The SEC has received nearly 20,000 comments from investment firms, pension funds, organizations, and individuals–representing over $1 trillion in assets under management–in opposition to its proposed rule changes. Four leaders of the shareholder rights’ movement help explain the impact of the new rules.
PROPOSED RULES THREATEN TO OBSTRUCT PATHWAY TO IMPROVED ESG DISCLOSURE AND PERFORMANCE
SANFORD LEWIS
Director, Shareholder Rights Group
The Shareholder Rights Group includes leading shareholder proponents working to defend SEC Rule 14a-8. After the SEC issued its proposed rule on November 5, 2019, we examined how it would have affected recent proposals and engagements at companies with high profile corporate responsibility challenges: Boeing, Wells Fargo and Chevron.
THE ATTACK ON SHAREHOLDER RIGHTS
KEN BERTSCH
Executive Director, Council of Institutional Investors
The currently pending SEC proposals to regulate proxy advisory firms and to limit shareholder proposals together represent the biggest attack on shareholder rights by the SEC since it was created in 1934.
The Council of Institutional Investors (CII) believes Rule 14a-8 is working well. Shareholder proposals make up less than 2 percent of voting items facing investors at U.S. companies, and the number of proposals has, if anything, declined in recent years. The fact that proposals get higher voting support than in earlier decades shows the strength of the process, rather than it being a problem as management lobbyists seem to believe.
SHAREHOLDER PROPOSALS PROVIDE CRUCIAL EARLY WARNING SYSTEM FOR IDENTIFYING RISK
JOSH ZINNER
CEO, Interfaith Center on Corporate Responsibility
For decades, the shareholder proposal process has served as a cost-effective way for corporate management and boards to gain a better understanding of shareholder concerns, particularly those of longer-term shareholders concerned about the sustainability of the companies they own.
SEC PUTTING CORPORATE INTEREST OVER SHAREHOLDERS AND CONSUMERS
FRAN TEPLITZ
Executive Co-Director, Green America
The general public has grown steadily more aware of how corporations affect people and the planet. More companies now offer “green” products and services, make their supply chains more transparent, and have sustainability departments, but there is an acute need for still greater corporate oversight.