Any effort by the U.S. Securities and Exchange Commission (SEC) to limit the rights of investors to participate in the shareholder resolution process would galvanise the same kind of widespread investor opposition that defeated a similar proposal in 1997-1998, according to experts from the Social Investment Forum (SIF) and Interfaith Center on Corporate Responsibility (ICCR).
One of the major concerns is the possibility of new limits on so-called “advisory” resolutions, which have accounted for about 95 percent of shareholder resolutions over the last 35 years.
“The right of investors to file resolutions and seek investor support when necessary should not be diminished in any way,” says SIF Chair and Senior Vice-President of Walden Asset Management Tim Smith. “We are serving notice to the SEC and others today that we will strongly oppose any move to take away shareholder rights to move advisory resolutions.”
SIF CEO Lisa Woll adds: “We have urged the SEC to drop this concept before it gets to the proposal stage. It is the genius of the SEC’s proxy system that shareholders of every size can participate in the marketplace of ideas by filing resolutions, and that the principal test of those ideas is their ability to garner support of fellow shareowners.”