A joint Senate resolution to undo a controversial SEC rule change making it harder for investors to submit shareholder proposals was introduced Friday.
In September, the Securities and Exchange Commission voted to raise the requirements for investors that wish to submit a shareholder proposal and approved higher thresholds for resubmitting shareholder proposals in subsequent years.
At the time, then-Chairman Jay Clayton said the changes would modernize the commission's shareholder proposal regulations to the benefit of all shareholders and public companies, but Commissioner Allison Herren Lee, now the acting chairwoman, said that the rule changes coupled with new rules for proxy advisory firms, "collectively put a thumb on the scale for management in the balance of power between companies and their owners."
Senate Banking Committee Chairman Sherrod Brown, D-Ohio, introduced Senate Joint Resolution 16 that would use the Congressional Review Act to reverse the SEC rules known as Rule 14a-8. Invoking the CRA will require a majority vote in both the House and the Senate.
Lisa Woll, CEO of US SIF: The Forum for Sustainable and Responsible Investment, welcomed the resolution in a statement: "If left unchanged, the rule, when fully implemented, will disenfranchise investors and shift power to company CEOs and management.
"The votes on shareholder proposals provide more precise information about shareholders' views of the given topic. In our view, the commission should not be in the business of reducing these lines of communication. Such reductions will likely be unavoidable if the rule is not reversed," Ms. Woll said.