Investors Warn of Backlash if Companies Ignore Shareholder Bids

Shareholders have a message for companies aiming to block their environmental, social, and governance proposals as a business-friendly SEC is suddenly backing off its longtime role of refereeing disputes: watch out.

Investors condemned the Securities and Exchange Commission’s Nov. 17 decision to stop advising companies on whether they can bar shareholder proposals in most cases. The move under first-year SEC Chairman Paul Atkins is a blow to shareholder rights and the gutting of a well-trodden, orderly process that investors have long relied on to engage with companies on touchy subjects, they said.

Companies are in uncharted territory, too. Without the ...