In a 3-2 vote, the SEC recently agreed to propose stricter voting requirements on shareholder proposals. The proposed rule would raise the threshold of shareholder support required to resubmit proposals previously voted down by shareholders. While SEC Chairman Jay Clayton proclaimed that the changes will help weed out unconstructive shareholder proposals, SEC Commissioner Robert J. Jackson Jr. expressed his concern that the proposals would “shield CEOs from accountability to investors.” Making shareholder proposals is one of the tools, including inspection rights and speaking rights, available to minority investors who seek to enforce corporate governance. Recent shareholder proposals have run the gamut from good corporate governance concerns and social consciousness concerns to introducing appraisal rights.
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