Justice, Peace and Sustainability Weekly Announcement
Jan. 23, 2020
Don’t Let the SEC Silence Shareholder Voices
In November, the Securities and Exchange Commission (SEC) proposed rule changes that would limit the ability of small investors to file corporate shareholder resolutions. Resolutions are one of the strongest, most effective ways to improve companies’ environmental, social and governance practices. The IHM Sisters and other faith-based investors have participated in this type of shareholder engagement through the Interfaith Center for Corporate Responsibility (ICCR) for nearly 50 years.
Presently, the SEC requires shareholders to hold $2,000 worth of stock for at least one year before they can file a resolution, an amount that ensures that small investors can place issues significant to the company before fellow shareholders. The SEC is proposing to revise the rule so that shareholders must own this stock for a minimum of three years before they can submit a resolution. Under the proposal, shareowners who own stock for one or two years must own $25,000 and $15,000 worth of shares respectively in order to file a resolution.
Raising the ownership threshold threatens to exclude smaller investors, who have made valuable contributions to the process over the years by raising numerous environmental, social, and governance issues (such as climate change, human trafficking and racial and gender diversity on corporate boards) that have eventually received substantial votes, pushing companies to address these issues.
Please note: A personalized comment is more effective than a form comment. Just click on the “More” button on the action page and copy and paste the template letter into the “Why Is This Important to You” box to the right. Then customize the template letter with some specifics before you click “Send.”
In November, Bloomberg published an article titled “Silencing the Nun: SEC Aims to Curb Small Investors’ Activism.” The article highlights how Catholic women religious have effectively engaged in shareholder advocacy.