The SEC’s decision to withdraw from its role as Rule 14a-8 referee has generated bipartisan howls from leading participants in the shareholder proposal industry about “silencing shareholder voices.” However, early returns suggest that companies are taking a cautious approach about telling their shareholders to “shut up.” Check out this excerpt from a recent Bryan Cave blog discussing ISS’s Proxy Season Preview (which Liz recently blogged about over on our “Proxy Season Blog”):

As discussed in our November 19, 2025 post, in most cases, companies can now decide themselves whether to exclude shareholder proposals – subject only to documenting a reasonable basis for exclusion.

However, according to ISS, a smaller percentage of companies (22%) are omitting proposals so far this year compared to 2025 (28%). This suggests that companies “may be reassessing the strategic value of omissions and the risks associated with it.”

For example, as noted in our post, companies may face litigation risks from proponents. Last month, three lawsuits were filed, with two of the companies quickly settling and agreeing to include the proposals. In one case, the complaint alleged inadequate disclosure in the company’s notice filing with the SEC.

Glass Lewis noticed the same thing in its review of how companies are handling shareholder proposals so far:

While the SEC’s change can be interpreted as giving boards free rein to set their meeting agendas, some companies appear to be taking a more cautious approach. A number of companies that filed exclusion notices prior to the November 17 announcement (Analog Devices, Apple, Costco, Starbucks and Tyson Foods) did not receive any response from the SEC, did not withdraw or refile their notices, and ultimately allowed these shareholder proposals go to a vote.

Like ISS, Glass Lewis also highlights the changing risk environment that companies face in the absence of the no-action process as likely contributing to this cautious approach.  Participants in the shareholder proposal industry have proven willing to litigate, and institutional investors and proxy advisors have indicated that there will be consequences to boards that exclude proposals without solid justification.

– John Jenkins