TheCorporateCounsel.net

We’ve been living with Staff Legal Bulletin 14L since November 2021. I always respect the Staff and know they are doing their best to further the agency’s mission, so I imagine there was a positive intention in trying to make the no-action process more efficient. But this one landed like a lead balloon. John blogged at the time that the Bulletin:

rescinds Staff Legal Bulletins 14I, 14J and 14K, and effectively takes a sledgehammer to four years of interpretive guidance on the exclusion of ESG-related shareholder proposals from proxy statements. In doing so, the new SLB may open the door for the inclusion of a wide range of previously excludable ESG proposals.

There was even a dissenting statement from Commissioners Peirce and Roisman – pretty rare at the time, given the fact that these SLBs expressly aren’t approved or disapproved by the Commission. Commissioner Crenshaw has now also issued a statement on SLB 14M – but it’s (mostly) focused on the mid-season timing.

As predicted, things got wild during the 2022 proxy season, which was the first full season when SLB 14L was in effect. A record number of shareholder proposals went to a vote after being included in company proxy statements, and we experienced twists, turns, and “U-turns.” Obviously no-action responses are fact-specific, but companies were not finding many “good facts” when it came to no-action arguments.

Things stabilized a bit in the following years, after proponents experienced low support for prescriptive proposals. But peoples’ strong feelings about now-rescinded SLB 14L remained. SLB 14L prompted compromises & conversations that may not have happened otherwise – and some of those may have been worthwhile. But today, more than a few corporate folks are dancing on its grave.

– Liz Dunshee