TheCorporateCounsel.net

As Liz reported yesterday over on the Proxy Season Blog, the Business Roundtable has published a white paper that proposes:

– Restoring Rule 14a-8 to its original intent by precluding shareholder proposals that advance broad ideological agendas.

– Preventing the abuse of proxy rules through strengthened submission and resubmission thresholds for shareholder proposals.

– Reining in the outsized influence of proxy advisory firms by prohibiting “robovoting” (the practice of mechanically voting in line with proxy advisor recommendations), requiring vote recommendations to be supported by economic analysis and addressing conflicts of interest.

– Affirming the SEC’s authority to regulate proxy advisory firms and enforce standards for transparency and accountability.

Liz notes that, on the topic of shareholder proposals, the white paper presents the Business Roundtable’s view that the SEC has assumed a “quasi-judicial” role through an “inconsistent, opaque and arbitrary” no-action process, and calls on Congress “to enact legislation precluding the inclusion of shareholder proposals relating to environmental, social and political issues in a company’s proxy statement.” If Congress does not take such action, it is suggested that the SEC should amend Rule 14a-8 to add an exclusion for proposals relating to environmental, social and political issues and update Commission guidance to eliminate: (i) the significant social policy exception under Rule 14a-8(i)(7); and (ii) the broad social or ethical concern exception under Rule14a-8(i)(5).

– Dave Lynn