SEC's new guidance on shareholder activism and ESG
Updated: Apr 29
In November, the SEC reversed several mechanisms that companies use to shoot down shareholder proposals and specified shareholders are now allowed to press their employers on ESG issues. What does this mean for investors?
The decision of the SEC is a big deal because it allows shareholders to press companies on ESG issues. This means that these important topics will now get more attention from investors and Wall Street alike!
So far the SEC has permitted a shareholder proposal directed at Apple which highlighted an area of concern: how companies are handling sexual-harassment complaints. These complaints are often pushed into closed door sessions so that employees don't have a chance to air their grievances publicly.
Another shareholder proposal is directed at Disney and it comes from the National Center for Public Policy Research. The conservative think tank argues that the company’s antiracism training discriminates against white employees. The SEC is allowing this proposal to be included in Disney's proxy statement.
This year’s proxy season, the time between mid-April and mid-June when many public companies hold their annual meetings, is set to be an interesting one. With environmental, social, and governance issues gaining more prominence than ever before - shareholder scrutiny will become even greater!
For more information, see Wall Street Journal