Blog: The SEC, Delaware and the High Stakes for Investors on Advisory Shareholder Proposals

Sanford Lewis, Director and General Counsel
Khadija Foda, Associate Counsel
Shareholder Rights Group

SEC Chairman Paul Atkins dropped a bombshell in a keynote speech on October 9, 2025, at the Delaware-based Weinberg Center for Corporate Governance. He endorsed a novel and disruptive legal theory which could eliminate about 98% of shareholder proposals, radically altering the landscape of corporate governance in US public markets.⁠

The theory supported by Atkins posits that advisory (i.e., non-binding) shareholder proposals do not constitute “proper business” for an annual meeting under Delaware law. The vast majority of shareholder proposals submitted to US corporations are written as advisory proposals, meaning that the board retains discretion over whether and how to act on them. The policy suggested by Atkins, taken to its conclusion, could eliminate all such advisory proposals.

A group of investment organizations, including the Shareholder Rights Group, have written a letter to Chairman Atkins expressing our concerns and opposition to this policy and requesting a meeting with him to discuss. The other organizations endorsing the letter include US SIF, the Interfaith Center on Corporate Responsibility, Ceres and the AFL-CIO.

Curtailing shareholders’ ability to raise concerns with the companies they own through the proposal process would strike at the heart of the SEC’s investor-protection mandate and its broader goal of sustaining fair and efficient markets and facilitating capital formation. The public capital system rests on a simple exchange: corporations benefit from investor capital and, in return, investors can express their perspectives on governance and risk. That participatory right has been a defining feature of American corporate practice and should not be discarded or weakened.

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