The SEC Should Avoid Overreach and Support Investors' Fiduciary Duty
The Securities and Exchange Commission is taking steps that could change how shareholders exercise their ownership rights and how institutional investors manage risk. The issue is larger than environmental, social and governance investing. It goes to a basic question of fiduciary duty: Can an asset owner evaluate information that may affect the value of its portfolio without being treated as a political activist?
The SEC's Shift in Policy
The SEC has moved beyond debating particular ESG practices. In August, the Division of Corporation Finance announced that it would stop responding to shareholder-proposal no-action requests altogether. Companies must still notify the SEC when they intend to exclude a proposal, but the staff will no longer indicate whether it would object
In September came a more consequential step: the Commission the federal rule that gives shareholders a way to place qualifying proposals in corporate proxy materials. Under the proposal, questions about shareholder proposals would be left primarily to state law and corporate governing documents. [Chairman Paul Atkins says the change is necessary because the SEC should not intrude into state corporate law.
A Campaign Against "Woke" Proposals
The debate over federal versus state authority is legitimate. But the SEC's policy direction also sits squarely within a larger political and business campaign against ESG and against shareholder proposals characterized as ideological or "woke."
In a 2022 comment letter, the Business Roundtable called for Rule 14a-8 to be restored to what it considers its original purpose by excluding proposals that advance "broad ideological agendas .It argues the process should focus on long-term value creation and has urged Congress and the SEC to act.
The U.S. Chamber of Commerce has taken a similar position. On the day the SEC announced its proposal to rescind Rule 14a-8, the Chamber welcomed the action saying special interests had exploited the rule to advance their agendas at the expense of public companies and shareholders. The alignment matters. The Trump administration, business organizations and federal agencies are challenging ESG, DEI and related shareholder activity as ideological, while the SEC is changing the regulatory structure that governs how shareholders bring such matters before fellow owners. One need not assume the SEC is acting at the direction of these organizations to recognize that their policy positions and the Commission's proposed rule changes point in the same direction.
But a political label does not answer an investment question.
A pension fund does not become a political organization because it evaluates workforce turnover. An endowment does not abandon fiduciary discipline because it examines climate exposure. A foundation does not become an activist because it asks whether human-capital practices affect financial performance. Investors routinely examine information that management finds inconvenient or that political constituencies find controversial. The fiduciary test is narrower: Does the information have a reasonable connection to risk, return, valuation or long-term financial performance?
Activists Must Answer with Evidence
Shareholder advocates also have a responsibility. When the Business Roundtable, the Chamber and their allies call ESG proposals "woke," proponents should respond with evidence of financial materiality, not an appeal to social importance. They should explain how an issue can affect revenue, costs, capital allocation, productivity, litigation exposure, regulatory risk, access to capital, workforce stability or long-term enterprise value.
A pension fiduciary need not support a proposal because it advances a social objective. The question is whether the underlying factor could reasonably affect beneficiaries' economic interests. Employee turnover that affects productivity is a financial consideration. So is a governance practice that creates material litigation or regulatory exposure, or a climate risk that threatens assets, supply chains, insurance costs or capital expenditures.
This approach is consistent with the SEC's own emphasis on materiality. Even the Business Roundtable has suggested that climate-related information should be disclosed when material to investors .The same standard should apply to ESG and anti-ESG proposals alike, without first asking whether the subject is politically conservative or progressive.
It also gives advocates a stronger response to the SEC's criticism of Rule 14a-8.Commissioner Mark Uyeda has argued that some proposals are pushed by political interests with no fiduciary obligation to the company or its shareholders, and that some subjects lack material relevance.Those concerns should not be dismissed. They should be answered proposal by proposal.
The burden runs in both directions. Companies and trade associations should not be able to wave off a proposal by labeling it "woke." Proponents should not expect support merely because their goal is desirable. Both must address the same question: What is the economic connection between the issue and long-term financial interests?
What Rescission Would Change
Rule 14a-8 has never required investors to support every proposal. It gives shareholders a way to bring qualifying matters before fellow owners, who then decide. Some proposals may be political, duplicative, immaterial or overly prescriptive. Others address matters investors reasonably believe affect corporate value. The proper response is to examine the economic facts, not to presume an entire category of subjects is ideological.
Rescission would change that balance. The SEC says it restores the traditional authority of state corporate law. Critics counter that it could produce different shareholder rights depending on a company's state of incorporation and give boards greater control over what reaches shareholders. The business groups that have pressed for narrowing the rule would be among the beneficiaries.
Smaller shareholders have the most to lose. Large institutions can engage companies privately, hire lawyers and consultants, and speak directly with management. A small shareholder has far fewer resources, and the federal proxy process has offered a relatively inexpensive way to put a question before fellow owners. The retreat from the no-action process adds uncertainty, leaving companies and proponents to resolve disputes through other means, including costlier litigation.
The full article also addresses the SEC’s October report on Climate Action 100+
The SEC’s Proposal to Eliminate Rule 14a-8 Removes Accountability
Oct 09, 2026
Watering down financial regulations makes it easier for companies to put profits over people.
Some background: State treasurers like me are sounding the alarm on the Trump administration’s proposal to eliminate a safeguard that has given investors a voice for more than 80 years: Rule 14a-8. This gives eligible shareholders the ability to include qualifying proposals in a company’s proxy materials, the documents investors receive before voting at an annual meeting. In doing so, eligible shareholders can raise concerns with the companies they own and bring those concerns before other investors.
The SEC’s proposal to eliminate Rule 14a-8 is a direct threat to the rights of long-term investors, and I am concerned it will curtail our ability to hold public companies accountable.
Accountability to shareholders is the foundation of public markets, and engaged shareholders make companies stronger. Weakening the federal shareholder proposal process is not going to make the sustainability risks for companies go away. It’s just going to make it harder for shareholders to raise them.
Listen to my remarks on a For the Long Term press all about the SEC rule change.
As Illinois’ Chief Investment and Banking Officer, I have a responsibility to protect the interests of taxpayers, retirees, and college savers. Shareholder proposals are an important tool for ensuring that companies address material risks that can affect workers, consumers, communities, and investors alike. They are also a key tool for engaging with boards to make sure their actions and oversight align to driving long-term durable returns.
The SEC should be protecting investors, not making it easier for companies to avoid accountability, and I strongly oppose this proposal and urge the Commission to preserve Rule 14a-8 and the shareholder rights it protects.
I have used shareholder proposals to encourage stronger health and safety practices at companies, to advocate for corporate boards to prioritize patients and quality of care when providing healthcare, and to enhance board oversight of material sustainability risks. Eliminating this rule will not make financial, governance, or operational risks disappear. It will simply make them harder and more expensive to flag. Replacing a uniform federal framework with a complex patchwork of state laws and company-by-company rules will increase inefficiencies, costs, and disputes.
Let me offer an example of this process working correctly. In 2023 and 2024, my Office supported shareholder proposals filed by Proxy Impact that called for Meta to assess child safety and implement harm reduction measures on Meta platforms. Two years later, the issue of child safety poses a significant risk to Meta, including recent lawsuits and fines. This illustrates how shareholders can use proposals to raise material risks to companies. We shouldn’t make it harder for shareholders to do so.
Shareholder proposals also are a useful tool for State Treasurers to lead constructive and collaborative dialogue with companies. A couple years ago, we filed shareholder proposals at Southwest & American Airlines over health and safety concerns among their employees and contracted employees, including heat stress for workers on the tarmac. The airlines made commitments, and we withdrew the shareholder proposals.
Since then, we have continued to work with both companies to enhance their disclosure on health and safety, including providing input on their annual sustainability reporting and what would be most helpful for the companies to disclose. One of the companies committed to obtaining an Operational Safety audit when we withdrew the proposal and has since then obtained it. That’s an important step towards keeping employees safe.
This SEC proposal to do away with a rule that has worked since 1942 is part of the Trump administration’s continuing demolition of guard rails. We have seen time and again Trump gutting the rules to put money in the pockets of his family and his cronies. The president is enriching the Trump family over the interest of all Americans. Watering down financial regulations makes it easier for companies to put profits over people.
The SEC should not make its limitations to the 14a-8 process permanent or eliminate its shareholder proposal framework. I am calling on the SEC to protect retirees, pension beneficiaries, individual investors and families saving for their child’s college education by keeping the rules in place.
The SEC’s comment period is currently scheduled to close on November 20, 2026. Submit a comment urging the Commission to preserve Rule 14a-8.
SEC Proposal to Move Proxy Oversight to States Comes Under Industry Scrutiny
Matt Toledo, September 17, 2026
According to the Securities and Exchange Commission, Rule 14a-8 exceeds the SEC’s authority, but opponents said the SEC’s proposal takes a ‘sledgehammer’ to shareholder proposals.
The Securities and Exchange Commission announced Wednesday a proposal to rescind Rule 14a-8 under the Securities Exchange Act of 1934. The proposal would eliminate SEC oversight of shareholder proposals in public companies’ proxy materials for vote by shareholders and would “leave determinations about the role of shareholder proposals to state law and company governing documents,” according to the SEC’s release.
“Many of the justifications for adopting the rule either have not been substantiated in practice or are less compelling today, and the rule has had unintended consequences, including the implication of federal preemption that may have discouraged states from developing their own laws governing shareholder proposals,” the SEC stated.
Additionally, the SEC proposed amendments to Rule 14a-4(c) in an effort to modernize the proxy solicitation process. These amendments, according to the SEC, would:
Eliminate the requirement that companies deliver an annual report to security holders;
Eliminate the delivery deadline when documents are incorporated into a proxy statement;
Eliminate the requirement and the ability to submit notices of exempt solicitation; and
Shorten the minimum broker search period to five business days from 20.
“The proposed rescission of Rule 14a-8 would, if adopted, eliminate the federal rule regulating inclusion of shareholder proposals in a company’s proxy materials for vote by the company’s shareholders,” said SEC chair Paul Atkins in a statement. “To be clear, the proposed rescission would not eliminate the concept of shareholder proposals and is not an attempt by the Commission to silence shareholders. Rather, it is a recognition that the Commission must act within its authority.”
Targeting Shareholder Voting
Atkins, in his statement, said of the proposal’s timing that, coming during a period “of increased competition among states for corporate domicile, there is no better time for the Commission to recognize the limits of its authority, relative to state law, for regulating shareholder proposals. Competition has always been the engine for innovation and progress in America. As part of states’ efforts to attract companies, the proposed rescission of Rule 14a-8 should, if adopted, provide states with both the legal clarity and the motivation to implement their own ideas for a sensible shareholder proposal framework.”
The SEC proposal comes as President Donald Trump has focused on changing the shareholder voting process, specifically by limiting the role of proxy advisory firms, most notably by a December 2025 executive order. Trump named the two largest proxy advisers, Institutional Shareholder Services Inc. and Glass, Lewis & Co. LLC, and said they “wield enormous influence over corporate governance matters, including shareholder proposals, board composition, and executive compensation, as well as capital markets and the value of Americans’ investments more generally, including 401(k)s, IRAs, and other retirement investment vehicles.”
Trump’s order directed the SEC chair to “consider revising or rescinding those rules, regulations, guidance, bulletins, and memoranda that are inconsistent with the purpose of this order”; to review proxy advisers’ work for violations of the anti-fraud provisions of federal securities laws; and to screen their work overall for other potential violations of federal law.
Institutional Shareholder Services is part of ISS STOXX, which owns CIO.
A report from law firm Akim Gump Strauss Hauer & Feld LLP noted that the recission of rule 14a-8 would remove the lowest-cost channel for placing proposals in front of shareholders, resulting in institutional investors having to develop more resource-intensive and less certain methods to distribute shareholder proposals.
Some companies have moved their official domicile to benefit from less stringent governance standards, including proxy rules. Space Exploration Technologies Corp.—SpaceX—was criticized by institutional investors for moving to Texas from Delaware in 2024, because corporate laws in Texas make it more difficult for investors to initiate shareholder proposals. SpaceX’s move came after a Delaware Court of Chancery ruling that ordered Tesla to rescind Elon Musk’s 2018 CEO pay package, worth about $56 billion in options.
Industry Reactions
The California Public Employees’ Retirement System was critical of the SEC’s proposal. James Scullary, a spokesman for the system that managed $637.1 billion in pension assets as of June 30, says the fund views Rule 14a-8 “as a critical component of company-shareholder engagement.”
“The SEC’s proposal to rescind the rule directly harms the fundamental rights of shareholders and limits our ability to engage constructively and advocate for policies that positively influence long-term share value,” Scullary says.”For decades, the federal proxy process has been a vital, standardized mechanism for investors to raise material risks and hold corporate boards accountable. Dismantling this framework doesn’t modernize our markets; it simply silences the actual owners of these companies. In addition, by abandoning a unified federal standard and kicking the shareholder proposal process down to a patchwork of 50 state laws and individual corporate bylaws, the SEC is introducing inefficiencies and potential legal issues into U.S. capital markets.”
Glenn Davis, executive director of the Council of Institutional Investors, responded to the SEC proposal, saying “Yes, shareholder proposals can be a source of embarrassment when they reveal a disconnect between shareholders’ and managers’ understandings of what matters to long-term performance; and sometimes trigger compromise before a vote takes place. That is a feature of strong capital markets, not a basis for a government agency to swat a fly with a sledgehammer.”
The Interfaith Center on Corporate Responsibility, in a statement, referred to the proposed rescinding of 14a-8 as an “all hands-on-deck” moment for investors, while also describing the move as an attack on the fundamental rights of shareholders and on decades of precedent that have facilitated engagement between investors and companies.
“Investors focused on safeguarding the long-term value of their holdings have benefited from the shareholder engagement process as a key instrument for constructive dialogue between shareholders and executives for over 50 years,” ICCR CEO Josh Zinner said in a statement. “These engagements have led to many commonplace improvements in corporate risk mitigation and governance policies now considered best practices in a wide range of industries.”
Proponents of the SEC proposal said the shareholder proposal process has been hijacked by investors with a political agenda—generally referring to institutional asset owners and funds that have made environmental, social and governance factors a major focus of their shareholder proposals.
“The SEC’s previous proxy rules allowed political activists to hijack the proxy system at the expense of everyday investors,” said Chris Iacovella, president and CEO of the American Securities Association. “ASA applauds Chairman Atkins for ending the use of SEC resources to referee political disputes and redirecting them toward the agency’s core mission of protecting investors from fraud.”
The U.S. Chamber of Commerce, a trade association, also welcomed the SEC proposal. Mike Flood, senior vice president of the chamber’s Center for Capital Markets Competitiveness, said, “For too long, special interests have exploited Rule 14a-8 to advance their own agendas at the expense of public companies and their shareholders. We commend the SEC for seeking a long-term solution to this problem and for its ongoing work to encourage more businesses to go public.”
Microsoft commits to continue fielding shareholder proposals through 2027 AGM
Jack Grogan-Fenn, 5 September 2026
As the SEC considers dismantling the federal shareholder proposal framework, Microsoft has moved early to reassure investors that access rights will remain for at least its next two annual meetings.
Technology giant Microsoft has agreed to continue accepting shareholder proposals under existing ownership thresholds through its 2027 annual meeting, becoming one of the first major US issuers to publicly commit to preserving shareholder proposal access following the US Securities and Exchange Commission (SEC) proposal to rescind Rule 14a-8.
The agreement comes as investors increasingly seek clarity from individual companies on how they would handle shareholder proposals if the federal framework were removed. By putting its position in writing ahead of a final SEC decision, Microsoft has provided an early indication of how issuers may respond and established a potential reference point for investors engaging with other companies.
Microsoft moves to preserve existing proposal thresholds
The National Legal and Policy Center (NLPC) announced on 22 September that it had secured an agreement with Microsoft under which the company will continue applying the current ownership thresholds for shareholder proposals through its 2027 AGM. Microsoft’s 2026 AGM is set to take place on 8 December, with the company yet to publish its proxy materials.
“Microsoft put in writing that the smallest long-term owners of the company will still have a way to be heard next year, no matter what the SEC does,” said Paul Chesser, Director at the NLPC. “Every other company that claims to value its shareholders should be asked why it won’t do the same.”
The agreement follows the SEC's proposal to rescind Rule 14a-8, amend Rule 14a-4 and “modernise” the proxy solicitation process. The proposals would remove the federal mechanism that currently allows eligible shareholders to place resolutions before fellow investors through company proxy materials.
Against that backdrop, the NLPC submitted proposals to a number of companies, including Microsoft, seeking commitments to maintain access for proponents meeting the existing ownership thresholds of US$2,000 held for three years, US$15,000 for two years or US$25,000 for one year. Following discussions with the company, the Microsoft proposal was withdrawn. The first proposal in the campaign to proceed to a shareholder vote is set to be considered at consumer goods company Procter & Gamble's AGM on 13 October.
While debate over Rule 14a-8 has largely focused on regulators, Microsoft's decision is significant because it moves the discussion towards corporate policy. Rather than waiting for a final regulatory outcome, the company has chosen to state publicly how it intends to approach shareholder access in the near term.
Attention shifts from regulators to companies
The question now facing investors is whether other issuers will make similar commitments.
Under the current system, companies must include procedurally compliant shareholder proposals in proxy materials ahead of annual meetings. If Rule 14a-8 is rescinded, companies would have significantly greater discretion over whether, and on what terms, shareholders can submit resolutions for consideration by fellow investors.
Evidence that attention is already shifting towards companies can be seen elsewhere in the debate. Shareholder advocate Jim McRitchie has called on Costco to submit a comment letter opposing the SEC's proposal, arguing that the retailer has historically benefited from the shareholder proposal process and warning that rescinding the rule would replace a single federal standard with company-by-company uncertainty. He also suggested that investors are likely to remember how companies position themselves as the debate unfolds.
Similarly, Zevin Asset Management wrote to Costco urging the company to “actively protect corporate governance best practices and capital markets integrity related to Rule 14a-8”. The investor also warned that weakening or rescinding Rule 14a-8 would “disrupt an established, low-cost dialogue and lead to significant unintended consequences for public companies”.
Against that backdrop, Microsoft's agreement provides one of the earliest examples of an issuer making an explicit commitment before regulators have reached a final decision. For investors seeking assurances that shareholder proposal rights will continue, it may become an important benchmark when engaging with other companies.
Support for shareholder proposals spans ideological divides
The agreement is notable not only because of the company involved, but also because the initiative originated with the NLPC, an organisation best known for its criticism of ESG and diversity-related initiatives.
That dynamic reinforces a broader theme emerging from the Rule 14a-8 debate. Concerns about preserving shareholder access are increasingly being expressed across different parts of the investor and policy landscape.
“The recent report noting Microsoft has come to an agreement with a conservative investor advocate to allow shareholder proposals to continue to be filed is an example of good governance by the company,” Smith, Senior Policy Advisor at the Interfaith Center on Corporate Responsibility, told Minerva Analytics. “Investors and companies alike are facing a huge vacuum if the SEC rescinds Rule 14a-8. Since the SEC announcement, many investors have discussed urging companies to develop their own policies to allow resolutions to be filed going forward.”
Smith added that removing the shareholder proposal mechanism may leave investors increasingly reliant on alternatives such as litigation and vote campaigns to raise concerns. Sanford Lewis, Director and Founder of the Shareholder Rights Group, likewise described Microsoft's decision as a positive governance step and expressed hope that other companies will adopt similar approaches.
The breadth of opposition to rescinding Rule 14a-8 has become increasingly apparent. Representatives of pension funds in both Republican- and Democrat-led states have raised concerns about the proposal, while voices from across the political spectrum, including the Heritage Foundation and Bowyer Research, have highlighted potential risks associated with dismantling the existing framework.
What happens if the SEC rescinds Rule 14a-8?
Whether other companies choose to make similar commitments remains unclear. However, Microsoft's agreement provides one of the first tangible signs that issuers are beginning to plan for a post-Rule 14a-8 environment.
The significance of the development lies less in its immediate impact on Microsoft than in what it may signal for the wider market. If the SEC ultimately removes the federal shareholder proposal framework, investors are likely to focus increasingly on company-level policies and commitments. Microsoft has moved early to set out its position. The next question is whether other issuers decide to do the same.
SEC Move Would Make it Harder for Shareholders to Push Companies on Climate Action
Dimuthu Attanayake, October 3, 2026
Shareholder proposals aren’t legally binding. But companies can feel pressure to take them seriously.
The U.S. Securities and Exchange Commission wants to scrap a rule that allows shareholders to formally petition companies, one of the ways that shareholder advocacy groups have pressed for more action on climate and sustainability.
Investor and advocacy groups warn that the SEC’s move would block a longstanding avenue for pressuring public companies to factor in climate risks that could severely impact their operations.
For instance, investors have used the rule to persuade companies to be more transparent on their emission targets and to better account for other environmental impacts. In 2022, nearly two-thirds of Home Depot shareholders backed a proposal on deforestation in its supply chains. Home Depot commissioned a third-party assessment and released a report in 2024.
“Taking away the right of shareholders to petition companies about climate change really is taking away another tool … not only from investors, but also from the public, to address the climate issue,” said Timothy Smith, senior policy advisor at the Interfaith Center on Corporate Responsibility, a coalition of faith- and values-based investors.
Shareholders Push Companies to Help Retain Proxy Proposal Rights
Drew Hutchinson, Oct 2nd
While the SEC pursues an end to mandatory votes on corporate shareholder proposals, investor advocates are pushing companies themselves to step in and help preserve existing rights.
The burgeoning pressure on companies ranging from Microsoft Corp. to Oracle Corp. comes as the Securities and Exchange Commission seeks to repeal an 84-year-old regulation compelling companies to hold annual votes on shareholder resolutions. States will have the option to fill a regulatory gap if the rule goes through, but in the meantime, stockholders are going straight to the source.
Independent shareholder advocate James McRitchie wrote to Costco Wholesale Corp. last week asking the company to oppose the SEC’s plans in public comments, according to an email seen by Bloomberg Law.
Similarly, investment firm Zevin Asset Management contacted its 30 portfolio companies mid-September urging them to speak out publicly against the proposal, express concerns to the agency’s commissioners, and maintain the status quo, according to sustainable investing director Marcela Pinilla. Meanwhile, the New York State and New York City comptrollers’ offices also called on every publicly traded company to keep accepting the proposals.
Other campaigns began earlier. Noting SEC leaders’ increasing condemnation of the proposal process, the National Legal and Policy Center’s shareholder arm submitted resolutions earlier in the year at a half-dozen companies. One was withdrawn after Microsoft agreed in August to keep accepting proposals that meet existing stock ownership requirements for one year, regardless of what the agency does. Two similar proposals will see a vote Oct. 13 at Procter & Gamble Co. and Nov. 18 at Oracle.
Shareholder proposals can address anything from board practices to diversity, equity, and inclusion. Companies saw an increase in environmental and social justice proposals in the early 2020s following the death of George Floyd, but that trend has since dropped off. In the 2026 proxy season, governance proposals — which ask for measures like independent board directors or certain shareholder rights — were king.
Shareholders see Rule 14a-8, the regulation in question, as a civil, productive way to put key issues in front of companies. Hedge funds have the clout to call up CEOs, but smaller proponents rely on the rule for access, said Paul Chesser, director of the NLPC’s Corporate Integrity Project.
“There’s relatively few of us,” he said. “They don’t have to deal with a lot.”
Divergence Likely
Chesser’s organization has holdings in a couple dozen more companies where it could submit proposals before next spring’s proxy season, when most large companies hold their annual meetings. Future resolutions would probably focus on preserving more aspects of the current federal rule, not just the minimum stock ownership requirements it pursued at Microsoft and Oracle, he said.
Whether companies will embrace shareholders’ pleas for action is up in the air. After asking Costco to submit comments to the SEC opposing the rollback, McRitchie received a response from the company’s general counsel, John Sullivan, according to an email seen by Bloomberg Law: “Thanks for the feedback. We are evaluating the SEC proposal and your comments.”
“The near term is just going to be a lot of issuers taking different paths,” said Brent Trame, partner at Thompson Coburn LLP.
Ultimately, companies will probably keep including at least some shareholder proposals if the existing rule vanishes, said Frank Zarb, partner at Proskauer Rose LLP.
Companies already got a taste of the shareholder proposal process without the SEC. The agency decided last November to stop settling disputes between shareholders and companies about which proposals were required to go to a vote — a policy it said it will continue until further notice. Some businesses operated during the 2026 proxy season as they had in every other year, while others seemed more comfortable excluding resolutions, said Timothy Smith, senior policy adviser at shareholder group Interfaith Center on Corporate Responsibility. It will be the same disparity if Rule 14a-8 disappears, he said.
States Take Spotlight
The SEC views state legislatures and courts as the proper venues to handle shareholder proposal rules, an agency spokesperson said in a recent press briefing.
What states do will also dictate how companies function going forward. Some states could create a mandatory shareholder proposal process, while others could let companies opt in — in which case some would and others wouldn’t, said Benjamin Edwards, a law professor at the University of Nevada, Las Vegas.
Two-thirds of Fortune 500 companies are incorporated in Delaware. But SEC Chairman Paul Atkins has questioned whether the state’s laws guarantee the right to non-binding shareholder proposals, and even invited companies before last proxy season to get a Delaware legal opinion stating so. No one took him up on it.
Delaware’s Corporate Law Council, which advises the general assembly on business code updates, has been studying and deliberating the implications of threats to Rule 14a-8 for months, Secretary of State Charuni Patibanda-Sanchez said in an emailed statement.
“Given Delaware’s expertise in corporate governance, we are the best jurisdiction able to propose a solution that meets the needs of the market,” she said.
The best shareholder proposal framework for companies is sort of like wine, Edwards said: “What is a better fit for one company and their situation may not be a better fit for another.”
Investors should be alarmed by the retreat of the Big Three asset managers from corporate stewardship
Andrew Behar, April 23, 2026
Not long ago, Larry Fink was writing annual letters to CEOs declaring that “climate risk is investment risk.” BlackRock, Vanguard, and State Street, the Big Three asset managers collectively controlling roughly $25 trillion, were telling corporate America that workforce diversity drives financial performance, that executive pay had to be tethered to long-term value, and that companies ignoring environmental risk were companies ignoring shareholder risk. That stance wasn’t altruism. It was investing logic grounded in deep research and fact.
That logic hasn’t changed. What changed is the political weather.
Under sustained pressure from state attorneys general, congressional threats, and an orchestrated anti-ESG campaign, the Big Three have systematically dismantled the very voting policies they spent years constructing. A new analysis of their 2026 proxy voting guidelines, compiled by Weil, Gotshal & Manges, reads like a before-and-after of institutional capitulation. The reversals are not subtle.
State Street’s policy no longer expects companies to disclose climate transition plans, emissions targets, Scope 3 data, or net-zero pathways. During engagement meetings, State Street now instructs itself to remain in “listen-only mode” during any discussion of climate targets.
BlackRock’s climate focus has narrowed from all companies to only those facing “material climate-related risks,” a loophole large enough to drive an oil tanker through. Vanguard has deleted the language requiring that board oversight failures on environmental and social risk trigger accountability votes against directors.
On workforce diversity, the retreat is equally stark. BlackRock no longer expects companies to disclose their approach to diversity, equity, and inclusion and has removed references to EEO-1 reporting as a baseline for workforce transparency. State Street, which famously placed the “Fearless Girl” statue in front of Wall Street’s Charging Bull, no longer expects any specific DEI disclosure and will not discuss diversity targets with companies.
Vanguard has excised “personal characteristics” like gender and race from its definition of board diversity altogether. These are not refinements. These are board-level decisions that will have negative financial consequences for their clients.
Systemic risk
The financial case for these commitments was never speculative. As You Sow’s research across 1,641 companies over five years demonstrated that greater workforce diversity correlates with outperformance on eight key financial measures: enterprise value growth rate, free cash flow per share, income after tax, long-term growth mean, 10-year price change, mean return on equity, return on invested capital, and 10-year total revenue compound annual growth rate. The data is not ideological. It is the kind of evidence-based analysis investors and asset managers are supposed to demand as a basic fiduciary responsibility, before allocating capital.
The Big Three are not merely asset managers. They are the largest shareholders in virtually every major publicly traded company in America. When they vote, they move markets. When they go silent on climate risk, they give corporate boards permission to look away. When they stop evaluating board diversity, they remove the single most effective mechanism shareholders have to hold boards accountable for the composition of their oversight function.
The downstream consequence falls not on the asset managers — they collect their fees either way — but on the underlying investors: pension funds, endowments, retail shareholders, retirees who cannot diversify away from systemic risk.
This is precisely the problem with surrendering long-term risk analysis to short-term political winds. Climate change does not operate on an election cycle. Extreme weather events, regulatory disruption, stranded assets, and supply chain fragility are not hypothetical future scenarios — they are present tense, priced into insurance markets, and showing up on balance sheets now. Boards that lack the expertise or mandate to oversee these risks are not just bad on governance grounds; they are expensive to own.
As You Sow’s own As You Vote 2026 Proxy Voting Guidelines take a different view of what responsible stewardship looks like. We continue to vote against directors who fail to set Paris-aligned net-zero targets. We oppose board slates lacking gender diversity below 40% female or racial diversity below 40% non-white. We vote against CEO pay that exceeds 100 times median worker pay, because the data shows that extreme pay disparity destabilizes corporate culture and distorts executive incentives away from long-term performance. We support transparent disclosure of political spending, because investors deserve to know whether their capital is financing lobbying that contradicts the company’s own stated strategy and values.
None of this is radical. It is the application of risk analysis, the fundamental job of any investor who intends to hold diversified portfolios over a horizon longer than the next quarterly earnings call.
The Big Three’s retreat will not go unnoticed by the companies they own. Corporate boards are watching, and the signal they are receiving is that the largest shareholders in the room have stood down. That is a signal that responsible investors, those who manage capital across decades, not news cycles, should consider very carefully.
Markets cannot price risk they refuse to measure. And stewards of capital who stop asking the questions do not stop bearing the consequences of the answers.
Even Musk Admirers Should Be Troubled by SpaceX’s Governance
Posted by Lucian Bebchuk (Harvard Law School) and Kobi Kastiel (Tel Aviv University), on Tuesday, June 2, 2026
This is an excerpt from an article posted on the Harvard Law School Forum on Corporate Governance.
SpaceX is planning to go public in mid-June with a governance structure that would free Elon Musk from constraints on his power. Many investors regard Musk’s talents so highly that they might be willing to overlook this lack of constraints. In their view, freeing Musk from constraints would not be a bug but a beneficial feature. However, the loosening of constraints on Musk’s power should be viewed as troublesome even by his most fervent admirers.
(We wrote a post earlier about this subject based on media reports published prior to the release of the SpaceX prospectus. Now that the prospectus has been released, the discussion below updates and further develops our earlier critique.)
To understand the governance problems of SpaceX, it is important to distinguish among different types of investor beliefs about Musk. One set of investors views Musk as having the best ability to maximize the size of the SpaceX pie (that is, the total value that the company will generate to be shared among its shareholders). Such investors might favor governance provisions that would enable Musk to set company strategy with minimal interference from outsiders.
However, there are at least four aspects of the IPO structure that should nonetheless trouble these Musk admirers. First, a belief that Musk knows best how to maximize the pie does not necessarily imply any belief about how Musk would split that pie between public investors and himself.
A major role of corporate rules and governance arrangements in public companies is to constrain the extent to which insiders can split the pie in their favor. The design of the SpaceX IPO — namely, the company’s incorporation in Texas combined with the wide array of provisions in its charter — would give Musk expansive freedom not only to set the company’s strategy as he sees fit but also to allocate the pie as he wishes.
Among other things, Musk would be free (by an explicit provision of the charter) to take for himself any business opportunities presented to SpaceX. He would also be able to arrange related-party transactions that would benefit himself at the expense of public investors, sell himself a large fraction of SpaceX’s assets at a favorable price, and secure giant pay awards. Musk would be able to make such decisions in ways that would confer very large private benefits on him; he would then obtain a substantially disproportionate slice of the pie, leaving public investors with considerably less than their pro rata share.
Second, a strong belief that Musk is by far the best leader for SpaceX now and in the coming years does not imply that he will remain so forever. The pages of business history are full of individuals who were at the very top of their game at one time but later turned subpar and value-destroying.
Accordingly, even the most fervent fans of Musk should worry that Musk’s control is so deeply hard-wired into the SpaceX structure. Can they be certain that Musk, who is 54, will still be a fitting leader at 74 or 84? And if he were to pass away, or become incapacitated or incompetent, control would presumably pass to his heirs or to those managing the trusts through which he holds his superior-voting shares. The prospectus does not disclose who these individuals are, making any assessment of this risk difficult.
Third, even if Musk were to remain the most fitting leader for decades, his incentives would matter. For any given leader, performance could be affected substantially by how closely his interests align with those of public investors. It is therefore important to recognize that the SpaceX structure would enable Musk to cash out any fraction of his equity stake without weakening his lock on control. If Musk were to move to a small-minority controller structure, public investors would be significantly harmed. (For a detailed analysis of the value-reducing costs associated with such a structure, see our article The Perils of Small-Minority Controllers.)
Fourth, no matter how exceptional a leader is believed to be, his performance will likely depend on the time and attention he devotes. At Tesla, despite Musk’s massive pay package, he was not required to limit his outside activities or commit any specific amount of time and attention to the company. Musk took advantage of that freedom by spending substantial time away from Tesla during the months in which he focused on the Twitter acquisition and subsequently on leading DOGE. Importantly, although the IPO design of SpaceX includes an ironclad commitment not to remove Musk from the CEO and Chair positions, Musk would be entirely free to choose how much time and effort to spend elsewhere.
Of course, none of these risks is certain to materialize. But they are all serious risks. Even investors who believe that Musk walks on water should give these risks significant weight when assessing how much they are willing to pay for SpaceX shares.
Preserving Shareholder Rights Protects Workers, Retirees, and the Integrity of American Capital Markets
March 26, 2026
Posted by Elizabeth Steiner, Oregon State Treasurer
Securities and Exchange Commission (SEC) Chair Paul Atkins recently reiterated his preference to loosen corporate accountability standards at a conference hosted by the Council of Institutional Investors. As the fiduciary for a state pension fund, I believe that weakening shareholder engagement creates risks that beneficiaries and state governments cannot afford.
Stories of CEOs raking in multimillion-dollar bonuses while middle-class workers struggle to pay rent or save for retirement have become all too familiar. Those disparities didn’t arise overnight but they have sharpened investor and public scrutiny of corporate governance. That’s why the federal administration’s effort to weaken shareholder rights is so concerning. Shareholders must have a voice in corporate governance given the capital they have invested in American businesses.
As Oregon State Treasurer I am charged with managing a diversified institutional portfolio of more than $148 billion in assets under management, including the Oregon Public Employees Retirement Fund (OPERF), one of the largest public pension funds in the country. Treasury staff invest these assets to achieve strong, risk-adjusted returns for beneficiaries. Public employees’ and retirees’ financial security depends on the long-term health of the assets we help steward.
We take our shareholder stewardship role seriously. During the 2024 proxy voting season Oregon Treasury voted in 5,333 meetings on over 50,305 individual items. The proxy votes we cast and the shareholder rights that underpin them are tools we use every year in service of the workers and retirees whose money is entrusted to us.
In December I urged SEC Chair Paul Atkins to reconsider recent SEC changes that restrict shareholder rights. In a letter co-signed by half a dozen state financial officers, we warned Chair Atkins that changes to the long-standing processes that protect shareholders would “suppress shareholder governance, diminish corporate transparency and accountability, and create risks to profitability and reputation for companies—further undermining the confidence that has attracted global investors to American firms and markets.”
Thanks to the efforts of shareholders, most S&P 500 companies now publish environmental, social, and governance disclosures that investors use to understand long-term risk and strategy. For example, shareholder engagement has codified “say on pay” votes. It has encouraged wider adoption of independent board leadership and strengthened oversight practices improving accountability for long-term investors. It has prompted hundreds of companies to disclose political spending with corporate funds and data on sustainability efforts.
For large institutional investors such as OPERF these votes are about value. Pension funds, asset managers, and other institutional investors representing millions of workers and retirees — including those whose pensions and savings we manage here in Oregon — advance governance improvements because these activities directly affect risk and value over decades.
Investors are owners. CEOs and corporate boards work for owners. We shouldn’t trade the shareholder voice for managerial autonomy. Weakening the proposal process by stripping the SEC of its oversight role, raising burdensome thresholds, or shifting governance to a patchwork of state laws would reduce transparency and leave investors with fewer tools to manage risk.
What’s at stake is safeguarding shareholder democracy by maintaining the SEC’s oversight role. Removing the Commission as referee would tip the balance toward management and leave investors with fewer practical tools to hold companies accountable.
American investors deserve a voice at the table. Let’s make sure it continues to be heard.
Please access the full article here.
Why Would the SEC Silence Shareholders?
By Steven M. Rothstein and Peter Flaherty
Feb. 24, 2026
The original article was posted on WSJ.
Markets work best when businesses are guided by owners.
We head nonprofit organizations concerned with corporate governance and policy and are often on opposite sides of important issues. But we agree on this: When shareholders’ voices are silenced, our capital markets lose accountability. The system becomes more political, not less.
Paul Atkins, chairman of the Securities and Exchange Commission, recently suggested that the shareholder proposal process be shut down. He would do this by deferring to state law to determine whether nonbinding shareholder proposals are a “proper subject” for inclusion in proxy materials—stepping back from the SEC’s longstanding role as referee between companies and proponents. Since it is impractical for activists to sue under state law every time a proposal is filed, Mr. Atkins would essentially hand the decision over to management.
He says he wants to reduce regulatory disclosures, but shareholder proposals aren’t disclosures imposed by regulators. They are communications initiated by shareholders, the company’s owners, directed at fellow shareholders.
Mr. Atkins contradicts his own past statements. In a 2003 address, during an earlier term as a commissioner, he affirmed that “stockholders own the corporation.” That principle hasn’t changed. What has changed is the political climate. Politics rather than the underlying logic of ownership increasingly dictates how certain issues are framed and who has the power to speak.
On issues like diversity, equity and inclusion, shareholders routinely file proposals on opposite sides: Some urge companies to expand DEI initiatives, while others call for their reduction or elimination. Closing the process doesn’t remove politics from markets; it prevents owners from resolving policy disagreements through market mechanisms.
Shareholder proposals aren’t mandates or regulations. They are tightly constrained requests—limited to 500 words—that allow owners to place an issue before fellow shareholders for a vote. Even when proposals receive majority support, companies aren’t legally required to act. What they are required to do is listen.
For decades, shareholder proposals and the SEC’s adjudication process over whether a company may exclude a proponent’s resolution—known as a “no-action relief” decision—have been a feature of U.S. capital markets, supporting governance and long-term risk management. The SEC Division of Corporation Finance has already stopped responding to most no-action requests. This marks a break from that role and—as Caroline Crenshaw, who stepped down as an SEC commissioner last month, warned—threatens shareholder democracy. Critics say shareholder proposals are excessive or misused, but the system includes safeguards that allow companies to exclude proposals that are irrelevant, duplicative, vague or improper.
Markets work best without political interference and without government-imposed silence—when businesses are guided by their owners, not by regulators deciding which voices count.
Mr. Rothstein is chief program officer of Ceres. Mr. Flaherty is chairman of the National Legal and Policy Center.
Elizabeth Warren Writes SEC Chair Atkins on Executive Order
Senator Elizabeth Warren, in her capacity as Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Securities and Exchange Commission (“SEC”) Chairman Atkins, in response to an White House executive order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors” (the “Executive Order”). Senator Warren’s letter argues that the Executive Order seeks to undermine investor influence over the management of public companies by asking the SEC to conduct a “sweeping review aimed at unwinding policies designed to help shareholders influence the actions of corporate directors.” Among other things the letter points to the Executive Order’s direction that the SEC review, and possibly revise or rescind, Rule 14a-8.
Senator Warren concludes by asking the SEC to explain how compliance with the Executive Order will impact institutional investors’ ability to make “timely, informed voting decisions,” as well as the impact that compliance will have on other agency actions.
Link to executive order.
Conservative Investor Group, NLPC challenges recent SEC policies
This article includes excerpts from the original publication. To access the full text, go to National Legal and Policy Center.
Atkins’ SEC: Where Billionaires and Their Woke Corporate Allies Find Protection
by NLPC staff, 27th January, 2026.
With the Trump administration, we were promised a return to property rights and accountability. Instead, the President’s hand-picked SEC Chairman Paul Atkins has tried to mute shareholders with a muzzle professionally fitted by the same law firm that spends its days teaching “woke” CEOs how to ignore the people who actually own their companies.
The most egregious act of this new regime came on Friday. In a blunt update to its Compliance and Disclosure Interpretations, the Moloney-led staff declared they would now “object” to voluntary submissions of Notices of Exempt Solicitations to the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) platform. NESes are informative reports that NLPC has circulated to investors at various companies over the last few years to advocate our positions on proxy voting items like proposals and board nominees.
The SEC’s excuse for this crackdown is as insulting as it is transparent. They claim these filings are used for “generating publicity.” That’s an interesting conclusion, considering no one at the SEC within the cubicles under Moloney’s authority bothered to call us to ask us what our motives are. Since NLPC, along with a few others who we assume were not consulted, were singled out as “frequent filers” of the reports, you’d think someone at the SEC might be curious.
Instead, Moloney the mind-reader and his fellow seers jumped to their own biased conclusions and took action. Atkins and Moloney have decided that if you don’t have $5 million in stock, you don’t have the right to speak on the SEC’s digital public square. They are treating the EDGAR system—a public resource—like an elite country club where the dues are $5 million, and the only topic allowed for discussion is how great corporate management is doing. We are sure CEOs like Bank of America’s Brian Moynihan, Comcast‘s Brian Roberts, and General Motors‘ Mary Barra are ecstatic at this development.
The SEC likes to pretend this is about “saving the taxpayer money” following the government shutdown. This is a flat-out lie. The EDGAR system is automated. Organizations like NLPC pay thousands of dollars a year to outside filing services to format and upload our documents (itself a costly regulatory burden, like having to pay a CPA to do your taxes for what should be a simple process). But it costs the taxpayer literally nothing for us to hit “submit” to EDGAR.
At NLPC, we’ve seen this movie before. We know that when the powerful try to silence you, it’s usually because you’re telling a truth they can’t afford to hear. Atkins and Moloney can lock the gates of EDGAR, but they can’t stop the shareholders from realizing they’ve been sold out by the very people hired to protect them.
Weinberg Center’s Distorted Interpretation of Its Shareholder Proposals Survey Data: A Critical Examination
Sanford Lewis, Director and General Counsel
Khadija Foda, Associate Counsel
Shareholder Rights Group
The Delaware-based Weinberg Center for Corporate Governance recently released a report regarding shareholder proposals based on a survey it administered in late 2025. The survey collected responses regarding participation in, and perspectives on, the shareholder proposal process from just over 500 people, including 168 investors, 156 professional advisors, 52 public company representatives, and 28 corporate directors.
While the survey generated some useful data, unfortunately the report’s interpretive analysis is marred by errors and selective framing, despite being framed as an effort to “center on facts” that can inform shareholder proposal reform discussions. The report’s distortions risk materially misinforming such debates and therefore we believe that the SEC and other policymakers should not rely on the report’s narrative description of its findings when evaluating any changes to the shareholder proposal process. The report’s characterizations have already begun to appear in media coverage and public commentary, creating a risk that its purported “findings” will be repeated without independent examination of the survey instrument, the underlying data, or the methodological limitations that directly affect the validity of its conclusions.
This analysis is intended to make clear the survey report’s methodological weaknesses and embedded biases, enabling policymakers, practitioners, and commentators to assess its claims with appropriate skepticism.
The Survey’s Distorted Analysis of Costs
The survey asked companies for total costs of shareholder proposals over four years. However, the narrative in the report describes these four-year costs as “annual” costs, leading to distorted conclusions about purported “cost asymmetries” between proponents and issuers.
Question 31 of the survey asked company respondents to “[a]pproximate total direct costs your company incurred complying with Rule 14a-8 over the past four proxy seasons.” (emphasis added). However, the survey report characterizes the question and responses as “public company representatives responding to a question about annual direct costs to comply with Rule 14a-8” (emphasis added). The report’s author reiterated this misleading conclusion in a public blog post about the survey, stating “[c]ompanies, by contrast, encounter the system episodically and firm by firm, under heavier procedural and legal constraints, and with more external legal and compliance costs – reported to exceed $500,000 annually for some larger issuers” (emphasis added).
The largest group of company respondents, nine in total, reported total direct costs over four years between $100,000 and $250,000. Seven respondents reported less than $100,000, and six respondents reported between $250,000 and $500,000. Five respondents reported costs above $500,000, and four respondents reported spending more than $1 million.
Framing these amounts as annual costs in the narrative multiplies by four the figures reflected in the data. When divided across four proxy seasons, these figures imply approximate annual costs of $25,000 or less; $25,000–$62,500; $62,500–$125,000; more than $125,000; and more than $200,000, respectively.
Further, the highest reported figures—those exceeding $1 million—are concentrated among a very small number of companies (four) that, because of their scale and impact on the economy, receive the largest number of proposals. Treating those outliers as representative risks conflating proposal volume with the marginal cost of any single proposal. For large-capitalization issuers, expenditures in the hundreds of thousands of dollars are relatively immaterial. For example, for a company with $100 billion in annual profits, $100,000 is an extremely small expense, it represents just 0.0001% of its profits—equivalent to someone earning $100,000 spending ten cents. However, in reality, any reported numbers associated with the purported “cost” of the process often collapse under basic scrutiny and, across a U.S. public market capitalization of roughly $62 trillion, the cost of shareholder democracy is not even a rounding error.
One positive takeaway from the survey is that, even as framed in the report, the figures regarding aggregate costs to companies of shareholder proposals undercut more extreme claims circulating in policy debates, where the cost of a single shareholder proposal is sometimes asserted to be $500,000 or more. *
The survey figures should also be interpreted with caution. The board and management of public companies, who typically oppose most shareholder proposals, have strong incentives to overstate costs. The self-reported aggregate cost estimates related to shareholder proposals may blur the line between proposal-related expenses and routine governance and proxy-season costs. Reviewing shareholder proposals, engaging with investors, and preparing disclosures are routine board and management responsibilities. The wording of the survey and the reported estimates do not clearly separate what is incremental from core responsibilities of board and management.
Third, companies retain substantial discretion over how costly their responses to shareholder proposals become. According to respondents, outside counsel is the primary cost driver. Decisions about whether to seek no-action relief, how aggressively to detail their objections, and how heavily to rely on outside counsel all affect reported costs. Presenting those choices as fixed structural burdens overstates the degree to which costs are imposed by the rule itself.
Survey Results
Q60: The benefits of shareholder-sponsored proposals are:
Minimal – 34.07% (n=77)
Modest – 27.88% (n=63)
Substantial – 25.22% (n=57)
Irreplaceable – 8.41% (n=19)
Other (please specify) – 4.42% (n=10)
Q61: Overall, do the benefits of Rule 14a-8 outweigh its costs?
Yes – 50.89% (n=114)
No – 27.68% (n=62)
Roughly equal – 6.70% (n=15)
Insufficient basis to judge – 10.71% (n=24)
Other (please specify) – 4.02% (n=9)
The survey’s failure to include questions about quantified benefits of shareholder proposals is further evidence of its imbalanced presentation of the costs and benefits of shareholder proposals. While the survey does ask respondents to assess the benefits of shareholder proposals in question 60, it does not ask for an associated dollar figure. Tellingly, in response to question 60, almost 62 percent of respondents selected benefits were in the range of “modest” to “irreplaceable”, whereas 34 percent selected “minimal” benefits as an option.[Q60] Moreover, almost 51 percent of respondents selected “yes” in response to question 61: “[o]verall, do the benefits of Rule 14a-8 outweigh its costs?”[Q61]
In this context, the survey commentary’s focus on the so-called “asymmetrical” costs imposed on companies by the process is telling. No analysis or estimate, symmetrical or otherwise, is provided regarding the value of the benefits.
Survey Question Bias: Framing “Legitimacy” to Exclude Non-Governance Proposals
Survey Results
Q47: Which, if any, of the following topics are outside the legitimate scope of proper shareholder proposals?
Micromanagement of ordinary business matters – 85.59% (n=202)
Not relevant to the specific company – 77.12% (n=182)
Primarily public policy issues – 48.73% (n=115)
Primarily political issues – 59.32% (n=140)
Primarily societal issues – 41.95% (n=99)
Primarily environmental issues – 35.59% (n=84)
Re-submission of topics that did not receive a majority of votes – 35.17% (n=83)
Other (please specify) – 7.63% (n=18)
The survey language and report contained evident bias against the legitimacy of so-called “environmental” or “social” proposals. Survey question 47 asked “[w]hich, if any, of the following topics are outside the legitimate scope of proper shareholder proposals?” and goes on to include the following response options. [Q47]
Q49: Which subject-matter areas are legitimate for shareholder-sponsored proposals?
Board accountability – 87.23% (n=205)
Executive compensation – 79.57% (n=187)
Takeover defenses – 68.09% (n=160)
Corporate risk – 60.00% (n=141)
Financial – 57.45% (n=135)
Strategic – 53.62% (n=126)
Environmental – 47.66% (n=112)
Social responsibility – 42.98% (n=101)
Civil or human rights – 38.30% (n=90)
Portfolio-wide or systemic risk – 37.02% (n=87)
Societal concerns – 29.36% (n=69)
Political matters – 23.40% (n=55)
Other (please specify) – 6.38% (n=15)
None of the above – 3.40% (n=8)
By grouping entire subject areas—such as environmental, societal, or political issues—together with procedural defects like micromanagement or lack of company relevance, this framing implicitly treats those subject matters as a flaw, regardless of context. The modifier of “primarily” may imply to some respondents that these are, perhaps, not addressing material or relevant issues for the company that receives them. Labeling an issue as “primarily societal” functions as a proxy for presumed immateriality or irrelevance, rather than reflecting an assessment grounded in the company’s actual operations, exposures, or governance practices. Notably, the framework does not include a corresponding category such as “primarily governance,” underscoring that these qualifiers are not neutral descriptors.
The companion question 49, which asks “[w]hich subject-matter areas are legitimate for shareholder-sponsored proposals?”, presents governance and non-governance subjects without similar qualifiers.[Q49] Regardless, the framing of response options is again problematic. Topics framed in conventional governance terms, such as “executive compensation” or “board accountability,” are comparatively uncontroversial, whereas labels like “social responsibility” are more contestable. For example, so-called “social” concerns could instead be framed as a governance issue of human capital risk oversight.
Even with this survey bias, survey respondent support for environmental, social, systemic risk, and political proposals remains substantial, often in the 30 to 50 percent range. Despite these results, the survey report concludes “[s]upport declines as topics move further from traditional governance and firm-specific economic oversight”, mischaracterizing both the nature of these proposals and the levels of respondents’ support. This interpretation also overlooks the well-known fact that many investors view environmental and social issues as potentially material investing issues at their companies because of the scope of risk involved to both short-term and long-term value. Investor support for proposals concerning these topics is consistent with empirical findings of positive correlations between ESG factors and corporate financial performance. For long-horizon investors, particularly diversified investors with broadly indexed or benchmark-tracking portfolios, support for such proposals may reflect a portfolio-level risk management strategy to manage systemic threats that can affect returns across the entire market. While the traditional “governance” topics receive the strongest support, characterizing other areas as marginal or illegitimate discounts a significant portion of respondents.
More fundamentally, the report’s reliance on “traditional governance” as a benchmark for legitimacy assumes that governance norms are fixed rather than evolving. Historically, many practices now viewed as core governance principles, such as routine financial disclosures, were once departures from prevailing norms. Movement beyond traditional categories is not inherently suspect but reflects adaptation to changing market conditions, risks, and expectations.
Moreover, the use of the term “political” in this context is itself contestable. Labeling a proposal as “political” does not reflect an objective characteristic of the proposal, but rather a judgment about the acceptability of its underlying premise. Issues are not inherently political or non-political; they may become politicized. Climate change, for example, is no more inherently political than board structure or executive compensation, yet it is routinely described as such because of opposition from actors with vested interests in the status quo.
The data regarding the level of support for environmental and social proposals among investors also reflects the range of investors responding to the survey. From the data reported, 75 of the 500 respondents to the survey have submitted at least one shareholder proposal within the last four years. In contrast, a little more than half of the investors who responded to the survey have not submitted shareholder proposals. It is well known that the largest investment organizations have little need to submit shareholder proposals because they already have access to board and management. The total numbers of respondents treating political, environmental, and social proposals as being “illegitimate” corresponds well with the number of non-proponent investors, public company representatives, and directors.
Consensus on Federal Oversight, Not a Push to the States
The Weinberg Center for Corporate Governance is based in Delaware, and therefore a significant interest of the center relates to potential state policies that might restrict shareholder proposals or enable companies incorporated in the state to limit such proposals through restrictive bylaws. A recently enacted Texas law allows companies incorporated in the state to dramatically increase the threshold shareholdings required to submit a proposal. The current federal thresholds include $25,000 of shares held for a year or $2000 held for a longer minimum holding period of three years. In contrast, the Texas law would allow companies to block shareholder proposals for any shareholder with less than $1 million in holdings in the company. Since there is concern in Delaware about competition between the states for corporate incorporations, the subtext of recent convenings by the center is whether Delaware should compete by following the lead of Texas.
In his blog post about the survey, the author, Lawrence Cunningham, suggests that the survey results show “substantial disagreement over whether responsibility for the shareholder proposal process should remain primarily federal or shift toward states,” and the survey report states “[r]espondents split about whether to retain federal authority over the shareholder proposal process or devolve responsibility to states.”
This outcome was based on survey question 66 and results:
Q66: Preferred long-term approach:
Retain rule federally, even with policy variation over time – 37.44% (n=82)
Retain federally but fix SEC flexibility to limit variation – 32.42% (n=71)
Devolve to states for local definition and administration – 13.24% (n=29)
Permit each company to define its own proposal rules – 11.42% (n= 25)
Other (please specify) – 5.48% (n=12)
The survey results contradict this conclusion. Nearly 70 percent of respondents (153 out of 219) favor retaining Rule 14a-8 at the federal level when asked about their “[p]referred long-term approach”. While respondents disagree about how much discretion the SEC should have (some preferring flexibility, others favoring clearer limits), support for devolving authority to the states or allowing companies to define their own proposal rules remains a clear minority position. Only 13 percent, or 29 respondents, favored devolution to the states, and only 11 percent, or 25 respondents, favored permitting each company to define its own proposal rules.[Q66]
This pattern holds even among public company representatives and directors. While these groups express stronger preferences for predictability and constraint, they largely support continued federal administration rather than institutional relocation (“public company representatives (n=18) express a strong preference for retaining the rule federally but curbing SEC flexibility (66.7%, n=12)” and “[a]mong public company directors (n=17), a plurality favors constrained federal retention (41.2%, n=7)”). The real disagreement reflected in the data is not about who should administer the rule, but about how flexibly it should be applied.
Redefining Ownership Thresholds
The survey failed to adequately contextualize the series of questions regarding appropriate ownership thresholds for filing shareholder proposals, which may have skewed the results toward radically divergent outcomes for shareholder and company respondents.
The survey reports that shareholders tend to favor lower ownership thresholds for eligibility, while company representatives and directors prefer substantially higher dollar- and percentage-based requirements:
“When eligibility is framed in terms of ownership magnitude—whether measured in dollars (n=220) or percentages (n=223)—responses diverge sharply by role. Among shareholders, preferences cluster toward lower thresholds: for dollar-based tests, pluralities favor thresholds in the thousands (35.6%, n=16) or tens of thousands (31.1%, n=14); for percentage-based tests, the largest portions favor less than 1% (38.3%, n=18) or 1–2% ownership (19.1%, n=9).
By contrast, public company representatives and directors gravitate toward higher thresholds. Among company respondents, 41.2% (n=7) favor dollar thresholds of $1 million or more, and 61.1% (n=11) favor percentage thresholds of 1–2% or higher.”
Respondents were not provided the essential baseline of existing Rule 14a-8 eligibility standards, which currently allow shareholders with as little as $2,000 held for three years to submit proposals. Instead, question 52 asked whether proponents should be required to meet ownership thresholds in the thousands, tens of thousands, hundreds of thousands, or $1 million or more—most of which would represent significant increases over the existing thresholds.
Question 53 went further and asked whether eligibility should require ownership of less than 1 percent, 1 percent, 2–3 percent, 3–4 percent, or more than 5 percent of a company’s shares.
These percentage thresholds would effectively eliminate all shareholder proposals. At a typical public company, those levels would translate into tens of millions, or billions, of dollars. For example, acquiring even one percent of Amazon would require an investment well above $20 billion, a level that is presumably beyond the reach of all filers—including state pension funds and other institutional investors. Even the lowest of those options would eliminate nearly every shareholder proponent currently active in the market, curtailing almost all proposals, including those addressing matters the survey report characterizes as “legitimate”, such as proposals on board structure or executive accountability.
An Incomplete Account of Reported Satisfaction with the SEC Process
The report’s narrative distorts the sense of “dissatisfaction” with SEC administration of Rule 14a-8 by characterizing the results of the survey as demonstrating that “strong satisfaction” with the SEC is rare, rather than noting that most respondents find the process somewhat to very fair.
The author’s blog post summarizing the survey contends that “[o]ne of the report’s most striking findings is the breadth of dissatisfaction with the SEC’s administration of Rule 14a-8. Unlike views on the legitimacy of particular proposals, dissatisfaction with the process itself is widespread and consistent across respondents.” The report echoes this conclusion.
However, of the 166 respondents to question 38 “how fair is the SEC’s shareholder-proposal process to all parties?”, 20 selected “very fair”, 38 selected “fair”, 42 selected “somewhat fair”, 24 selected “unfair”, 33 selected “insufficient basis to judge” and 9 selected “other”.* In other words, a majority of respondents to this question, around 60%, said that the SEC’s shareholder proposal process was somewhat to very fair to all parties. In a process in which parties on both sides will often not get the outcome that they seek, some level of dissatisfaction with the fairness of the process on all sides should seem about par.
In fact, a more telling point from the survey is that there was broad agreement that the SEC’s no-action process is preferable to litigation. Respondents consistently cite faster resolution, lower cost, reduced adversarial risk, and the value for predictability of an SEC referee with subject-matter expertise.
Read together, these results support the sense that the system operates in a fundamentally fair manner—no one is entirely happy, but most prefer the system to the available alternatives. No doubt there is avoidable subjectivity and unpredictability, suggesting the potential value of modest reforms aimed at improving clarity, consistency, and administrability.
It should be noted that some of the changes implied by the report’s author, such as restricting the ability to file environmental, social, or other non-governance proposals would not resolve dissatisfaction with process administration. Instead, they would disenfranchise the portion of shareholders who view these issues as material to their investment strategies.
The Report’s Narrow Conceptualization of Shareholder Democracy
The report notes that most shareholder proposals never reach a vote, instead being resolved through withdrawal or the SEC’s no-action process and that when proposals do reach the ballot, they rarely receive majority support. This is characterized as inconsistent with “shareholder democracy.” That framing is misguided and risks reinforcing a broader narrative that marginalizes the shareholder proposal process, obscuring its role as a valuable structural mechanism that can help to surface potentially material issues meriting attention at companies and facilitates engagement between investors and the companies they own.
The reality is that the shareholder proposal process has always been an important equalizer among shareholders, democratizing the ability of blocs of smaller investors to engage with their companies in a manner that otherwise is only available to the largest investors. In practice, Rule 14a–8 is one of the only tools available to most shareholders, outside of the largest, to place items on the corporate agenda without incurring the extremely high costs and risks of proxy contests or litigation. Within this structure, the ability to raise issues, prompt engagement, and secure negotiated changes is itself a core democratic feature of the system, distinct from whether any individual resolution crosses a majority-vote threshold.
High withdrawal rates may indicate that proposals raise issues boards and management take seriously, particularly where there is meaningful investor support or where concerns can be addressed at relatively low cost. As Nell Minow has observed, agreements with proponents are more likely when companies anticipate broader shareholder backing. In that light, negotiated resolutions are not evidence of democratic failure but of the system working effectively to surface investor concerns that boards can effectively address, sometimes without needing to go to a vote.
Further, focusing on majority voting outcomes offers a distorted picture of how the shareholder proposal process actually operates in a heterogeneous investor environment. Shareholders differ widely in size, time horizons, and objectives. A process designed to surface issues, prompt engagement, and influence corporate behavior should not be evaluated by whether proposals win 50 percent plus one of the vote. Implying that a resolution only has an impact if it receives a majority vote is also flawed. Many companies see a vote of 25 percent plus as a significant signal from owners leading to changes in policy, practice, and disclosure.
The conclusion that the proposal process does not function as an example of shareholder democracy reflects an interpretive choice that downplays the important role of engagement, transparency, and negotiated change in producing private ordering through the proposal process.
Conclusion
We raise these points because the Weinberg Center survey has the potential to influence how the shareholder proposal process is evaluated and debated going forward. The Center’s director and author of the survey report, Lawrence Cunningham, has indeed expressed the view that the shareholder proposal process is ripe for reform to, among other things, limit the number of non-governance proposals that he regards as managerial distractions.
If the survey report’s findings are cited in policy discussions or reform efforts without making its striking biases and errors clear policymakers will be misdirected toward restricting important shareholder rights that are not based on “facts” but rather on a survey report’s clear biases.
As with any self-reported, self-selected group of respondents, the data collected is inherently limited in its scope, which is compounded by the lack of disaggregation in reporting of many survey responses by shareholder type, issuer size, or proposal activity. However, the larger foundational issues are flaws in the survey instrument compounded by the highly distorted narrative interpretation of the results.
The Weinberg Center, if it continues to conduct such research, would do well to invest in quality control and internal assessment from the perspective of different stakeholders, or alternatively, use a truly independent, credible and neutral third party that considers the diverse perspectives regarding the shareholder proposal process. Question framing, data collection choices, and interpretive errors and assumptions materially shaped the report’s conclusions. Uncritical reliance on these conclusions could lead to misguided policy outcomes—particularly in a regulatory and policy environment where shareholders’ rights to file proposals are already under attack. Accordingly, the SEC and other actors with meaningful influence over the shareholder proposal process should not rely on this report as a basis for policy or regulatory action.
References:
* See Testimony of Witness Ferrel Keel, Congressional Hearing “Hearing Entitled: Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value” (Sept. 10, 2025), https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=410856 at 2:53:57. In discussing costs of shareholder proposals Witness Keel stated “SEC has said it’s maybe upwards of $150,000. There have been other studies that put that at a top of 600,000” and providing additional testimony about “intangible” costs not captured by those figures.
* In the “other” category, eight respondents specified varied ratings over time and leadership and one respondent specified “practically random”.
Investment Organizations Letter to Chairman Paul Atkins re Rule 14a-8 Jan 14, 2026
January 14, 2026
Dear Chairman Atkins and Mr. Moloney,
Thank you for taking the time to meet with us on December 17, 2025 to discuss ourconcerns regarding recent changes to the Division of Corporation Finance no-actionletter process for shareholder proposals and potential changes by the Commission toRule 14a-8.We appreciate the opportunity for an exchange of perspectives. However, we continue to have concerns.
Specifically, changes to the shareholder proposal process conflict with the Commission's tripartite mission of promoting capital formation, investor protection, and maintenance of fair and orderly capital markets. The ability of shareholders to vote by proxy on proposals made by their fellow shareholders has long been an integral part of the U.S. corporate governance system. We believe that this private ordering processhas helped facilitate capital formation.
In the intervening days since we met, we have seen a number of companies avail themselves of the opportunity to notify proponents of their intent to exclude proposals without the benefit of the Division of Corporation Finance staff’s substantive no-action letter review process. We believe the elimination of the no-action letter process for shareholder proposals will deprive investors of the opportunity to vote on numerous valid proposals. It will also work against the interests of many issuers who are now unable to obtain the Rule 14a-8 guidance that the Division staff have historically provided.
Moreover, the new approach seems inconsistent with Rule 14a-8(k). That provision contemplates that the shareholder proponent may respond in writing to a company’s stated intention to exclude a proposal, the Commission staff will then “consider fully” the proponent’s submission, and the staff will then issue a “response”, presumably that either agrees or disagrees with the company or the proponent.
In addition, we have continuing concerns about the approach outlined by Chairman Atkins to the Division Staff in his October 9th, 2025 speech at the John L. Weinberg Center for Corporate Governance. The right of shareholders under Delaware law to vote on precatory proposals is well-established, long-standing and highly beneficial for both shareholders and issuers. Indeed, a recent study (copy enclosed) concludes that shareholder activism “can positively influence firm value” and can “meaningfully shape long-term firm performance.” See “The Value of Being Heard” at page 40. Moreover, theproposed approach conflicts with the Commission’s longstanding position that “mostproposals that are cast as recommendations or requests that the board of directors takespecified action are proper under state law” as memorialized in Rule 14a-8’s note to paragraph (i)(1).
We urge the Division to engage in a robust effort to collect information from all concerned market participants regarding the shareholder proposal process to guide its consideration in this area. For example, in 2018 the SEC staff held a series of roundtables on the proxy process with investor, issuer and asset manager perspectives. As part of these roundtables, the staff invited interested members of the public to provide written comments that were considered as part of the Commission’s 2019proposed revisions to Rule 14a-8. We believe that a similar information gathering process would be beneficial if further changes to the shareholder proposal process are contemplated.
In the spirit of promoting dialogue and to better inform the Commission about the manybenefits that have resulted from the private ordering process of the shareholder proposal rule, we would like to share the following resources for your consideration:
Profs. Jill Fisch, Sarah Haan, Ann Lipton, and Amelia Miazad, Stockholder Proposals—Law and Policy Considerations, Harvard Law School Forum on Corporate Governance (December 9, 2025)
Letter to Chairman Atkins from various state fiscal officers (December 3, 2025)
Letter to Chairman Atkins from various investor organizations (November 5, 2025)
Letter to Chairman Atkins from the Council of Institutional Investors (December 30, 2025)
Letter to Chairman Atkins from the International Corporate Governance Network (October 12, 2025)
Shareholder Rights Group, Interfaith Center on Corporate Responsibility, and USSIF, Shareholder Proposals: An Essential Right (2025)
Letter to Chairman Atkins from the National Legal and Policy Center (December 18, 2025)
Christina Sautter, Texas Corporate Reforms Silence Retail Shareholders—By Design, Bloomberg (January 6, 2026)
Jasmijn Vandenberk, The Value of Being Heard: Board Responsiveness to Shareholder Proposals (September 11, 2025)
For additional resources on the shareholder proposal process, please see the InvestorRightsForum.com website.
Thank you for taking our concerns into consideration. As representatives of investors who have submitted or voted upon many successful shareholder proposals at the companies in which we invest, we welcome the opportunity to provide you with further information and perspectives as you evaluate the benefits of the shareholder proposal process.
Respectfully submitted,
Brandon Rees, Deputy Director of Corporations and Capital Markets, AFL-CIO
Steven M.Rothstein, Chief Program Officer, Ceres
Josh Zinner, CEO, Interfaith Center on Corporate Responsibility
Sanford Lewis, Director and General Counsel, Shareholder Rights Group
Maria Lettini, CEO, US SIF
Danielle Fugere, President and Chief Counsel, As You Sow
The Value of Being Heard: Board Responsiveness to Shareholder Proposals
While prior research has primarily focused on the short-term market reactions to shareholder proposals and examined their outcomes in isolation, this study adopts a broader perspective by investigating how different levels of proposal responsiveness relate to firm value. We posit that the value effects of shareholder proposals are more pronounced when firms are open to dialogue with shareholders, whether publicly or privately. Using a sample of 9,764 shareholder proposals submitted to S&P 1500 firms between 2005 and 2021, we find that both voted and withdrawn proposals are similarly associated with higher firm value (measured by Tobin's Q) compared to omitted proposals. In the longer term, our results provide modest evidence that the positive effect persists primarily for withdrawn proposals, suggesting that the highest degree of responsiveness yields the greatest value creation. Furthermore, responsiveness appears to be more value-enhancing when proposals are submitted by multiple shareholders or in firms with CEO duality, indicating that both collective shareholder action and CEO power dynamics play a role. These findings imply that regulators, companies and shareholders should recognize that the shareholder proposal process can enhance firm value under certain conditions.
Read full paper
Letter to SEC Chairman Atkins from Council of Institutional Investors
Dear Chairman Atkins:
I am writing on behalf of the Council of Institutional Investors (CII). CII is a nonprofit, nonpartisan association of United States (U.S.) public, corporate and union employee benefit funds, other employee benefit plans, state, and local entities charged with investing public assets, and foundations and endowments with combined assets under management of approximately $5 trillion. Our member funds include major long-term shareowners with a duty to protect the retirement savings of millions of workers and their families, including public pension funds with more than 15 million participants – true and real “Main Street” investors through their pension funds. Our associate members include non-U.S. asset owners with more than $5 trillion in assets, and a range of asset managers with more than $74 trillion in assets under management.¹
We read with interest the Securities and Exchange Commission’s (SEC) “Statement Regarding the Division of Corporation Finance's Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season” (Statement). ² We recognize and appreciate the SEC’s “current resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt staff attention . . . .”³ We, however, are concerned that the Statement could diminish the use of an important shareholder right that for decades has led to improvements in corporate governance that benefit long-term shareholder value.⁴
The Preamble to CII’s membership-approved policies states:
CII believes effective corporate governance and disclosure serve the best long-term interests of companies, shareowners and other stakeholders. Effective corporate governance helps companies achieve strategic goals and manage risks by ensuring that shareowners can hold directors to account as their representatives, and in turn, directors can hold management to account, with each of these constituents contributing to balancing the interests of the company’s varied stakeholders. We consider effective disclosure to be accurate, prompt and useful information on company policies, practices and results. CII advocates for investor protection and robust capital markets, accomplished through a combination of private ordering and market-wide rules and regulations.
CII supports shareowners’ discretion to employ a variety of stewardship tools to improve corporate governance and disclosure at the companies they own. These tools include casting well-informed proxy votes; engaging in dialogue with portfolio companies (including with board members, as appropriate), external managers and policymakers; filing shareholder resolutions; nominating board candidates; litigating meritorious claims; and retaining or dismissing third parties charged with assisting in carrying out these activities.⁵
Consistent with that policy, CII believes that shareholder proposals, which are almost always nonbinding, are an essential and cost-effective tool for expressing the collective voice of a company’s shareowners on particular matters, and have made important contributions to corporate governance over the last 50 years. ⁶ Moreover, because “sound corporate governance is critical to long-term returns — and because poor governance can have a negative result on returns — CII members have a strong interest in seeing that shareholders can submit and vote on shareholder proposals that raise important corporate governance issues.” ⁷
In addition, CII has long publicly supported the view held by most market participants⁸ that the SEC’s Division of Corporation Finance (SEC Staff) is a fair arbiter for implementing the shareholder rule⁹ governing shareholder resolutions.¹⁰ And that “CII members take comfort in the fact that the SEC [S]taff is playing a role in terms of overseeing these proposals.”¹¹ What’s more, we believe corporations also benefit from the SEC Staff reviewing a corporation’s decision to include a shareholder proposal based on enumerated exclusions under Rule 14a-8 and providing an opinion on such exclusion through the no-action process.¹²
As you are aware, the Statement, without the benefit of public comment, ¹³ results in a fundamental change in how the SEC Staff approaches shareholder proposals under Rule 14a-8. ¹⁴As but one example, the Statement indicates that the SEC Staff will accept a company’s representation that it has a “reasonable basis” to exclude a proposal and won’t object to that conclusion. ¹⁵
We note that the Statement could potentially limit the ability of shareowners to file shareholder proposals that would otherwise meet the existing requirements of Rule 14a-8 and improve corporate governance and long-term shareholder value at the companies they own. We believe that good corporate governance practices could lead to special scrutiny of those corporate boards that may elect to respond to the Statement by omitting shareholder proposals from their proxy materials relying on the new process described in the Statement. We also believe that this special scrutiny could lead some institutional investors to holding some companies’ directors or boards accountable through (1) vote no-campaigns, ¹⁶or (2) litigation. ¹⁷ Thus, rather than alleviating pressure on corporate boards, the Statement could result in greater board-level instability through unnecessarily increasing issuers reputational¹⁸ or legal risks. ¹⁹
We also note that the Statement indicated that the new process “applies to the current proxy season (October 1, 2025 – September 30, 2026) as well as no-action requests received before October 1, 2025 to which the Division has not yet responded.”²⁰ We believe, for all the above reasons, the new process should be reconsidered and reversed as soon as practicable, but no later than the end of this proxy season.²¹
Thank you for your consideration of our views on this important matter. We would welcome the opportunity to meet with you and/or your staff to discuss our concerns in more detail and to answer any questions regarding this letter.
Sincerely, Jeffrey P. Mahoney General Counsel
References:
Council of Institutional Investors, Current CII Members, https://www.cii.org/current%20cii%20members.
1 Division of Corporation Finance, Securities and Exchange Commission, Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season (Nov. 17, 2025), https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-roleexchange-act-rule-14a-8-process-current-proxy-season.
2 Id.
3 Letter from Jen Sisson, Chief Executive Officer, International Corporate Governance Network, to Paul S. Atkins, Chairman, Securities and Exchange Commission, et al. (Dec. 10, 2025), https://www.icgn.org/sites/default/files/2025-12/30.%20ICGN%20letter%20to%20SEC%20on%20shareholder%20proposals.pdf.
4 Council of Institutional Investors, Policies on Corporate Governance – Preamble (last updated Mar. 11, 2025), https://www.cii.org/corp_gov_policies#intro.
5 Letter from Kenneth A. Bertsch, Executive Director, Council of Institutional Investors, et al. to Vanessa A. Countryman, Secretary, Securities and Exchange Commission (Jan. 30, 2020), https://www.cii.org/Files/issues_and_advocacy/correspondence/2020/20201030%2014a8%20comment%20letter%20FINAL.pdf.
6 Daniel M. Stone, SEC Suspicion of Shareholder Proposals Hurts Corporate Democracy, Bloomberg Government (Dec. 22, 2025).
7 Brief of the Council of Institutional Investors as Amicus Curiae in Support of Plaintiffs’ Motion for Summary Judgment, ICCR v. SEC, No. 1:21-cv-1620-RBW (D.D.C. Sept. 24, 2021), https://www.cii.org/files/issues_and_advocacy/legal_issues/17_Brief_final.pdf.
8 Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 20091, 48 Fed. Reg. 38218 (Aug. 23, 1983).
9 Shareholder Proposals, 17 C.F.R. § 240.14a-8 (Feb. 18, 2025), https://www.ecfr.gov/current/title-17/chapter-II/part-240/subpart-A/section-240.14a-8.
10 Council of Institutional Investors, Leading Investor Group Defends SEC as Fair Arbiter of Shareholder Proposals as ExxonMobil Goes to Court (Feb. 8, 2024), https://www.cii.org/feb82024-press-release-exxon.
11 Roundtable Discussions Regarding the Federal Proxy Rules and State Corporation Law, Statement of Ann Yerger, Council of Institutional Investors, before the Securities and Exchange Commission (May 7, 2007), https://www.sec.gov/spotlight/proxyprocess/proxy-transcript050707.pdf.
12 Andrew Ramonas & Drew Hutchinson, SEC Prepares Plan to Curb Company Reporting, Investor Proposals, Bloomberg Government (Dec. 29, 2025).
13 Gina Gambetta, Uncharted Territory: How Are Investors Preparing for the 2026 AGM Season?, Responsible Investor (Dec. 17, 2025), https://www.responsible-investor.com/uncharted-territory-how-are-investors-preparing-for-the-2026-agm-season/.
14 ICCR, Statement on Recent Policy Change at the SEC (Nov. 20, 2025), https://www.iccr.org/iccr-statement-on-recent-policy-change-at-the-sec/.
15 SEC to Companies: You’re on Your Own (Sort Of) Under Rule 14a-8, Winston & Strawn Blog (Nov. 24, 2025), https://www.winston.com/en/blogs-and-podcasts/capital-markets-and-securities-law-watch/sec-to-companies-youre-on-your-own-sort-of-under-rule-14a-8.
16 Public Companies in Uncharted Territory Following SEC Announcement It Will Step Back from Responses on Most Shareholder Proposal No-Action Requests, White & Case Alert (Nov. 24, 2025), https://www.whitecase.com/insight-alert/public-companies-uncharted-territory-following-sec-announcement-it-will-step-back.
17 Proposal Free-for-All Sets In as Early Filers Contend with SEC Withdrawal, Agenda, Gallagher (Dec. 15, 2025).
18 Kevin M. LaCroix, Guest Post: Is the SEC Signaling the End of ESG Shareholder Proposals?, D&O Diary (Dec. 16, 2025), https://www.dandodiary.com/2025/12/articles/securities-regulation/guest-post-is-the-sec-signaling-the-end-of-esg-shareholder-proposals/.
19 Leland S. Benton et al., SEC Division of Corporation Finance Announces Major Changes to Rule 14a-8 Shareholder Proposal Process, Morgan Lewis LawFlash (Nov. 19, 2025), https://www.morganlewis.com/pubs/2025/11/sec-division-of-corporation-finance-announces-major-changes-to-rule-14a-8-shareholder-proposal-process.
20 Letter from Elizabeth A. Steiner, Oregon State Treasurer, et al. to Paul S. Atkins, Chairman, Securities and Exchange Commission (Dec. 3, 2025).
21 Letter from Jen Sisson, Chief Executive Officer, International Corporate Governance Network, to Paul S. Atkins, Chairman, Securities and Exchange Commission, et al. (requesting reconsideration of the Statement).
Access the full text here.
Conservative National Legal and Policy Center Writes to SEC Chairman Opposing Recent Changes
This post excerpts a letter written by The National Legal and Policy Center to Chairman Paul Atkins, Securities and Exchange Commission. Access the full text here.
Dear Chairman Atkins:
The National Legal and Policy Center (“NLPC”) writes to express our interest in working with you, the Commission, and staff on any future rulemaking, guidance, or other actions relating to the shareholder proposal process and broader proxy system. As a shareholder advocate that has long used Rule 14a-8 to challenge politicized corporate behavior, we offer a perspective that is both pro-market and skeptical of the “stakeholder” model of corporate governance.
Introduction
The SEC’s mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” To these ends, it has long played a central role in structuring the proxy process and protecting the rights of shareholders as owners. We respectfully submit that preserving a robust, predictable shareholder proposal regime is fully consistent with that mission, and that some of the recent ideas and developments surrounding the proposal process risk undermining it.
We understand that further action regarding shareholder proposals is under consideration by you and the Commission. We welcome discussion of how to reduce abuse and clarify fiduciary duties. However, we are concerned that reducing the SEC staff’s role in the no-action process, encouraging aggressive ownership thresholds, or casting doubt on the legitimacy of non-binding proposals could unintentionally weaken market-based accountability and drive political conflict into more heavy-handed regulatory channels
Shareholder Proposals Are a Capitalist Tool
From a conservative perspective, Rule 14a-8 is best understood not as a vehicle for stakeholder capitalism, but as a property-rights mechanism. It gives owners of a corporation a low-cost way to raise emerging risks and concerns with management, and test those concerns in the marketplace of investor opinion through a shareholder vote. Properly constrained, this is an explicitly capitalist institution. It is voluntary, firm-specific, and mediated by the discipline of capital markets. It is also qualitatively different from political regulation. When a shareholder proposal is adopted or prompts a negotiated change, that outcome arises from private ordering within a particular company, not from a government mandate imposed on the entire economy.
For that reason, shareholder proposals are a constructive alternative to more intrusive political interventions. If owners are denied meaningful tools to discipline management on social, political, or ESG matters that affect the firm, the likely result is more legislative and regulatory activism, not less. We believe conservatives should prefer disputes to be resolved within the framework of corporate law and capital markets rather than by sweeping federal mandates.
****
Conclusion
For these reasons, we respectfully urge the Commission not to weaken the shareholder proposal process or to invite state-law experiments that would, in practical effect, curtail the ability of ordinary investors to raise concerns with management. A clear and stable federal baseline under Rule 14a-8—one that recognizes the legitimacy of precatory proposals, maintains an accessible threshold for smaller but bona fide shareholders, and resists efforts to reclassify ordinary owner oversight as “improper” under state law—is fully consistent with the Commission’s mission to protect investors and promote fair, orderly, and efficient markets. It is also the approach most compatible with a conservative, market-oriented vision of corporate governance, in which disputes over politicized corporate behavior are worked out within firms and among owners, rather than through sweeping political or regulatory mandates.
We would welcome the opportunity to discuss these issues further with you, your fellow commissioners, and your staff, and to provide concrete examples of how the shareholder proposal process has enabled NLPC and similarly situated investors to check managerial excesses, challenge uneconomic ESG initiatives, and refocus companies on their core duty to shareholders. We are confident that, with careful and viewpoint-neutral refinements, the Commission can address concerns about abuse and complexity without sacrificing a vital mechanism of owner oversight.
Sincerely,
Peter Flaherty, Chairman.
ICGN Letter to SEC on Shareholder Proposals
Letter from Jen Sisson, CEO of ICGN on 10th December 2025
Dear Chairman Atkins, and Commissioners Uyeda, Peirce and Crenshaw,
Subject: Comments on the SEC Statement on Rule 14a-8 - No-Action Requests
The International Corporate Governance Network (ICGN) would like to offer its perspective on the SEC Division of Corporation Finance statement, published on November 17, 2025, regarding no-action requests under Rule 14a-8.
Led by investors responsible for assets under management of over US$90 trillion, ICGN promotes high standards of corporate governance globally. Our members – both asset owners and asset managers – have significant exposure to the U.S. market.
We are deeply concerned by the Division of Corporation Finance’s announcement that it will not substantively respond to most Rule 14a-8 no-action requests for the 2025–2026 proxy season. We are concerned that the narrowing of shareholder proposal rights appears part of a broader shift that reduces the avenues through which investors can engage with portfolio companies, compounded by recent changes to interpretations of Section 13D and 13G. Taken together, these developments risk adding tensions between company owners and management, and diminish investor confidence in U.S. corporate governance standards and thereby weaken the appeal of U.S. capital markets globally.
Why shareholder resolutions are an important mechanism
Shareholder resolutions are a vital mechanism for company owners to surface ideas and raise concerns with company management and all shareholders. They have been a key driver of corporate governance improvements in the United States. For example, shareholder resolutions have been successful in promoting annual director elections and establishing simple majority vote requirements. Shareholder proposals helped these good governance practices to become norms, based on a market-led approach, without regulation or standards. Hundreds of constructive dialogues, resulting in increased corporate transparency and improved governance, have been facilitated by shareholder resolutions at minimal cost to issuers and investors.
Each investor has their own approach to decide how to vote on a shareholder resolution. Across the market, resolutions that obtain significant shareholder support tend to be those that are not overly prescriptive for company management and that concern issues investors deem financially material for the success of the company. Shareholders tend to support proposals that can catalyse improvements in governance, reporting, risk management, and long-term strategic thinking. Academic research shows that governance provisions restricting shareholder rights, such as limits on the ability to propose resolutions, are associated with lower firm valuation and weaker stock performance.
Shareholder resolutions can help provide accountability when other mechanisms fail. They also signal investor sentiment to the company. High support levels for a proposal can drive rapid governance improvements, but even modest levels of support can prompt constructive engagement between boards and investors.
Why the SEC No Action Process should be protected
ICGN believes that the ability to file shareholder proposals is a fundamental ownership right.
For decades, issuers and investors have relied on SEC staff guidance, and although purely advisory, it has served as an independent, impartial, trustworthy check that provided procedural clarity and curbed potentially arbitrary exclusion of shareholder proposals by boards of directors.
According to the Statement, a company will be able to obtain an SEC ‘no-objection’ based solely on the company’s unqualified representation that it has a reasonable basis to exclude the proposal based on the provisions of Rule 14a-8, SEC guidance and/or judicial decisions. Without conducting an evaluation of the adequacy of the representation, the SEC’s staff will not object to the company omitting the proposal from the ballot.
By stepping back from the process, the SEC risks significantly diminishing shareholder voice and reducing important checks and balances that exist to protect the long-term interest of the company and its owners. Without the traditional buffer of a staff no-action determination, boards of directors may face increased opposition from investors concerned that relevant shareholder proposals may have been omitted without a valid reason. Furthermore, without SEC staff guidance, companies may be exposed to increased litigation, as proponents of shareholder resolutions that have been omitted by companies may seek judicial clarification in the absence of SEC staff assessment.
We regret to hear that the SEC intends to withdraw from substantive 14a-8 review. Rule 14a- 8 has facilitated a critically important private ordering process - but private ordering only works with regulatory oversight.
A call for the SEC to reconsider its Statement and launch a public consultation
ICGN recognises the resource pressures the Division faces, but the shareholder proposal process plays a vital role in surfacing material risks and enabling constructive investor- company dialogue. We believe that the existing process is well understood and has been supportive of well-functioning markets, and therefore we strongly support the SEC No Action Process being protected.
The Division’s independent review has historically provided transparency, predictability and a neutral reference point for both companies and investors. Removing or significantly narrowing that role risks eroding investor voice, imposing disproportionate burdens on minority and smaller proponents, and increasing costly litigation. As we believe this is not in the interest of efficient and fair capital markets, we respectfully ask that the SEC reconsider its statement.
We are concerned that this shift is occurring through staff announcements and public remarks, rather than through the formal rulemaking process. As highlighted in our 20 October letter, we encourage the Commission to consider returning to public consultation processes on matters that substantively alter policy, following a formal notice-and-comment process under the Administrative Procedure Act. We believe that the absence of public consultations on important announcements which may negatively affect shareholder rights, risks lowering the quality of the highly regarded due process and governance standards in the United States, thereby presenting a risk to the attractiveness of U.S. capital markets and impact the valuation of U.S. companies by investors.
We would welcome the opportunity for further dialogue on these issues. Should you have any question, please contact Severine Neervoort, Global Policy Director at policy@icgn.org.
To learn more, please visit ICGN’s Website.
SEC chair’s remarks on the future of the U.S. shareholder proposal process are “deeply concerning”
Freedom to Invest
U.S. Securities and Exchange Commission Chair Paul Atkins’ recent comments pointing to the end of the shareholder proposal process are “deeply concerning,” as such changes would be an abdication of the agency's investor protection mandate.
The practice of filing shareholder proposals has a long history, gaining prominence in 1942 with the introduction of a version of SEC Rule 14a-8, which investors and companies rely on to ensure a fair and balanced process. Proposals are almost always non-binding, even when they receive a majority supporting vote, meaning companies are not legally required to act on them. Still, they have led to the broad adoption of governance best practices and risk mitigation policies essential for long-term value creation.
Atkins’ recent statements in Delaware indicate that the agency will seek to reform the shareholder proposal process dramatically.
Andrew Collier, Director, Freedom to Invest, said:
“The shareholder proposal process has been a cornerstone of investment stewardship and good governance for decades. The process helps protect the retirement savings of tens of millions of Americans from financial risks that threaten corporate bottom lines. If the SEC intends to break longstanding precedent and deprive shareholders of their traditional input into corporate decision-making, then the agency should solicit public comment. The SEC should not make dramatic shifts in policy without allowing investors to voice their practical and economic concerns as fiduciaries acting in the best interests of clients and beneficiaries”.
Freedom to Invest brings together investors, companies, and other stakeholders to champion the freedom to consider all material financial risks in their decision-making. Learn more here.
Advisory Proxy Resolutions Are More Important Than Ever
Authors- Karl Sandstrom and Bruce Freed
U.S. Supreme Court Justice Anthony Kennedy observed in the Citizens United decision that shareholders of publicly traded companies could employ the procedures of corporate democracy to ensure that shareholder value was not diverted to political causes and candidates that they found objectionable. The proxy process is the principal way shareholders can exercise that power.
Investors have used the process to file resolutions seeking disclosure and board oversight of corporate political spending and have met with remarkable success: Political transparency and accountability are becoming the norm among publicly traded companies.
Today, the right of shareholders to register their opinion about companies’ use of their investment dollars for political causes is at risk. Securities and Exchange Commission Chairman Paul Atkins and the Trump administration are pushing to eliminate proxy resolutions that are advisory, which would be a fatal blow to resolutions calling for political transparency and board oversight.
Proxy access is critical to protecting investors. Investors should not be deprived of the ability to recommend to a company procedures that safeguard their investment and align their interests with the company’s. Investors simply should not be put at risk of having shareholder value used to advance political causes and candidates without disclosure and approval by elected directors.
Broad transparency and accountability by major companies are products of proxy access. Without proxy access, shareholders would not be able to take advantage of Justice Kennedy’s observation and would be left blind to a company’s political engagement and compelled to underwrite speech that they find objectionable.
Transparency and accountability serve as a check on corporate managers using corporate resources to advance their own personal political preferences.
Transparency and board oversight also serve as a safeguard against corruption. Recent experience is replete with examples of corporate officers using corporate resources to corruptly engage in politics. Corruption puts at risk a shareholder’s investment and financial fortune at risk.
The S.E.C.’s proxy access rules have been central to the Center for Political Accountability’s successful collaboration with shareholder advocates in engaging companies to improve disclosure and oversight of their election-related spending. The fact that its resolution has garnered very substantial investor support –a 41.6 percent average vote in the 2025 proxy season — is testament to the value investors place on political engagement that is transparent and accountable.
At the same time proxy access has facilitated dialogue between management and investors, helping to remove suspicion and identifying common concerns. The resolution has been regularly withdrawn at companies following constructive engagement and adoption of responsive policies.
Demonstrating the value of proxy access, this year’s proxy season shareholders exercised their right and rendered a notable five majority votes on resolutions for corporate political disclosure and accountability, at the following companies: Meritage, 57.7%; CBOE Global Markets Inc., 55.8%; Crown Holdings Inc., 52.7%; Spirit AeroSystems, 51.4%; and Teradyne Inc., 51.0%.
These results show that political transparency and accountability are not gadfly concerns but reflections of investor recognition of the risks associated with political spending and the obligation that a company owes to its investors to reveal and justify the company’s use of shareholder value to advance a political cause or candidate.
It is hard to discern how investors benefit from denying them an effective way to register their opinions with a company on issues of high public and personal and financial interest. The Constitution protects us from being compelled to support political speech with which we disagree. It is difficult to take advantage of that right if no avenue is left open to vindicate it. It is that avenue that Justice Kennedy was presuming would be left open. The SEC should take heed of that opinion.
Karl Sandstrom is Senior Advisor to the Center for Political Accountability and a former member of the Federal Election Commission. Bruce Freed is President of the Center for Political Accountability.
Please access the full article here.