New York State Comptroller Thomas DiNapoli is urging public companies to continue accepting shareholder proposals even if federal regulators eliminate the rule requiring their inclusion in proxy materials.
DiNapoli issued the call in response to a Securities and Exchange Commission proposal to rescind Rule 14a-8, which has governed the shareholder-proposal process for more than 80 years.
As trustee of the New York State Common Retirement Fund, DiNapoli said institutional investors use proposals to raise financially material risks with corporate boards.
He argued that the process strengthens board oversight, improves risk management and creates a channel for dialogue between investors and corporate leadership.
DiNapoli criticized the proposed rescission as a retreat from investor protection and said it would allow company management to avoid accountability without eliminating the underlying financial risks.
He said the pension fund would continue defending its rights as a shareholder while asking companies to accept proposals voluntarily and include them in proxy materials.
The SEC proposal has not yet ended the existing rule. DiNapoli's statement did not provide a timetable for federal action or identify individual companies that had agreed to continue the practice voluntarily.
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