Commentary: Proposed SEC rules to restrict proxy access would weaken corporate accountability structures
"Proposed SEC rules to restrict proxy access break faith with investors," 5 Nov 2019
[A] 3-2, party-line vote [on 5 November 2019] by the Securities and Exchange Commission (SEC) regarding proposed changes to its shareholder proposal rule... prompted a fierce rebuke from the investment community...The SEC is proposing to revise the [existing] rule so that shareholders must own [their] stake for a minimum of three years before they can submit a resolution. If they are shareowners for under three years, they must own up to a $25,000 stake in the company in order to file a resolution... [N]ew re-filing thresholds... would more than double [exisiting] thresholds to 5%, 15% and 25% respectively... the rule changes would significantly weaken corporate accountability structures. Raising the ownership threshold threatens to exclude smaller investors.
... “We see this unjustified action by the SEC as part of a broader move across this Administration to realign the regulatory landscape in favor of corporate interests at the expense of the public interest,” [said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility]... Timothy Smith, Director of Shareowner Engagement at Boston Trust Walden [said]... "restricting investors’ use of the shareholder resolution process will only encourage the use of... legal action and withholds on directors and say on pay votes to gain the attention of companies on key governance and environmental issues.”...These provisions would tilt the scales... in favor of corporate management, and have... long been advocated by pro-business trade groups like the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce.