My organization files shareholder resolutions. Yet I support the recently proposed Securities and Exchange Commission (SEC) rules that will limit shareholder resolutions. The SEC’s current shareholder resolution process favors left-wing proposals that increase consumer costs, destroy shareholder value, and give undue leverage to asset managers and proxy advisors who have become political activists. Limiting or eliminating shareholder proposals benefits investors and consumers and aligns with our federal system, which gives states primary control over corporate governance.

Shareholder resolutions are commonly used by left-wing activists to pressure companies to implement DEI policies or make costly changes to their business to meet climate goals. The resolutions are technically requests. But proxy advisors and asset managers frequently vote against company directors if companies do not implement resolutions that receive a significant amount of support, despite their negative impact on shareholder returns and prices for consumers. This effectively makes the resolutions binding. Currently, the SEC sets the rules for shareholder resolutions. Democratic administrations rewrote these rules to permit resolutions on hot-button “significant social policy” topics like DEI and climate change.