Letter to the SEC Regarding Rule 14a-8 Proposals

Dear Chairman Atkins:

I am writing on behalf of the Council of Institutional Investors (CII). CII is a nonprofit,
nonpartisan association of United States (U.S.) public, corporate and union employee benefit
funds, other employee benefit plans, state, and local entities charged with investing public assets,
and foundations and endowments with combined assets under management of approximately $5
trillion. Our member funds include major long-term shareowners with a duty to protect the
retirement savings of millions of workers and their families, including public pension funds with
more than 15 million participants – true and real “Main Street” investors through their pension
funds. Our associate members include non-U.S. asset owners with more than $5 trillion in assets,
and a range of asset managers with more than $74 trillion in assets under management.[1]

We read with interest the Securities and Exchange Commission’s (SEC) “Statement Regarding
the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the
Current Proxy Season” (Statement). [2] We recognize and appreciate the SEC’s “current resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt staff attention . . . .”[3] We, however, are concerned that the Statement could diminish the use of an important shareholder right that for decades has led to improvements in corporate governance that benefit long-term shareholder
value.[4]

The Preamble to CII’s membership approved policies states:

CII believes effective corporate governance and disclosure serve the best long-term interests of companies, shareowners and other stakeholders. Effective corporate governance helps companies achieve strategic goals and manage risks by ensuring that shareowners can hold directors to account as their representatives, and in turn, directors can hold management to account, with each of these constituents contributing to balancing the interests of the company’s varied stakeholders. We consider effective disclosure to be accurate, prompt and useful information on company policies, practices and results. CII advocates for investor protection and robust capital markets, accomplished through a combination of private ordering and market-wide rules and regulations.

CII supports shareowners’ discretion to employ a variety of stewardship tools to improve corporate governance and disclosure at the companies they own. These tools include casting well-informed proxy votes; engaging in dialogue with portfolio companies (including with board members, as appropriate), external managers and policymakers; filing shareholder resolutions; nominating board candidates; litigating meritorious claims; and retaining or dismissing third parties charged with assisting in carrying out these activities.[5]

Consistent with that policy, CII believes that shareholder proposals, which are almost always nonbinding, are an essential and cost-effective tool for expressing the collective voice of a company’s shareowners on particular matters, and have made important contributions to corporate governance over the last 50 years.[6] Moreover, because “sound corporate governance is critical to long-term returns — and because poor governance can have a negative result on returns — CII members have a strong interest in seeing that shareholders can submit and vote on shareholder proposals that raise important corporate governance issues.”[7]

In addition, CII has long publicly supported the view held by most market participants[8] that the SEC’s Division of Corporation Finance (SEC Staff) is a fair arbiter for implementing the shareholder rule[9] governing shareholder resolutions.[10] And that “CII members take comfort in the fact that the SEC [S]taff is playing a role in terms of overseeing these proposals.”[11] What’s more, we believe corporations also benefit from the SEC Staff reviewing a corporation’s decision to include a shareholder proposal based on enumerated exclusions under Rule 14a-8 and providing an opinion on such exclusion through the no-action process.[12]

As you are aware, the Statement, without the benefit of public comment,[13] results in a fundamental change in how the SEC Staff approaches shareholder proposals under Rule 14a-8.[14] As but one example, the Statement indicates that the SEC Staff will accept a company’s representation that it has a “reasonable basis” to exclude a proposal and won’t object to that conclusion.[15]

We note that the Statement could potentially limit the ability of shareowners to file shareholder proposals that would otherwise meet the existing requirements of Rule 14a-8 and improve corporate governance and long-term shareholder value at the companies they own. We believe that good corporate governance practices could lead to special scrutiny of those corporate boards that may elect to respond to the Statement by omitting shareholder proposals from their proxy materials relying on the new process described in the Statement. We also believe that this special scrutiny could lead some institutional investors to holding some companies’ directors or boards accountable through (1) vote no-campaigns, [16] or (2) litigation.[17] Thus, rather than alleviating pressure on corporate boards, the Statement could result in greater board-level instability through unnecessarily increasing issuers reputational[18] or legal risks.[19]

We also note that the Statement indicated that the new process “applies to the current proxy season (October 1, 2025 – September 30, 2026) as well as no-action requests received before October 1, 2025 to which the Division has not yet responded.”[20] We believe, for all the above reasons, the new process should be reconsidered and reversed as soon as practicable, but no later than the end of this proxy season.[21]

1 For more information about the Council of Institutional Investors (“CII”) including its board and members, see https://www.cii.org/current%20cii%20members. (go back)

2 Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season, Div. Corp. Fin., SEC (Nov. 17, 2025), https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-roleexchange-act-rule-14a-8-process-current-proxy-season.(go back)

3 Id.(go back)

4 See Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (Dec. 10, 2025), https://www.icgn.org/sites/default/files/2025- 12/30.%20ICGN%20letter%20to%20SEC%20on%20shareholder%20proposals.pdf (“ICGN recognises the resource pressures the Division faces, but the shareholder proposal process plays a vital role in surfacing material risks and enabling constructive investor company dialogue [and] [w]e believe that the existing process is well understood and has been supportive of well-functioning markets, and therefore we strongly support the SEC No Action Process being protected.”); cf. Commissioner Caroline A. Crenshaw, Statement on Division of Corporation Finance’s Announcement on the 14a-8 Process (Nov. 17, 2025), https://www.sec.gov/newsroom/speechesstatements/crenshaw-statement-division-corp-fins-announcement-14a-8-process-111725 (“[T]he Division of Corporation Finance has apparently determined that, as a matter of ‘resource and timing considerations,’ it will not respond to no-action requests for relief under Rule 14a-8. But, this Announcement is more of a giveaway to issuers than an exercise in resource allocation. And, more directly, it is an act of hostility toward shareholders.”).(go back)

5 CII, Policies on Corporate Governance, Preamble (last updated on Mar. 11, 2025) (emphasis added), https://www.cii.org/corp_gov_policies#intro;(go back)

6 See Letter from Kenneth A. Bertsch, Executive Director, Council of Institutional Investors et al. to Vanessa A. Countryman, Secretary, Securities and Exchange Commission 1 (Jan. 30, 2020), https://www.cii.org/Files/issues_and_advocacy/correspondence/2020/20201030%2014a8%20comment%20letter%2 0FINAL.pdf (“Shareowner proposals, which almost always are nonbinding, are an essential tool for expressing the collective voice of a company’s shareowners on particular matters, and have made important contributions to corporate governance over the last 50 years.”); see also Daniel M. Stone, Olshan Frome Wolosky, Insight, SEC Suspicion of Shareholder Proposals Hurts Corporate Democracy, Bloomberg Gov’t (Dec. 22, 2025) (on file with CII) (“Shareholder proposals, . . . are [] a common tool for institutional investors who want to promote good corporate governance . . . [and] . . . are a cost-effective way for stockholders to voice their opinions without launching a costly and complex campaign to replace board members.”); Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (“[Shareholder proposals] have been a key driver of corporate governance improvements in the United States [and] [f]or example, shareholder resolutions have been successful in promoting annual director elections and establishing simple majority vote requirements.”)(go back)

7 Brief of CII as Amicus Curiae in Support of Plaintiffs’ Motion for Summary Judgment at 1-2 (Sept. 24, 2021), ICCR v. SEC, U.S.D.D.C. (No. 1:21-cv-1620-RBW) (emphasis added), https://www.cii.org/files/issues_and_advocacy/legal_issues/17_Brief_final.pdf.(go back)

8 See, e.g., Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 20091, 48 Fed. Reg. 38218, 38221 (Aug. 23, 1983), available at https://business.cch.com/srd/SECDocket(1973-2004)28-798.pdf (“Almost without exception, the commentators opposed the discontinuation of the staff’s involvement in the process, citing problems of costs, confusion, complexity and delay [and, therefore] [n]o change to the staff’s role in the administration of the rule therefore will be effected.”).(go back)

9 See Shareholder proposals, 17 C.F.R. §240.14a-8 (Feb. 18, 2025), available at https://www.ecfr.gov/current/title17/chapter-II/part-240/subpart-A/subject-group-ECFR8c9733e13b955d6/section-240.14a-8.(go back)

10 See, e.g., Press Release, CII, Leading Investor Group Defends SEC as Fair Arbiter of Shareholder Proposals as ExxonMobil Goes to Court (Feb. 8. 2024), https://www.cii.org/feb82024-press-release-exxon.(go back)

11 Roundtable Discussions Regarding the Federal Proxy Rules and State Corporation Law, Before: Chairman & Comm’rs of the SEC (May 7, 2007) (statement of Ann Yerger, Executive Director, CII), available at https://www.sec.gov/spotlight/proxyprocess/proxy-transcript050707.pdf; see Andrew Ramonas & Drew Hutchinson, Deep Dive, SEC Prepares Plan to Curb Company Reporting, Investor Proposals, Bloomberg Gov’t (Dec. 29, 2025) (on file with CII) (“[I]nvestors . . . see the SEC’s longtime practice of refereeing proposals as a civil, organized way to debate both sides of the case for including or excluding resolutions.”).(go back)

12 See, e.g., Gina Gambetta, News & Analysis, Unchartered territory’: How are investors preparing for the 2026 AGM season?, Resp. Inv. (Dec. 17, 2025), https://www.responsible-investor.com/uncharted-territory-how-areinvestors-preparing-for-the-2026-agm-season/#:~:text=News%20&%20Analysis- ,’Uncharted%20territory’:%20How%20are%20investors%20preparing%20for%20the%202026,is%20tipping%20in %20their%20favour. (quoting Tejal Patel, executive director, SOC Investment Group: ‘“Companies have come to rely on the non-action process as a justification to exclude.”).(go back)

13 See Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (“We believe that the absence of public consultations on important announcements which may negatively affect shareholder rights, risks lowering the quality of the highly regarded due process and governance standards in the United States, thereby presenting a risk to the attractiveness of U.S. capital markets and impact the valuation of U.S. companies by investors.”); ICCR Statement on Recent Policy Change at the SEC (Nov. 20, 2025), https://www.iccr.org/iccrstatement-on-recent-policy-change-at-the-sec/ (“SEC leadership appears to be using the excuse of the government shutdown to give companies an open invitation to exclude any or all shareholder proposals from their proxies for the coming proxy season, outside of the notice and comment period typically mandated for such sweeping changes to the rules.”);(go back)

14 See Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season, Division of Corporation Finance, SEC (“the Division has determined to not respond to no-action requests for, and express no views on, companies’ intended reliance on any basis for exclusion of shareholder proposals under Rule 14a-8, other than no-action requests to exclude a proposal under Rule 14a-8(i)(1).”); see also Letter from Elizabeth A. Steiner, Oregon State Treasurer, et al. to The Honorable Paul S. Atkins, Chair, SEC (Dec. 3, 2025), 20251203 State Fiscal Officers Letter to Paul Atkins SEC.pdf – Google Drive (“the Commission’s recent changes to the no-action process, indicating that the staff will not substantially evaluate companies’ legal basis for excluding proposals in the current proxy season, reflect not merely an operational adjustment but a substantive departure from the SEC’s historical role as neutral arbiter of shareholder access”); SEC to Companies: You’re on Your Own (Sort Of) Under Rule 14a-8, Blog, Winston & Strawn (Nov. 24, 2025), https://www.winston.com/en/blogs-and-podcasts/capital-markets-and-securities-law-watch/sec-to-companies-youreon-your-own-sort-of-under-rule-14a-8 (“This guidance fundamentally alters how the Division will address exclusion requests and increases uncertainty for issuers preparing proxy materials.”); Public companies in unchartered territory following SEC announcement it will step back from responses on most shareholder proposal no-action requests, Alert, White & Case (Nov. 24, 2025), https://www.whitecase.com/insight-alert/public-companiesuncharted-territory-following-sec-announcement-it-will-step-back (“In a landmark change, the SEC’s Division of Corporation Finance has announced that it will not provide substantive responses or express views on most no-action requests for shareholder proposal exclusions ‘due to current resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt Staff attention, as well as the extensive body of [SEC] guidance’ in this area that is available to companies and proponents.”).(go back)

15 Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season, Division of Corporation Finance, SEC; see Daniel M. Stone, Olshan Frome Wolosky, Insight, SEC Suspicion of Shareholder Proposals Hurts Corporate Democracy, Bloomberg Gov’t (commenting that the SEC’s change to the shareholder proposal process “effectively gives companies unrestricted power to reject shareholder proposals without SEC review [and] . . . means management’s perspective on corporate policy will be the only one expressed during the upcoming proxy season”); Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (“By stepping back from the process, the SEC risks significantly diminishing shareholder voice and reducing important checks and balances that exist to protect the long-term interest of the company and its owners”); see generally SEC to Companies: You’re on Your Own (Sort Of) Under Rule 14a-8, Blog, Winston & Strawn (describing three changes to the shareholder proposal process as a result of the November 17, 2025, announcement).(go back)

16 See Gina Gambetta, News & Analysis, Unchartered territory’: How are investors preparing for the 2026 AGM season?, Resp. Inv. (“If shareholders are denied the right to vote on proposals, [Michael Garland, New York City’s assistant comptroller and head of corporate governance and responsible investment] . . . expects a shift towards more votes against directors . . . [and] [t]he NYC comptroller’s office will likely oppose the entire board of any company that ‘unilaterally’ omits one of its proposals . . . .”); Proposal Free-for-All Sets In as Early Filers Contend with SEC Withdrawal, Agenda, Gallagher (Dec. 15, 2025) (on file with CII) (“[s]hareholders who feel shut down by companies that chose to omit their proposals will respond with more vote-no campaigns against board members or tap other mechanisms that allow them to exert pressure”); cf. Daniel M. Stone, Olshan Frome Wolosky, Insight, SEC Suspicion of Shareholder Proposals Hurts Corporate Democracy, Bloomberg Gov’t (“[shareholder proposals] are an efficient tool for shareholders to communicate with directors that is much more nuanced than the blunt instrument of directorial elections”).(go back)

17 See Kevin M. LaCroix, Guest Post: Is the SEC Signaling the End of ESG Shareholder Proposals?, D&O Diary (Dec. 16, 2025), https://www.dandodiary.com/2025/12/articles/securities-regulation/guest-post-is-the-sec-signalingthe-end-of-esg-shareholder-proposals/ (“Particularly, in Delaware, where directors’ duties of care and loyalty are often evaluated under the business judgment rule, a board’s rationale and documentation for excluding shareholder proposals could become central to any future litigation alleging breach of fiduciary duty, failure of oversight, or disregard of shareholder rights.”); Proposal Free-for-All Sets In as Early Filers Contend with SEC Withdrawal, Agenda, Gallagher (“The types of proposals shareholders are most likely to oppose being omitted are those that touch on topics of material importance to the company . . . [and] [t]hose are the cases where investors are most likely to take to the courts . . . .”); Leland S, Benton et al., SEC Division of Corporation Finance Announces Major Changes To Rule 14A-8 Shareholder Proposal Process, Lawflash, Morgan Lewis (Nov. 19, 2025), https://www.morganlewis.com/pubs/2025/11/sec-division-of-corporation-finance-announces-major-changes-to-rule14a-8-shareholder-proposal-process (“In any case, there is likely to be an increase in litigation, with questions regarding the scope of applicable state law or other bases for exclusion being settled in the exclusion of their proposals in the courts”); see also Andrew Ramonas & Drew Hutchinson, Deep Dive, SEC Prepares Plan to Curb Company Reporting, Investor Proposals, Bloomberg Gov’t (“Lawsuits, campaigns against board directors, and souring investor relations are a few possible outcomes companies face if they unilaterally exclude more resolutions . shareholders said.”).(go back)

18 See Proposal Free-for-All Sets In as Early Filers Contend with SEC Withdrawal, Agenda, Gallagher (quoting Sheila Ennis, head of investor relations at H/Advisors Abernathy: ‘“It doesn’t matter whether it’s right or wrong’ to omit any given proposal, . . . ‘[y]ou have to take seriously the headline risk that could befall you if you make yourself an easy target for proponents’”); Letter from Elizabeth A. Steiner, Oregon State Treasurer, et al. to The Honorable Paul S. Atkins, Chair, SEC (“Rather than alleviating pressure on corporate boards, these changes risk fueling board-level instability and reputational risk if companies appear to block investor voice.”).(go back)

19 See Kevin M. LaCroix, Guest Post: Is the SEC Signaling the End of ESG Shareholder Proposals?, D&O Diary (Dec. 16, 2025), https://www.dandodiary.com/2025/12/articles/securities-regulation/guest-post-is-the-sec-signalingthe-end-of-esg-shareholder-proposals/ (“a shift permitting broader exclusion may not necessarily translate to a simple reduction in risk; rather, the profile of that risk would change to heightened scrutiny of the board’s exclusion process”); Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (“Removing or significantly narrowing that role risks eroding investor voice, imposing disproportionate burdens on minority and smaller proponents, and increasing costly litigation.”); Leland S, Benton et al., SEC Division of Corporation Finance Announces Major Changes To Rule 14A-8 Shareholder Proposal Process, Lawflash, Morgan Lewis (“Corp Fin’s new policy drastically reduces the Staff’s role in resolving disputes over the exclusion of shareholder proposals and places more responsibility (and, correspondingly, litigation risk) on companies and their counsel to assess whether they have a defensible basis for excluding proposals.”); see also SEC to Companies: You’re on Your Own (Sort Of) Under Rule 14a-8, Blog, Winston & Strawn (“Companies must swiftly adapt to this new regulatory landscape to mitigate potential litigation, reputational harm, and activist campaigns.”).(go back)

20 Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season, Division of Corporation Finance, SEC.(go back)

21 See, e.g., Letter from Jen Sisson, Chief Executive Officer, ICGN to Paul Atkins, Chairman, SEC et al. (“As we believe this is not in the interest of efficient and fair capital markets, we respectfully ask that the SEC reconsider its statement.”). (go back)