The U.S. Securities and Exchange Commission has sent a proposal tied to shareholder proxy proposal rules for public companies to the White House Office of Management and Budget for review, marking the latest formal step in a possible regulatory rewrite. According to the input, the move is part of SEC Chair Paul Atkins’ push to adjust the relationship between listed companies, their shareholders, and management teams. Under the current framework, eligible shareholders can submit proxy proposals to public companies and seek to place those items on the ballot at shareholder meetings. If the existing rules are ultimately repealed, the channels through which shareholders take part in corporate governance, put forward resolutions, and influence management decisions could change materially. The plan remains under regulatory review, and the final rule text as well as the way it would be implemented have not yet been determined. Bloomberg was cited as the source in the original brief.
The U.S. Securities and Exchange Commission is planning to scrap current rules governing how shareholders of public companies can submit proxy proposals, according to the input. The agency sent the proposal to the White House Office of Management and Budget for review last week, a formal step in advancing the regulatory change.
The move is part of SEC Chair Paul Atkins’ effort to reshape the relationship between shareholders and management at listed companies. Under the current rules, eligible shareholders are allowed to submit proxy proposals to public companies and seek to have those items included in votes at shareholder meetings.
Possible shift in corporate governance
If the rules are ultimately repealed, the way shareholders participate in corporate governance, bring forward proposals, and influence management decisions could change in a significant way.
The change could also alter the balance between activist investors and listed companies, according to the input, which cited Bloomberg.
Review is still underway
For now, the plan remains in the regulatory review stage. The final form of the rule and the details of how it would be implemented have not been determined.
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