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New investment rules would limit shareholder advocacy attempts to influence company stance on GMOs, climate change

| | November 7, 2019

The U.S. Security and Exchange Commission formally proposed a new rule on [November 6] that could make it harder for shareholders to submit proposals dealing with social issues like executive pay and climate change.

The proposed rule …. would hike re-submission thresholds for shareholder resolutions, or recommendations that ordinary retail investors can make to a company’s board.

Investors who own at least 1% or $2,000 worth of a company’s stock can file shareholder resolutions and add their input to various board decisions. The SEC proposed changing that eligibility requirement.

According to shareholder advocacy groups …. higher re-submission thresholds can help quash awareness around social issues that take time to prove financially material to the company’s operations.

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In 2013, for example, As You Sow filed a shareholder proposal that would require Abbott Laboratories to stop using genetically modified crops until long-term studies show that GMOs are not harmful to humans. While only 3.2% of Abbott shareholders supported the resolution, As You Sow filed similar resolutions until 2015, where 6% of Abbott shareholders supported it. Despite the thin support, Abbott Labs eventually released a non-GMO baby formula to meet consumer demand.

Read full, original article: Shareholders would have tougher time submitting resolutions under SEC’s proposed rule

The GLP aggregated and excerpted this article to reflect the diversity of news, opinion, and analysis. Click the link above to read the full, original article.
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