New York State Comptroller Thomas DiNapoli is opposing a Securities and Exchange Commission proposal to rescind the federal rule that allows eligible investors to place shareholder proposals in corporate proxy materials.
DiNapoli, who serves as trustee of the New York State Common Retirement Fund, said Thursday that Rule 14a-8 gives institutional investors a way to raise financially significant risks directly with corporate boards.
The SEC proposal would end a process that DiNapoli said has been part of American corporate governance for more than 80 years. He argued that the rule has helped strengthen board oversight, improve risk management and support dialogue between investors and companies.
DiNapoli said rescinding the rule would reduce corporate accountability and weaken the pension fund's rights as a shareholder. The Common Retirement Fund invests on behalf of New York's state and local retirement system.
He also called on publicly traded U.S. companies to continue accepting shareholder proposals and including them in proxy materials even if the SEC moves forward with the change.
DiNapoli said the risks raised through shareholder proposals would remain even if the federal process used to bring them before boards were eliminated. His statement did not provide a timetable for the SEC proposal or describe the next steps in the federal rulemaking process.
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