Policy and Legal

The Securities and Exchange Commission this week reversed Biden-era guidance that required publicly traded companies to include environmental and social activist shareholder proposals on proxy ballots (InvestmentNews).

What’s going on: In a move that NAM President and CEO Jay Timmons called a “depoliticiz[ation of] the proxy process” and “a crucial plank of President Trump’s pro-manufacturing deregulatory agenda,” the SEC rescinded Staff Legal Bulletin 14L, which had allowed activists to mandate consideration of social policy proposals on corporate proxy ballots—even when the policies in question were unrelated to a company’s business.

Why it’s important: SLB 14L “empowered activists at the expense of manufacturers and Main Street investors—turning the proxy ballot into a debate club, forcing businesses to court controversy and divert resources from growth and value creation,” Timmons continued.

• Replacing SLB 14L with the new SLB 14M “return[s] the SEC’s review of shareholder proposals to a company-specific process based on relevance to a business’s operations and its investors’ returns,” which will “allow manufacturers to focus on what they do best: investing for growth, creating jobs and driving the American economy.”

What we’ve been doing: Since SLB 14L was adopted in 2021, the NAM has been a leading voice calling on the SEC to reverse course.

• Most recently, the NAM, along with more than 100 manufacturing associations, outlined for President Trump more than three dozen regulatory actions the new administration could take across federal agencies to boost the manufacturing economy and end the regulatory onslaught—including rescinding SLB 14L.
• The NAM also has called on President Trump’s nominee to chair the SEC, Paul Atkins, to take steps to depoliticize the proxy process.