SEC proposes rescinding rule on shareholder proposals

The Securities and Exchange Commission has proposed rescinding Rule 14a-8, which governs shareholder proposals, arguing that it exceeds the agency’s authority and intrudes on state corporate law. If adopted, states and companies’ governing documents would have greater control over how shareholder proposals are handled, a change Chairman Paul Atkins has supported amid criticism that proxy campaigns have been used to advance climate and social-policy agendas. The SEC also proposed changes to proxy solicitation rules that would give companies more flexibility, increase shareholder control over certain voting matters, and modernize disclosure and delivery requirements, including shortening the broker search period from 20 business days to five. The proposals remain subject to public comment and could significantly alter corporate governance and shareholder activism.