By Ross Kerber
(Reuters) -The top U.S. securities regulator revised guidance on Wednesday to make it easier for companies to avoid bringing shareholder resolutions to a vote at annual meetings, undoing a 2021 change and a potential blow to activist campaigns on social, environmental and governance issues.
Among other things, the SEC said it will now consider certain company requests to leave resolutions off proxy statements on a case-by-case basis rather than focusing on whether a proposal raises a broad social issue, as it had under previous policy, according to a legal bulletin on the agency’s website.
Shareholder resolutions have become the centerpiece of many corporate meetings in recent years as investors took new interest in matters like climate change or workforce diversity. But the trend has prompted pushback from stock issuers and some Republican politicians who see them as distractions.
Critics include Mark Uyeda, named acting chair of the U.S. Securities and Exchange Commission last month by President Donald Trump.
Companies routinely seek SEC permission to bar specific resolutions on the basis of agency criteria such as whether they relate to operational issues that belong in the purview of management.
Another part of the new guidance gives companies more room to claim that proposals micromanage their operations and skip votes.
Sanford Lewis, an attorney who represents shareholder activists, said the new wording “gives companies enormous latitude to claim that a proposal micromanages if the proposal asks the company for specifics.”
A spokesperson for the agency declined to comment on the guidance.
Caroline Crenshaw, the sole current Democratic member of the SEC, criticized the timing of the new guidance as disruptive, in part because the SEC has already ruled on some proposal submissions for the spring shareholder meeting season.
The new guidance “comes as no surprise given that the shareholder proposal process has become the target of politicized messaging and a preferred punching bag of those who wish to diminish corporate democracy,” Crenshaw said in a statement.
(Reporting by Ross Kerber; Editing by Mark Porter and Cynthia Osterman)
