risks like climate change. Executives at Vanguard, State Street and JPMorgan Chase also received the Americans for Responsible Growth letter. The full list of recipients include Amundi, BNY, Capital Group, Fidelity Investments, Franklin Templeton, Geode Capital Management, Goldman Sachs, Invesco, Legal & General, Morgan Stanley, Northern Trust, Nuveen, T. Rowe Price and Wellington Management. 

An excerpt from the letter to BlackRock is included below.

Dear Mr. Fink,

We write to offer a fundamentally different vision of fiduciary responsibility than the one advanced in the July 2025 letter to you from signatories of the State Financial Officers Foundation (SFOF).

We believe the views expressed in their letter misrepresent the true meaning of fiduciary duty and would require asset managers to take a passive approach to oversight while ignoring the nature of long-term value creation in modern capital markets. In contrast, we believe that fiduciary duty calls for active oversight, responsible governance, and the full exercise of ownership rights on behalf of the workers and retirees we serve.

Fiduciary duty, as properly understood, requires—not prohibits—investor consideration of material risks and long-horizon opportunities. Institutional investors, including public pension funds, are long-term owners. They bear the consequences of unmanaged risks—whether climate-related, governance-related, or supply chain-related—and must ensure that corporations and their boards address such risks with transparency and accountability.

Asset owners and their asset managers must retain and effectively use their authority to vote proxies, and engage companies to deliver durable, risk-adjusted financial returns over the long-term.

It is particularly unreasonable to suggest that asset owners whose portfolios span the entire economy should be barred from engaging the largest firms in the market. Today, the top 100 companies represent more than 70% of U.S. market capitalization. For many institutional investors, these holdings are structurally inescapable. Denying the right to engage with these companies is tantamount to severing ownership from stewardship.

We commend asset managers who are expanding opportunities for clients to vote proxies. We urge you to focus on empowering institutional investors and uphold an approach to fiduciary duty grounded in transparency, accountability, and long-term value creation. It is essential that you lead in developing tools and mechanisms that connect capital to oversight.

We invite you to respond by September 1, 2025, and to meet with our offices to reaffirm your current commitment to responsible stewardship and build a constructive dialogue around this issue.

The Democrat finance officials represent Connecticut, Delaware, Maine, Massachusetts, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington. They are looking for firms to reach out to meet with their offices and reaffirm their “current commitment to responsible stewardship” by Sept. 1.

Link to the BlackRock Letter.

Why Minority Support for Precatory Shareholder Proposals Promotes Transparency and Accountability

Sanford Lewis, Director of the Shareholder Rights Group.

While shareholder proposals on governance are perennial favorites that win majority support from shareholders, advisory proposals that continue to receive significant support from a bloc of investors highlight areas in which enhanced corporate disclosure could be material to a significant portion of a firm’s investors. Shareholder proposals that allow investors to aggregate collective support for improved disclosure by companies are an important part of the functioning of heterogeneous capital markets.

A July 3 post on the Blue Sky Blog asserted that the low voting outcomes for anti-ESG proposals reflect a general sentiment of shareholders in opposition to precatory proposals on ESG. But the voting outcomes this year do not bear out this conclusion. The article mistakenly concluded that this year’s 2 percent average voting for the anti-ESG proposals is not far from the supporting votes on ESG proposals overall this season.

A credible source of analysis, Morningstar, reports that the overall support for pro-ESG proposals averaged 20 percent this year. There is a large difference between 2 percent and 20 percent support. In fact, 20 percent support is recognized by many as the level that often compels boards and management to take note and consider responsive action.

Take proposals related to diversity, equity, and inclusion (DEI). There was a huge gap in voting outcomes this year between proposals that  focused on eliminating corporate diversity programs, which averaged support of 2 percent or less, and voting outcomes on proposals that sought better disclosure on diversity. Many investors continue to view board and employee diversity as a material issue relevant to a company’s capacity to function in a diverse society. Most tellingly, Georgeson reports that this year, proposals asking companies to disclose EEO data that the companies previously filed with the government received an average of 33 percent support. Instead of blanket opposition to precatory proposals, this outcome exemplifies the discernment of investors in supporting proposals that promise materially useful disclosure at low cost. Making those EEO reports public improves information to the market at essentially zero cost to the companies – this is a bargain for investors. In contrast, even a more expensive approach to assessing corporate diversity programs, asking companies to conduct racial equity audits, received 18 percent support, on average.

The suppressed top voting outcomes this year for environmental and social proposals reflect an ongoing political and legal campaign that pressures the largest asset managers, suppressing their significant volume of votes for many environmental and social proposals. Nevertheless, voting shareholders still demonstrate discernment and support for many shareholder proposals that sought improved corporate environmental and social disclosure.

Voting evidence from this season shows that shareholder proposals allow blocs of investors to express their collective voice regarding opportunities for improving corporate disclosure that would aid their investment strategies and decisions. A majority vote is not required for shareholder proposals to persuade the board and management regarding market demand for better disclosure on an issue viewed by their investors as significant to their company.

The shareholder proposal rule is structured to ultimately screen out repetitive proposals that are truly viewed as low quality by voting investors. In a 2020 rulemaking, the SEC  concluded that if a proposal receives less than 5 percent support the first time it is submitted, a proposal on substantially the same subject should not be allowed to be resubmitted for three years. The commission viewed this increase over the prior 3 percent threshold as better calibrated to ensure that the proposal that is resubmitted could have a realistic prospect of eventually obtaining broader support.  Notably, the number of pro-ESG proposals that are receiving support below that commission-determined threshold has essentially held steady, not risen. Instead, this year, a surge in anti-ESG proposals filed by new proponents drove up the total number of proposals receiving less than 5 percent support. They have a right to file those proposals, and shareholders have a right to reject them. That’s the marketplace of ideas working, not failing.

The shareholder proposal process allows shareholders, rather than the SEC, to make the first call as to whether a proposal is strong enough to merit ongoing consideration and whether the issue reflects a material concern for a significant portion of investors. While governance proposals may win the most votes in the current climate, other precatory proposals allow investors of nuanced strategies to exercise their voting rights and encourage better disclosure of emerging material interests to the market.  Precatory proposals continue to provide a dynamic opportunity for engagement and deliberation between and among investors and their companies.

Sustainable Investment Markets: Evolution and Impact

How Investors Can Advance Sustainable Urban Development Through Innovative Financing Models and Climate Narratives in a Polarized Environment

Authors: Austin Ariss, Mariama Bah, Renata Gladkikh, Nanda Jasuma, Smita Samanta

Executive Summary

• Policy volatility has become structural, not episodic, as evidenced by the 2025 $7B offshore wind rollback creating an operating environment without a reliable policy floor for sustainable investment.

• Despite 58% of investment professionals prioritizing SDG 11, implementation lags due to a fundamental mismatch: capital is ready but execution is constrained by fragmented regulation, stakeholder complexity, and inconsistent incentives.

• Our research reveals that successful urban sustainability investments pair mechanism with a message. Blended finance structures resolve technical barriers to scale, while economic reframing creates the political space required for implementation.

• Case analyses demonstrate the dual approach delivers results: the NYC MTA’s staged decarbonization was achieved through climate bonds and strategic communication; affordable housing preservation funds yielded 14–24% IRR by aligning community and investor interests.

• International experience confirms economic reframing decreases polarization: Australia’s natural capital approach positioned environmental protection as asset management; Japan’s energy security framing enabled nuclear revival despite post-Fukushima concerns

The difference between stalled climate finance and transformative sustainable investment lies in this integrated approach. For US SIF members navigating an uncertain policy landscape, this report offers a strategic toolkit focused on three actionable pathways: standardizing blended finance templates, aligning impact metrics, and repositioning climate initiatives as economic utility to create resilient investment pathways rather than waiting for ideal policy conditions.

Read more here.

Health and Safety in the Fast Food Industry

MIKAIL HUSAIN, ESG Analyst, SOC Investment Group

LOUIS MALIZIA, Corporate Governance Director, SOC Investment Group

In recent years, the food service industry has been rife with workplace health safety issues. Food service workers have been attacked, stabbed, shot, and killed by customers in the restaurants where they work. According to one study, between 2017 and 2020, at least 77,000 violent or threatening incidents took place at California fast-food restaurants. Recent data indicate that the cost of workplace violence could be as much as $56 billion annually – and that’s likely an undercount. However, workplace health and safety issues are not limited to customer violence. Workers have also been made to work under unsafe and unsanitary conditions, such as restaurants with high kitchen temperatures and restaurants infested with vermin.

These issues and the media response they elicit are clear operational and reputational risks for the companies, which can lead to difficulties with staff retention in an industry with high turnover. According to the U.S. Chamber of Commerce, the food service and hospitality industry has a consistently high “quit rate.” Understaffing at fast food restaurants can lead to longer wait times for customers, diminished employee productivity, and an increase in safety hazards. Workplace health and safety issues in fast food restaurants have led to worker strikes and protests of working conditions, as well as fines and temporary restaurant closures imposed by regulators.

Why should investors care? If left unaddressed, workplace health and safety issues can expose companies and their shareholders to unnecessary risk. In recent years, shareholders have recognized the risks posed by workplace health and safety issues and are pressing companies to take more action to address them. In 2023, Dollar General shareholders demonstrated this with a majority vote in support of a health and safety audit proposal.

To address these risks, SOC Investment Group has filed health and safety audit proposals at McDonald’s, Yum! Brands, Restaurant Brands International, and Chipotle for the 2025 proxy season. The proposals are similar to the proposal we filed last year at Chipotle, which received 30% support from shareholders, well above the average support level of 18% for social proposals in the S&P 500 in 2024. The resolution requests that the companies’ boards of directors commission an independent third-party audit on the impact of company policies and practices on the safety and well-being of workers throughout company-branded operations.

We believe any relaxation of safety standards in pursuit of short-term benefits creates risks for workers, customers, and shareholders and may result in long-term reputational damage that can be difficult to reverse. In addition to these risks, companies that neglect health and safety in the short term may face increased regulatory and business risks that can erode margins and reduce long-term shareholder returns.

Further Reading.

Human Rights & Artificial Intelligence

BRANDON REES, Deputy Director, Corporations and Capital Markets, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)

The widespread adoption of artificial intelligence (AI) by companies has the potential to unleash broad-based economic prosperity by enhancing employee productivity. But, it also carries risks to workers’ rights as AI algorithms increasingly set productivity quotas, make human resource decisions, and direct workers on how to perform their jobs. For example, the use of AI in human resources decisions can result in unlawful employment discrimination.

According to the UN Guiding Principles on Business and Human Rights, companies have an international obligation to “know and show” that they respect human rights. In using this due diligence framework to manage AI-related human rights risks, companies should: 1) be transparent about how AI is used by the company, 2) establish board-level oversight and monitoring of AI-related risks, and 3) give workers a voice in how AI is used in the workplace.

First, companies should be transparent with how they use AI in their business operations. Investors are regularly engaging with their portfolio companies about AI as part of their stewardship activities. Many companies are now voluntarily disclosing information on how they use AI to their investors, employees, and customers. By addressing the ethical considerations of AI in a transparent manner, companies can build trust with their stakeholders.

Second, boards of directors have an important role to play in monitoring and managing AI risks. Under the Caremark standard in Delaware corporate law, directors have a fiduciary duty to oversee their company’s operations by establishing an internal reporting system. At a minimum, companies adopting AI into their business operations need to establish board-level oversight of the risks involved and report on any regulatory noncompliance issues that arise.

And, finally, companies should view AI as an opportunity to enhance human decision-making by their employees, not as a substitute. Companies that view their workers as partners in implementing AI are more likely to attract and retain a motivated workforce and realize the productivity gains that AI promises. Unions are the best way for workers to negotiate how AI technology should be implemented in the workplace.

To address these concerns, the AFL-CIO Equity Index Funds have introduced shareholder proposals that ask companies to commission an independent, third-party human rights assessment of their use of AI. Proposals are expected to go to a vote at Amazon and Lyft in 2025, and similar proposals requesting a transparency report on the use of AI received high levels of shareholder support at Apple (37%) and Netflix (43%) in 2024.

Further reading.

Nature is Critical to Business

ANDREW SHALIT , Shareholder Advocate, Green Century Capital Management

Global biodiversity is deteriorating faster than at any time in human history, largely due to human activity. Such massive biodiversity loss poses serious economic and financial risk as more than half the world’s economy is moderately or highly dependent on nature. To reverse this trend, companies must start by meaningfully assessing, disclosing, and addressing their nature-related impacts, dependencies, risks, and opportunities.

Green Century has long worked to advance protections for nature through our work to preserve natural forests, reduce the use of harmful chemicals, and put companies on a path to net zero emissions. In the fall of 2023, we filed our first proposals that specifically address biodiversity, asking companies including PepsiCo and Kellanova to complete material biodiversity dependency and impact assessments. This year, we refiled our resolution at PepsiCo and co-filed, along with Proxy Impact, a biodiversity and nature disclosure resolution at Home Depot, led by Domini Impact Investments. These resolutions call on companies to face and address the challenges to nature that threaten the products they sell and the markets in which they operate.

We also filed a biodiversity resolution at Chemours, a chemical company that mines titanium to create products that whiten our paint, toothpaste, and sunscreen. While titanium is a plentiful mineral, Chemours conducts some of its mining operations in ecologically sensitive areas. Our proposal asks Chemours to adopt a policy to assess any reasonably likely irreversible impacts on biodiversity prior to commencing mining operations in ecologically sensitive areas, as well as any related financial, reputational, and operational implications for the company should those impacts occur. Bottom line, it probably doesn’t make financial sense to mine ecologically sensitive areas for a natural resource you can easily find elsewhere – and it’s at least worth assessing those risks and impacts first.

Global institutions have begun to recognize the need for action on nature. In 2022, 196 countries ratified the Global Biodiversity Framework, setting out ambitious goals to protect and restore nature. The Taskforce for Nature-Related Financial Disclosures (TNFD) was launched in September 2023. As of this writing, 546 organizations worldwide have committed to assessing and disclosing under TNFD, including 346 corporations and 139 financial institutions. The Global Reporting Initiative, CDP, and Science Based Targets Network are developing support for biodiversity and nature disclosure and target setting. Biodiversity disclosure is also included in the EU’s Corporate Social Responsibility Directive. Industry groups, including the Finance for Biodiversity Foundation and Business for Nature, provide additional support for companies seeking to transition to nature-positive practices.

We can no longer take nature for granted. Companies must find nature-positive approaches to all aspects of their business, from supply chains to manufacturing to distribution, to avoid near- and long-term risks associated with the degradation of the natural world. Investors have a crucial role to play by insisting that companies take concrete steps to address the systemic risk of global biodiversity loss.

For more details on biodiversity and nature related proposals from the 2025, access 2025 Proxy Preview.

2025 Update on SEC Guidance for Shareholder Proposals

SANFORD LEWIS, Director and General Counsel, Shareholder Rights Group

In order to help companies and investors determine whether a shareholder proposal qualifies to appear on the proxy statement under SEC Rule 14a-8, the SEC has developed a process to allow companies to inquire in advance whether a proposal must be included. The “no action” process is an informal review process through which the SEC staff advises companies and their investors on whether the SEC staff would recommend enforcement action if a company fails to include a submitted shareholder proposal on its annual proxy statement.

The SEC staff periodically recalibrates its interpretation of the rules as it applies in the no-action process to reflect current issues of concern to investors and companies. For example, in 2021, the SEC staff issued an interpretive bulletin, Staff Legal Bulletin 14L, which clarified the interpretation of ordinary business and micromanagement rules.

The bulletin was subject to pushback from issuers and asset managers. Trade associations, such as the National Association of Manufacturers and Business Roundtable, were critical of the bulletin, asserting that it no longer required that a proposal address an issue that is significant to the company receiving it. Asset managers who vote on shareholder proposals asserted that proposals were becoming too prescriptive.

In 2023 and 2024, following the market response and criticisms, the staff tightened up its interpretations of the micromanagement rule and excluded many proposals on social and environmental issues that had previously been allowed. From November 1, 2023, to May 1, 2024, the SEC staff supported company requests for exclusion of proposals roughly 68% of the time, similar to the average exclusion rate during the first Trump administration, from 2017 to 2020, which was 69%. In 2025, the staff has again tightened its interpretation of the micromanagement rule, excluding, for example, proposals on lobbying disclosure that had previously been permissible since at least 2011.

On February 12, 2025, the SEC staff issued Staff Legal Bulletin 14M to signify a more restrictive posture on proposals that request specific forms of disclosure or actions by companies. The bulletin revoked Staff Legal Bulletin 14L and altered staff interpretations of the micromanagement, ordinary business, and relevance exclusions.

The new bulletin requires that assessment of whether a shareholder proposal transcends ordinary business should be evaluated by looking at the significance of the proposal to the particular company that receives the proposal.

The new bulletin also shifts interpretation of micromanagement from Staff legal Bulletin 14L’s clear guidelines, toward a more subjective staff evaluation as to whether the proposal seeks a specific method, strategy, or outcome that the staff views as more appropriately determined by the board or management. Such new interpretations are anticipated to lead to an increase in the exclusion of environmental and social proposals and fewer such proposals appearing on proxy statements.

In a letter submitted on February 18, representatives of the Shareholder Rights Group, the Interfaith Center on Corporate Responsibility, and As You Sow requested that the SEC refrain from applying the guidance to shareholder proposals filed prior to the issuance of the bulletin: “Shareholders rely on Staff guidance regarding the shareholder proposal process when engaging the management of the companies they own. By filing proposals that adhere to the guidance, shareholders are able to present proposals more likely to conform to Staff understanding of the exclusions in Rule 14a-8. This streamlines the process for investors, companies, and the Staff. Applying new guidance to previously submitted proposals would unfairly penalize investors who followed the extant guidance in good faith, believing that they were following the procedures that would lead to clear results, limiting the need for the costly back and forth of the no-action process.”

Along with new regulatory guidance from the SEC, the investor right to file shareholder proposals has also come under attack from legislation in Congress and lawsuits filed in the federal courts in Texas. The new report, Shareholder Proposals: An Essential Investor Right, offers a detailed and thoughtful defense of shareholder proposals. It catalogues their role in creating a powerful public platform for challenging and improving corporate policies, practices, performance, and impacts and providing an important mechanism for surfacing investor perspectives on material issues. The report further demonstrates how shareholder proposals have enabled investors to safeguard their portfolios from risks and protect the American public by helping to catalyze positive corporate change on an array of issues.

Shifting Policy Terrain on Shareholder Engagement

NATALIA RENTA , Associate Director, Corporate Governance and Power, Americans for Financial Reform Education Fund

The current administration has hit the ground running with policy changes designed to stymie shareholder engagement and corporate accountability, with particularly visible and harmful attacks targeting corporate progress on racial equity. Our opponents laid the groundwork for these actions through bills passed by the House of Representatives last Congress and Project 2025.

One of the first executive orders Trump issued tasked the Attorney General with writing a report with recommendations on how to encourage the private sector to end diversity, equity, and inclusion (DEI) initiatives. It also tasked the Attorney General and other agency heads with coming up with a “strategic enforcement plan” to “deter DEI programs or principles.” While a judge temporarily blocked implementation of portions of this and another anti-DEI executive order, many large corporations quickly pulled away from their DEI initiatives.

Meanwhile, the Securities and Exchange Commission (SEC) took various steps to tilt the shareholder advocacy playing field in favor of corporate boards and executives and against shareholders pushing them to address important risks. First, the SEC wreaked havoc by updating a Q&A that, in effect, incentivizes large asset managers to cast pro-management votes and halt any positive engagements with companies on critical issues shareholder advocates have put to the fore. It does so by expanding the types of shareholder advocacy that could be construed as “changing or influencing” control of a company, which would trigger further regulatory requirements from investors who own over 5% of a company’s shares. Following the release of the Q&A, BlackRock and Vanguard temporarily halted meetings with companies.

The SEC also made it harder for shareholder proponents to get their voices heard by issuing Staff Legal Bulletin 14M, which changed how the SEC staff evaluates company requests to effectively let them exclude shareholder proposals from proxy statements. As Commissioner Crenshaw noted, this bulletin “moves the goalposts smack dab in the middle of this year’s shareholder proposal process.” She also noted that corporations will be able to make additional arguments to exclude shareholder proposals while shareholders won’t be able to change their proposals to be in line with the parameters set by the new legal bulletin.

Unfortunately, we can expect more actions by the SEC to further incentivize asset managers to cast pro-management votes, coerce proxy advisors to recommend pro-management votes, weaken corporate disclosures, and make it harder for shareholder proponents to get their proposals in proxy statements.

We can also expect detrimental shifts in policy from the Department of Labor as it will likely attempt to rescind a Biden-era rule that makes clear ERISA fiduciaries can take into account relevant environmental, social, and governance factors when making investment decisions and encourages fiduciaries to exercise shareholder rights, including proxy voting. Republican Attorneys General sued to block the rule, but a district court judge in Texas has upheld the rule twice, including this past February.

As the policy terrain continues to shift, shareholder advocates will have to remain vigilant and experiment with new strategies to get their voices heard and make change.

For more perspectives on the 2025 Proxy Season, click here.

Avocado-driven Deforestation in Mexico

The Avocado Industry’s Turning Point: How Corporate Accountability Is Reducing Deforestation in Mexico

In complex situations where environmental and human rights issues driven by a high-impact commodity are not adequately addressed by local regulation, corporations have the power to demand more from their suppliers. When this influence is directed properly, corporations can catalyze significant positive change for all stakeholders. This is demonstrated in the continuing evolution of Mexico's avocado industry, where shareholder engagement, political action, NGO efforts, and community organizing are helping corporations to address rampant illegal deforestation and its impacts.

Our insatiable demand for avocados has created serious environmental and social issues for Mexico. More than 10 football fields of Mexican forests are cleared daily for avocado orchards, with most of this deforestation violating federal law. Illegal deforestation has severe consequences: depleting community water supplies, destroying protected habitats including the Monarch Butterfly Biosphere Reserve, and enabling criminal activities through land seizures and corruption.

In 2023, a powerful New York Times exposé based on a Climate Rights International (CRI) report lifted the veil on the dark side of the avocado industry, exposing illegal practices that have been wreaking havoc on Mexico’s forests and communities for years. The CRI report reviewed satellite images of the same land over time to identify where unpermitted deforestation had occurred. Using that data, avocados from major importers could be traced back to orchards on illegally deforested lands, calling into question the sustainability of a substantial portion of the avocados sold in U.S. supermarkets.

The NYT exposé prompted a reaction. Environmental NGOs began to put pressure on policy makers and grocery chains to address avocado-driven deforestation. In February 2024, six U.S. senators urged the Biden Administration to support efforts to ensure that the US-Mexico avocado trade is not driving illegal deforestation. This collective call to action coincided with the 2024 Super Bowl, prompting action from Michoacán's governor and Mexico's agricultural secretary.

Noting this growing risk, As You Sow began engaging with leading U.S. retailers and distributors of avocados, raising awareness of illegal deforestation in their avocado supply chains and highlighting the practical solution sanctioned by the State of Michoacan: a system to trace and flag illegal orchards and a transparent certification system. Working with Guardián Forestal, a Mexican NGO specializing in GPS data, the State of Michoacan has created an online portal to verify avocado sourcing. The system is elegantly simple: orchards established before 2018 are considered legal - accounting for the six-year growth cycle of avocado trees - while newer orchards without federal permits are flagged as illegal.

The impact of the certification system was immediate and profound. By approaching the issue from both the top down and the bottom up, As You Sow worked with Mission Produce, a major avocado supplier, which committed to avoid the purchase of avocados from illegally deforested orchards. This was soon followed by certification commitments from other major avocado suppliers recognizing the system as a way to ensure ethical sourcing while protecting the environment.

Other retailers and distributors now have the opportunity to not only leverage this verification system to avoid illegal deforestation in the Michoacan avocado market, but to seek expansion of the tool to other Mexican states. By ensuring avocados aren’t coming from recently deforested land, companies can help disincentivize further deforestation in the region.

Solution-oriented action can solve the world’s toughest environmental and social issues. The collective action on avocado driven deforestation provides a blueprint for how industries can work through complex challenges and champion solutions for lasting and meaningful change.

Elizabeth Levy, As You Sow

Large Institutional investors Respond to the Proxy Voting Debate

This article draws from Dorothy S. Lund’s scholarly work, “The Past, Present, and Future of Proxy Voting Choice,” which surveys the evolution of U.S. proxy voting policies and details recent reforms by major index fund managers in response to political and public scrutiny.

The role of BlackRock, Vanguard, and State Street in U.S. markets has changed dramatically over the past two decades. Together, these managers hold massive stakes in most public companies and have become central players in corporate governance. This concentration, combined with the rise of index funds, prompted a lively policy debate: should a handful of big asset managers wield so much voting power?

Under pressure from policymakers and clients, especially on high-profile issues like ESG (environmental, social, and governance), these firms have responded by rolling out voting choice programs. BlackRock’s and State Street’s initiatives now allow a significant portion of institutional and some retail fund investors to guide votes based on selected policy templates. Vanguard has joined as well, expanding access to similar options.

While these programs do not yet put all voting power in the hands of individual investors, they provide new flexibility. Investors can opt into policies that match their priorities or values, such as sustainability or corporate governance best practices. The effectiveness and reach of these programs are still developing, but for the first time, a broad base of fund holders is participating, even if only indirectly, in corporate decision-making.

For example, board diversity is a common proxy voting topic where investors' preferences may vary. BlackRock’s 2025 proxy voting guidelines reflect a case-by-case approach to diversity voting decisions, removing rigid numerical targets but still emphasizing diversity’s importance relative to market norms.

Through BlackRock Voting Choice, institutional and eligible retail investors can now direct their pro-rata share of votes or select from third-party voting policies that might be stricter or more lenient on board diversity issues than BlackRock’s default policy. This means an investor who prioritizes board diversity could opt into a voting policy that votes against boards lacking sufficient gender or racial diversity, while another investor might choose a policy that applies a different threshold or focus.

This flexibility exemplifies the practical impact of voting choice programs: empowering investors to exercise their governance preferences on specific topics such as diversity, while still investing through large index funds. It also demonstrates how the Big Three are adapting governance oversight to evolving political and client demands.

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Further reading.

What Is Proxy Voting Choice?

This analysis is based on Dorothy S. Lund’s 2025 article, “The Past, Present, and Future of Proxy Voting Choice,” published in the Journal of Corporation Law and available via Columbia Law School’s Scholarship Archive. Lund examines how new proxy voting systems have emerged as a response to concerns about the concentration of voting power among a small group of U.S. asset managers, especially the “Big Three”: BlackRock, Vanguard, and State Street.

Proxy voting allows shareholders to cast ballots on important issues at corporate annual meetings, and in recent years, several large asset managers have begun offering clients new choices in this process. “Proxy voting choice” is an innovation where funds give end investors—both institutional and, more recently, retail—the option to influence or directly choose how their shares are voted.

Traditionally, investment managers like BlackRock, Vanguard, and State Street controlled the voting rights for the millions of shares pooled in their investment funds. As these firms grew, concerns mounted about the concentration of voting power among just a few institutions. Critics pointed out that passive index funds have limited incentives to thoroughly research and vote on individual companies, potentially weakening effective corporate oversight.

In response, and after growing public and political pressure on topics like climate change and diversity, asset managers began creating “voting choice” programs. These let clients select from several third-party voting policies or the fund’s default approach. The approach is still voluntary and in its early stages, but millions of investors now have access to some form of voting participation—an important shift in how American corporate governance works. Participation rates and ultimate impacts remain to be seen, but proxy voting choice marks a major step toward democratizing shareholder voice in large public funds.

For example, BlackRock launched its Voting Choice program in 2022, which allows eligible clients—including institutional and some retail investors—to select from a menu of third-party voting policies or use their own. The program has expanded rapidly and now covers $2.7 trillion in index equity assets. More information is available on BlackRock’s official Voting Choice page

Similarly, State Street offers a Proxy Voting Choice program that permits eligible investors in institutional index funds and certain ETFs to decide how their pro-rata share of votes is cast. The program includes access to several third-party voting policies and continues to expand across eligible funds. Details can be found at State Street’s proxy voting page.

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To access the full article, please click here.

Responsible Investment Requires a Proxy Voting System Responsive to Retail Investors

There is growing awareness amongst retail investors of the importance of environmental, social, and governance (ESG ) factors to the performance of their stocks. The same factors impact their lives from a broader societal and economic perspective. Institutional investors have incorporated ESG issues into their proxy voting and corporate engagement. Retail investors who invest in stocks directly have the same voting rights, and collectively a similar power, but data shows that their voting rates have declined precipitously over the past forty years. This chapter traces the history of property rights and proxy voting, examines them within the current regulatory context, and posits that economic rights have been well protected but ownership rights have been neglected. An established framework for stages of capitalism is re-imagined, situating retail investors’ disengagement from the proxy process and highlighting suggestions to regulators for addressing the proxy voting gap.

To read the full paper, please go to SSRN’s website.

Ian Robertson

University of Oxford

ICCR Letter to BlackRock on Integrating ESG Risk Factors

In November of 2024, ICCR wrote Larry Fink, the CEO of BlackRock, expressing a number of concerns regarding BlackRock’s 2024 proxy voting record on shareholder proposals related to environmental and social and governance (ESG) risks.

Dear Mr. Fink,

We are writing on behalf of the Interfaith Center on Corporate Responsibility (ICCR), a coalition of over 300 global institutional investors that collectively represent more than $4 trillion in managed assets, to reflect the concerns of a number of investors and clients regarding BlackRock’s 2024 proxy voting record on shareholder proposals related to environmental and social and governance (ESG) risks. Our members, many of whom are shareholders and clients of BlackRock, are long-term investors who have raised these concerns with you before through conversations and correspondence.

While we are mindful of the recent pressures fund managers face from parties attempting to discredit ESG, the fiduciary case for integrating material ESG risk factors into investment decisions and proxy voting is clear and irrefutable. BlackRock’s own research1 indicates that the long-term implications of inaction on climate change could reduce global economic output by nearly 25 percent over the next two decades, making addressing climate change a material issue for fiduciaries. Yet despite this, BlackRock's recently released 2024 Global Voting Spotlight reports that the firm “supported (only) four out of the 161 shareholder proposals on climate and natural capital that we voted on”. This was 2.5% of votes cast on climate resolutions. The firm’s proxy voting record on shareholder resolutions related to impacts on people was no better as BlackRock “supported 16 out of the 332 shareholder proposals we voted on (~5%), 14 at U.S. companies and two in EMEA”. We believe this an abdication of fiduciary duty and is also bad business.

BlackRock’s survey of institutional investors clearly indicates that your clients care about proxy voting on sustainability (which emerged as the number one criterion for selecting managers by 20% of 200 institutional investors surveyed, second only to “access to proprietary deals’ - selected by 23% of respondents) so you will not be surprised that we are raising these concerns again.

Furthermore, BlackRock’s 2024 proxy voting record and rationale appear at times to be unclear. The most recent NPX filings indicate BlackRock voting against disclosure asks that it supported only last year, and offering vague voting rationale on other asks arguing that: “The request is either not clearly defined, too prescriptive, not in the purview of shareholders, or unduly constraining on the company”. The 2024 Global Voting Spotlight also indicates that in over 60% of the cases, BlackRock did not support a shareholder resolution because the "company has a process in place to address business risk” even in cases when the company did not make appropriate disclosures about the processes in place to address the issue(s) to the shareholders, the proponents or the SEC. At DexCom, BlackRock opposed a majority supported 2024 shareholder proposal calling for political spending disclosure in an election year. This is a clear example of BlackRock’s understanding of material risks raised by shareholder proposals diverging from the majority of shareholders at the company. Given how important proxy voting on sustainability is to your clients we hope you will address some of these apparent inconsistencies.

In February 2024, we welcomed BlackRock’s announcement that it was developing a new sustainability-focused stewardship offering for clients who want its active ownership work to drive decarbonization and sustainability outcomes3. The announcement explained that this service was in response to client demand as a survey of 200 institutional investors globally, representing nearly $9tn in assets under management indicated that 98% of them have set some kind of transition investment objective for their portfolios. However if managing climate risk is a key element in maximizing long-term value for clients then we would expect BlackRock to pursue that consistently as part of your fiduciary duty. BlackRock’s own Resilience Through Change; 2024 Insurance Global Report indicates that 99% of the 410 senior executives representing US 27T of AUM surveyed reported having set at least one type of transition objective within their investment portfolio, a clear indication of the materiality of climate risks among the majority of that sector.

As we look at the hundreds of climate related and social resolutions, we believe many more than 4 resolutions make a strong business case related to shareholder value and are not overly prescriptive. It seems like BlackRock has instituted a new high bar for shareholder resolutions that is almost impossible to meet. We are concerned about what motivated this change and fear that pressure from conservative investors played a role in the shift. In addition, we note that many other investment firms guided by the same fiduciary standards as BlackRock have a much higher number of percentage of votes for resolutions.

Furthermore, while we appreciate your case-by-case approach to assessing shareholder proposals, ICCR members and many of your clients are investors with diversified portfolios and ignoring systemic risks like climate and racial justice may benefit one of their companies but passes that cost on to the other companies in their portfolio. PRI and CAF’s recent guidance on stewardship also states that: “Using influence to promote short-term performance or the performance of individual companies, industries, or markets, without regard to overall value, does not constitute stewardship”.

There is growing evidence that asset owners are becoming increasingly concerned about asset manager’s proxy voting on ESG shareholder proposals5 and many are taking action6. And it seems these concerns are well placed. The UK Asset Owner Stewardship Review highlights a growing misalignment between asset owners and asset managers when it comes to exercising stewardship and proxy voting at major Oil and Gas companies. This misalignment is more pronounced (i) in recent years, (ii) on shareholder resolutions (vs management proposals) and (iii) at American companies (vs. European ones). There is also worrying evidence that asset managers’ corporate engagements are not moving the needle with companies.

As clients and shareholders our members want to see BlackRock as both a market and an ESG leader and would welcome efforts on behalf of the firm’s leadership to reiterate their commitment to ESG and to commit to a critical review of their proxy voting guidelines and record. We welcome the opportunity to continue the dialogue with you on the issues raised.

Sincerely,

Josh Zinner, CEO Interfaith Center on Corporate Responsibility

Katie McCloskey, Vice President of Social Responsibility, Mercy Investment Services

David A. Klassen, Chief Investment Officer, The Pension Boards - United Church of Christ, Inc.

Matthew Illian, Director of Responsible Investing, United Church Funds

Ethan Birchard, Executive Director, Friends Fiduciary Corporation

Corporate Support for DEI Continues Among Investors and Companies

August, 2025

During this proxy season, companies faced a wave of shareholder resolutions attacking diversity, equity, and inclusion (DEI) programs and calling for their eradication. This campaign expanded on last year’s anti-DEI attacks, as tracked in the “Championing Diversity in Corporations," which also included quotes from numerous companies strongly defending their diversity programs. This year’s anti-DEI resolutions built upon growing attacks on DEI by various government agencies and right-wing critics, who argued that company diversity programs were on the way out. Interestingly, these anti-DEI resolutions conveyed the exact opposite message, demonstrating that investors and companies alike believe that diversity has a positive impact on employees and long-term shareholder value.

In fact, in this proxy season, approximately 98% of the shares voted to maintain current corporate diversity, equity, and inclusion programs. Companies including Disney, Costco, Visa, Apple, Deere, Boeing, Goldman Sachs, Levi’s, AMEX, Coca-Cola, Berkshire Hathaway, Bristol Myers, and Gilead Science saw near-unanimous votes, averaging a mere 2% shareholder vote supporting these resolutions, sending a clear message to the boards that shareholders support the business case for non-discrimination in employment and a diverse workforce.

Many of these companies under attack remained publicly committed to their longstanding DEI programs. Corporations like Costco, JPMorganChase, Delta Air Lines, American Airlines, Southwest Airlines, and Apple continue to view diversity as a cornerstone of their workforce strategies, refusing to back down despite mounting pressure from conservatives.

These companies fully understand the benefits of having diverse teams and leadership. For example, a review by As You Sow and Whistle Stop Capital of over 1,600 companies found that manager diversity is positively associated with key financial performance indicators, including return on equity and invested capital, revenue growth, and share price performance.

Similarly, a recent investor brief by the Canadian organization SHARE found that diversity, equity and inclusion add to company performance and, therefore, shareholder value. If a company eliminates or dilutes efforts to promote diversity, they are neglecting that benefit and adding risk for investors. Simply stated, the data shows that diversity is good for business.

The following is an excerpt from a series of quotes and public statements from Senior executives on DEI. This is a small snapshot of company statements, but it clearly demonstrates the fact that numerous leading corporations strongly resist these attacks and stand behind their commitment to non- discrimination and diversity. At the end we also include relevant articles.

AMERICAN EXPRESS:

"We Embrace Diversity: We believe that diversity of experiences, perspectives, and backgrounds enables us to be our best."

BOEING

“Boeing remains committed to recruiting and retaining top talent and creating an inclusive work environment where every teammate around the world is respected, valued, and empowered to succeed," and defended its "culture of nondiscrimination, inclusion, and meritocracy."

COCA-COLA

"Creating a culture of diversity, equity and inclusion. Diversity, equity and inclusion are at the heart of our values and our growth strategy and play an important part in our company's success." 

GOLDMAN SACHS

“We run an inclusive organization, and we’re going to continue to run an inclusive organization.” - David Solomon, CEO, Goldman Sachs

JPMORGANCHASE

“We will continue to reach out to the Black community, the Hispanic community, the veteran’s community, and LGBTQ. We have teams with second chance initiatives — governors in blue states and red states like what we do.” - CEO Jamie Dimon in a CNBC interview.

MICROSOFT

“If ever there were a critical time for the business case for diversity and inclusion in the workplace, it is now… Our innovation has come from our commitment to Diversity and Inclusion (D&I), and our future innovation depends on D&I.”

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To read the full article, please click here.

This document was drafted by Maxwell Homans, Shareholder Advocacy Associate, Mercy Investment Services, in partnership with Tim Smith, Senior Policy Advisor, ICCR.

Legislative Developments in the Shareholder Proposal process

House

On September 18, 2024, the US House of Representatives passed H.R. 4790, the Prioritizing Economic Growth Over Woke Policies Act.110 The legislation is an umbrella bill incorporating a number of other bills that, among other things, significantly increase the ability of companies to exclude shareholder proposals from the proxy statement, including:

• amending the Securities Exchange Act of 1934 to prohibit the SEC from compelling an issuer to include in the proxy statement any shareholder proposal or any discussion related to a shareholder proposal. The bill also expressly states the SEC may not preempt state regulation of proxy materials or shareholder proposals. (Section 2002)

• increasing requirements for resubmission of proposals to require 10% voting support for a first-year proposal, 20% for a second year proposal and 40% for third year proposal, compared to current requirements of 5% voting support the first year, 15% for the second year and 25% for the third year. (Section 3101)

• allowing companies to exclude shareholder proposals where the company already has policies, practices, or procedures that compare favorably with the guidelines of the proposal and address the proposal’s underlying concerns. (Section 3201)

• allowing companies to exclude any proposal relating to environmental, social or political issues from proxy or consent solicitation material. (Section 3301)

• allowing companies to exclude a shareholder proposal under Rule 14a-8(i) without regard to whether the proposal relates to a significant social policy issue. (Section 3401)

• requiring the SEC to conduct a “wasteful and unnecessary” study every 5 years on shareholder proposals, proxy advisory firms, and the proxy process, covering a variety of topics, including the purported costs incurred by the shareholder proposal process and the “risk that shareholder proposals may contribute to the balkanization of the US economy over time.” (Section 3501)

•  providing that an institutional investor may not outsource voting decisions to any person other than an investment adviser or a broker or dealer that is registered with the Commission and has a fiduciary or best interest duty to the institutional investor. (Section 3901)

Senate

On September 23, 2024, S. 5139, the Empowering Main Street in America Act of 2024, was introduced. Among other things, the bill would allow a company to exclude a shareholder proposal from its proxy statement without regard to whether that shareholder proposal relates to a significant policy issue. (Section 305)

SEC Increases Exclusion of Proposals - 2023-2025

In order to help companies decide whether a proposal passes these tests, the SEC has developed a process to allow companies to ask the SEC in advance whether a proposal must be included in the meeting materials. The “no action” process is an informal review process through which the SEC staff advises companies and their investors on whether the SEC staff would likely recommend enforcement action if a company fails to include a submitted shareholder proposal on its annual proxy statement. The staff grants the company’s request if it finds some basis to agree with the company’s arguments that the proposal is excludable under one of the elements of SEC Rule 14a-8. It denies the request if it is unable to concur with the company’s arguments.

SEC Rule 14a-8 is intended to exclude trivial, irrelevant, and inappropriate shareholder proposals, thus minimizing the burden on companies. The no action process is a structured, time-tested process that adds an additional layer of objective scrutiny to company decisions regarding whether to include or exclude proposals, which serves to protect investors’ interests. If an investor disagrees with the no action decision by the SEC, the investor can submit a letter in opposition, but it does not have legal recourse against the SEC. Without Rule 14a-8 and the no action process, an investor only has the option to sue the company under federal law if it disagrees with a company’s decision to not place a proposal on the proxy, which would add delays, and significant costs for both parties.

The SEC staff periodically recalibrates its interpretation of the rules of the no action process to reflect current issues of concern to investors and companies. For example, in 2021, the SEC staff issued an interpretive bulletin, Staff Legal Bulletin 14L, which clarified ordinary business and micromanagement rules in a manner that allowed some environmental and social proposals to reach the proxy that might not have qualified in a prior interpretation. However, following market response and criticisms, the staff tightened up its interpretations of micromanagement and excluded many proposals on social and environmental issues that had previously been allowed, even with the new bulletin remaining in place. From November 1, 2023 to May 1, 2024 the SEC staff supported company requests for exclusion of proposals roughly 68% of the time, similar to the average exclusion rate during the first Trump administration, from 2017-2020, which was 69%.

In the 2025 proxy season, the staff again tightened its interpretation of the micromanagement rule, excluding, for example, proposals on lobbying disclosure that had previously been permissible since at least 2011. On February 12, 2025, the SEC staff signified that it is taking a more restrictive posture on proposals that request specific forms of disclosure or actions by companies. SLB 14M issued on that day revoked SLB 14L and altered staff interpretations of the micromanagement, ordinary business and relevance exclusions. The new interpretations led to an increase in the exclusion of environmental and social proposals, and fewer such proposals appearing on proxy statements. Of particular note in SLB 14M is a shift in interpretation of micromanagement from SLB 14L’s focus on the interest and capacities of shareholders to understand and vote on an advisory proposal, and toward an evaluation as to whether the proposal seeks a specific method, strategy or outcome that the staff views as more appropriately determined by the board or management.

When Public Sentiment Drives Shareholder Strategy

How headlines, hashtags, and media cycles are reshaping proxy season

Do public opinion and media narratives really influence shareholder proposals? A new study says: yes, and in some cases, that influence is financially material.

Analyzing proposal volumes and public discourse, the authors find that:

• Increased public salience of corporate issues (like AI ethics, reproductive rights, or climate impacts) correlates with a rise in ESG-focused proposals;

• These proposals are more likely to receive broader investor support when they align with media attention and reputational risk;

• And when companies respond constructively, firm value tends to improve.

📉 Sentiment as an Early Warning Signal

For investors, public opinion is often a precursor to regulatory or reputational risk. Think of social movements that preceded litigation, consumer backlash, or regulatory intervention—public scrutiny often arrives before the balance sheet feels the impact.

This study confirms that investor engagement is increasingly attuned to reputational signals and that media awareness serves as a “soft metric” for materiality.

“In today’s democratized information environment, companies can no longer operate behind closed doors, shielded from public scrutiny. Shareholders, armed with public sentiment data, are increasingly willing to hold management accountable. This new reality underscores the importance of transparency and responsiveness in maintaining investor trust and long-term value creation. ”

These insights have significant implications for both corporate leaders and investors. For management, the warning is: ignoring public sentiment can lead to increased shareholder activism and leadership turnover. For investors, our findings highlight the effectiveness of acting with the public’s voice in leading to corporate change.

Refer to the original article here.