Statement by CII Executive Director Glenn Davis on the SEC's Proposed Rescission of Rule 14a-8

EmitenTrust.com WASHINGTON, Sept. 16, 2026 /PRNewswire/ -- Let this moment settle in: The SEC, created for the purpose of protecting investors in the aftermath of the Crash of 1929, today proposed to rescind a World War II-era rule protecting shareholders' ability to suggest ideas to improve the companies they own.

Yes, shareholder proposals can be a source of embarrassment when they reveal a disconnect between shareholders' and managers' understandings of what matters to long-term performance; and sometimes trigger compromise before a vote takes place. That is a feature of strong capital markets, not a basis for a government agency to swat a fly with a sledgehammer.

The proposed rescission is a solution in search of a problem. Nearly all shareholder proposals are non-binding, which means they merely give corporate directors data to make better-informed decisions. Company costs related to shareholder proposals trace largely to self-imposed expenses such as pursuing legal cover to exclude proposals from ballots or funding campaigns to get out the "against" votes. Most publicly traded companies face zero shareholder proposals in a given year.

Could Rule 14a-8 be improved? Sure. But the SEC proposed rescinding the rule in its entirety, with fingers crossed that state legislators and corporate directors will develop a patchwork of new rules resulting in something better. Spoiler alert: That patchwork will launch a new race to the bottom in state corporate law and result in a dramatic reduction in shareholders who qualify as proponents, notwithstanding smaller investors' history of putting forward many of the most highly supported proposals.

CII will speak publicly and repeatedly to defend Rule 14a-8. We encourage all market participants to do their part in this effort. It's not about whether you agree or disagree with the substance of particular shareholder proposals. It's about preserving broad shareholder expression as a vital part of robust capital markets.

About CII: The Council of Institutional Investors (CII) is a nonprofit, nonpartisan association of U.S. asset owners, primarily pension funds, state and local entities charged with investing public assets, endowments and foundations, with combined global assets that exceed $5.6 trillion. CII's associate members include non-U.S. asset owners with more than $6.6 trillion in global assets, and a range of asset managers with more than $90 trillion in global assets under management. CII is a leading voice for effective corporate governance, strong shareowner rights and sensible financial rules that foster fair, transparent and vibrant capital markets.

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SOURCE Council of Institutional Investors