SEC proposes ending federal oversight of shareholder proposals

On September 16, Reuters reported that the US Securities and Exchange Commission proposed ending its oversight of corporate shareholder proposals on subjects including climate change and executive compensation, with Chairman Paul Atkins arguing that the matter belongs under state law. The proposal is subject to public comment and further Commission action, so it does not yet change the treatment of proposals in the current proxy process. If adopted, it could shift disputes over exclusion, board accountability and investor access toward incorporation law and state courts while increasing variation among corporate domiciles. Public companies, investors and advisers should respond to the proposal on its actual procedural scope and begin mapping how relevant state law would handle issues now mediated through the SEC.