SfC Statement on SEC Decision Regarding Shareholder Proposal Exclusion

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Shareholders for Change (SfC), a European network of institutional investors committed to responsible and active ownership, expresses deep concern regarding the US Securities and Exchange Commission’s recent policy decision to allow companies to exclude shareholder proposals from proxy materials without obtaining the regulator’s prior substantive review or approval, in most cases.

This shift marks a significant departure from long-standing SEC practice. The Commission’s decision to no longer express a view on exclusion requests not only weakens the procedural safeguards that have historically protected investor rights, but also risks undermining confidence in the fairness and transparency of the US corporate governance system.

At a time when global capital markets are increasingly interconnected, rolling back shareholder rights in one of the world’s most influential financial jurisdictions sends a troubling signal.

The decision follows earlier measures that collectively restrict the ability of investors to engage companies on long-term sustainability risks. Such measures threaten to diminish accountability, hinder meaningful dialogue between investors and companies, and weaken mechanisms for identifying material risks that affect corporate value creation and the broader financial system.

SfC stands in solidarity with international governance bodies and shareholder advocacy groups, such as the Interfaith Center on Corporate Responsibility (ICCR), that have warned that limiting shareholder participation could ultimately impair market integrity and the reputation of US capital markets.

We urge the SEC to reconsider its approach and to restore a balanced, transparent and reliable process that protects the rights of shareholders—large and small—to raise issues of financial and societal importance. Shareholder engagement is a cornerstone of healthy, well-governed markets. Diluting this mechanism ultimately serves neither companies, investors, nor the public interest.

SfC – Shareholders for Change