SEC to stop judging whether companies can exclude shareholder proposals

SEC shareholder proposals corporate governance investor activism no-action letters

The U.S. Securities and Exchange Commission (SEC) has made permanent its decision to stop judging whether companies can exclude shareholder resolutions from annual meeting votes. This move extends a freeze on 'no-action' letters, which were previously used to determine if the agency would take action against executives who sought to skip votes on specific proposals.

The SEC stated that this policy change will allow its Division of Corporation Finance to redirect resources toward a broader review of corporate filings. The agency noted it has already established an extensive body of guidance regarding the exclusion of shareholder proposals.

Investor activists have expressed concern that the decision diminishes their influence, particularly on issues such as workforce diversity and carbon emissions. Critics argue that without the SEC acting as an 'informal referee,' investors may be forced to pursue litigation to ensure resolutions are included in proxy statements.

Entities

Freshfields · Interfaith Center on Corporate Responsibility · Paul Atkins · U.S. Securities and Exchange Commission

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] As of June 15, 66% of known shareholder proposals were placed on proxies, up from 59% the previous year. kelo.com · wixx.com · wkzo.com
[● 3 SOURCES] The SEC will no longer issue 'no-action' letters to approve corporate requests to skip votes on shareholder proposals. kelo.com · wixx.com · wkzo.com
[● 3 SOURCES] Investor activists express concern that the policy change diminishes their influence and may force them to pursue legal action. kelo.com · wixx.com · wkzo.com
[● 3 SOURCES] The move is intended to help the SEC’s Division of Corporation Finance focus resources on a broader review of filings. kelo.com · wixx.com · wkzo.com