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"The shareholder proposal is an essential tool for ensuring that the voices of Main Street investors are heard by portfolio companies. The New York City Retirement Systems' long and proud history of corporate engagement has produced significant social benefits and enhanced long-term shareholder value. I strongly support the plaintiffs and investors taking this important step to overturn the SEC rule change, protect shareholders' ability to hold companies accountable, and create meaningful, systemic change in corporate America."
– Former New York City Comptroller Scott Stringer
The rules governing the shareholder proposal process are clear, fair and efficient. Under SEC Rule 14a-8, shareholder proposals must meet a rigorous series of SEC procedural and substantive tests in order to qualify for the proxy (e.g., Is the proposal relevant to the company? Does it transcend ordinary business matters that are reserved for the board and management?). Legislation that would erase the rights of investors to exercise their voice in encouraging portfolio companies to engage in forward looking management of emerging risks to the bottom line and to their portfolios would have the effect of disrupting a wide array of productive free-market activity and shareholder democracy.
– Sanford Lewis, Director of the Shareholder Rights Group
“The American public has a strong interest in how corporations impact the communities where they operate, how they treat their workers, and how they help or hurt the environment. Investors must be allowed to consider the impacts that companies generate to mitigate risk to our portfolios. Any actions that would constrain investors in this pursuit are antithetical to the public interest and to foundational free market concepts.”
– Rob Fohr, Presbyterian Church U.S.A. and ICCR Baord Chair

In 1942, the U.S. Securities and Exchange Commission (SEC) promulgated its first rule regulating shareholder proposals – Rule 14a8. For more than seven decades, the shareholder proposal process it outlines has allowed both large and small shareholders to alert corporate boards and the investor community to their concerns and to request timely action on emerging, or neglected, issues.

Shareholder proposals and proxy voting are two key elements of shareholder democracy – and together, serve as cost-effective mechanisms for shareholders to monitor and hold corporate management accountable, to communicate collective shareholder views to the board, and to create and protect long-term value. However, over the last 18 months, there has been a marked increase in proposed state legislation that would prohibit state and municipal pension funds from implementing ESG investing strategies or utilizing asset managers that do so.  Numerous “anti-ESG” bills have been introduced in 37 states and a number of these bills have been passed into law, including a law in Texas mandating that state pension funds cut ties with investment firms seen to be “boycotting” fossil fuel companies by addressing climate risk in their portfolios. Yet, if implemented, these “anti-ESG” bills could cause considerable financial damage to state pension funds and their beneficiaries.

Current Initiatives:

Through a combination of legal action, letters to Congress, and joint statements, ICCR and its allies As You Sow, Jim McRitchie, The Investor Rights Forum, CERES, the Council of Institutional Investors, US SIF, and PRI are pushing back against the restrictions to shareholders’ rights and access to the corporate proxy.

Get Started with these Shareholder Rights Resources

Read these resources related to the preservation of rule 14a-8 and shareholder democracy.

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Comment Letter from Investors Supporting 14a-8 Rule Amendments

The undersigned investors, fiduciaries, and organizations are writing in support of the pending rulemaking entitled Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8. While the formal comment period has ended, we want to add to the public docket some important information that emerged after the comment period closed. Our experiences […]