Friends Fiduciary encourages PA senators to repeal SEC changes to rule 14a-8 that limit accountability

May 19, 2021

Friends Fiduciary has sent letters to Pennsylvania Senators Pat Toomey and Bob Casey voicing support for the repeal of the restrictive changes to the Securities and Exchange Commission’s rule on the shareholder resolution filing process, commonly called Section 14a-8. The rule changes, currently scheduled to go into effect for the 2022 proxy season, would dramatically raise both the thresholds for filing resolutions and the percentage of votes needed to re-submit a resolution, along with other significant limitations on filing. FFC, with other members of the Interfaith Coalition on Corporate Responsibility, supports the repeal of unnecessary changes adopted last year as which will undermine the ability of shareholders to hold companies accountable through the shareholder resolution process.

The shareholder engagement process has served as an invaluable tool to both shareholders and companies to bring to light emerging risks for the benefit of management and shareholders. Examples include positive changes widely adopted by companies such as annual director elections, proxy access, political spending disclosure, reporting on climate risk, and due diligence for human rights risks. Friends Fiduciary’s shareholder resolution filed with Norfolk Southern Corporation was recently supported by 76% of the share votes cast by investors on the proposal – a very strong signal from investors to the company that they need to address the concerns raised in the proposal.

Corporate interest groups have put out a false narrative that resolutions are costly and a burden on companies, when in fact FFC has heard directly from a number of companies that they have found our engagements “extremely productive” and helpful in moving their company forward on important issues. FFC intends to continue such productive dialogues with companies which is an important way we witness to Quaker values in the corporate world.