Shareholder Rights Group Letter to Acting Director of Corporation Finance John Coates

From Shareholder Rights Group letter to  John Coates, Acting Director, Securities and Exchange Commission Division of Corporation Finance  (February 4, 2021):  

The last four years saw the Corporation Finance leadership undertake significant doctrinal experimentation in the Rule 14a-8 program, implemented through a series of Staff Legal Bulletins and no-action rulings. We acknowledge the dutiful and diligent work of the Staff in developing and implementing regulatory innovations; yet in the wake of this prolific experimentation, we strongly recommend that the Division now take careful stock of the various experiments and reverse problematic initiatives.


Among these novel doctrinal and procedural devices were: (a) a new definition of 'micromanagement', (b) a new approach to 'substantial implementation', (c) a request for opinions from boards of directors, (d) a decision to not issue written rulings on each no-action request, (e) a new approach to 'relevance', and (f) a new way to exclude proposals based on the concept of a 'delta' between the proposal and prior company actions.

We questioned the viability of these so-called innovations at the time, and now have had enough time to work under them to be able to conclusively state that they interfere with the ability of shareholders to engage in active stewardship through the shareholder proposal process.

Read the Letter