The Weinberg Center for Corporate Governance at the University of Delaware recently released findings from its large-scale survey examining the shareholder proposal process under SEC Rule 14a-8. The announcement of the report notes:

Conducted during renewed discussion about possible changes to the SEC’s role, the survey offers a descriptive account of how the system operates in practice, drawing on responses from 519 participants, including shareholders, public-company representatives, directors, and professional advisors. Rather than advancing policy prescriptions, the survey provides an empirical foundation for understanding where participants’ experiences converge, where they diverge, and why disagreements persist.

Key Takeaways

– Divergent understandings of purpose: Respondents describe the process in markedly different terms, reflecting contrasting institutional expectations.

– Shared governance principles: Despite sharp divisions over environmental and social proposals, respondents broadly agree on governance-focused proposals and on principles such as materiality, relevance, feasibility, and limits on micromanagement.

– Widespread dissatisfaction with SEC administration: Participants report frustration with unpredictability and overall user experience.

The survey was designed to capture the full range of perspectives, including extensive write-in responses, all reproduced verbatim with the report, to ensure transparency and neutrality.

On the very timely topic of the SEC’s role in the shareholder proposal process, the survey observes:

Respondents split about whether to retain federal authority over the shareholder proposal process or devolve responsibility to states, but consensus pervades understanding of what state law and policy would need to address. Essentials include statutory clarity, supporting state systems, promoting private ordering while protecting shareholder voice, apolitical stability, and balancing interstate competition with coordination.

So far this season, no company has submitted a no-action request to the SEC seeking to exclude a precatory shareholder proposal based on the argument that it is improper under state law pursuant to Rule 14a-8(i)(1), based on the information posted on the SEC’s website.

– Dave Lynn