Ele Klein Discusses SEC Rule 14a-8 Proposal with Governance Intelligence

Ele Klein spoke with Governance Intelligence about the US Securities and Exchange Commission’s proposal to rescind Rule 14a-8 and what the change could mean for shareholder activism.

Ele noted that eliminating the current federal process could lead to fewer shareholder proposals overall, as investors would need to weigh the additional time and expense of navigating state law and company-specific governing documents.

“I think you would see far fewer shareholder proposals overall,” Ele said. “There will still be important issues where proponents are willing to spend the money and go through a more involved process, but the simple, relatively inexpensive Rule 14a-8 route would no longer be available.”

He added that shareholders would likely become more selective, pursuing proposals on issues they consider significant enough to justify the additional costs and procedural requirements.

Read the full article in Governance Intelligence.