Us Congress 2023-2024 Regular Session

Us Congress House Bill HB4657

Introduced
7/14/23  

Caption

To clarify that an issuer may exclude a shareholder proposal pursuant to section 240.14a-8(i) of title 17, Code of Federal Regulations, without regard to whether such proposal relates to a significant social policy issue.

Impact

The passage of HB 4657 could notably impact corporate governance practices, as it empowers issuers to sideline proposals that they may view as socially or politically charged. By alleviating the obligations to engage with such proposals, corporations may feel more liberated to manage their governance structures independently of shareholders' socially motivated interests. This change could result in a narrower scope of shareholder involvement in corporate decision-making, especially on issues that may pertain to broader corporate social responsibility or ethical concerns.

Summary

House Bill 4657 aims to provide clarity regarding the exclusion of shareholder proposals by issuers under the regulations set forth in section 240.14a-8(i) of title 17 of the Code of Federal Regulations. The bill specifies that issuers are permitted to exclude shareholder proposals without having to consider whether these proposals address significant social policy issues. This legislation reflects a move to simplify the decision-making process for corporations concerning shareholder proposals, potentially reducing the frequency of contentious proposals being brought to vote at annual meetings.

Contention

Notably, the bill has been met with debate regarding the consequences it might have on shareholder rights and the overall accountability of corporations to their stakeholders. Critics of HB 4657 might argue that it effectively diminishes shareholders' ability to influence corporate behavior regarding important social issues, potentially creating a corporate culture less responsive to public concerns. Proponents argue that it protects issuers from operational disruptions caused by incessant social policy-related proposals that could distract from fundamental business objectives.

Companion Bills

US HB4767

Related Protecting Americans’ Retirement Savings from Politics Act

Previously Filed As

US HB4640

To authorize the exclusion of shareholder proposals from proxy or consent solicitation material if the subject matter of the shareholder proposal is environmental, social, or political.

US HB52

Stop Woke Investing ActThis bill requires the Securities and Exchange Commission (SEC) to amend regulations to limit the inclusion of shareholder proposals in proxy statements. A proxy statement is provided to shareholders prior to a public company holding a shareholder meeting and contains information relevant to a shareholder vote. Under current SEC rules, certain qualifying shareholder proposals must be included on a company's proxy statement, including proposals that raise significant social policy issues.Under the bill, a shareholder proposal must have a material effect on the financial performance of the company to be included in a proxy statement. The bill also establishes a cap on the number of shareholder proposals required to be included in a shareholder meeting, depending on the size and type of the company. In addition, a proposal submitted by a member of the board of directors is prohibited from inclusion as a shareholder proposal.

US SB3703

RESPITE for Businesses Act Rejecting Extremist Shareholder Proposals that Inhibit and Thwart Enterprise for Businesses Act

US HB4648

To amend the Securities Exchange Act of 1934 to provide for duties of certain investment advisors, asset managers, and pension funds with respect to voting on shareholder proposals, and for other purposes.

US HB4645

Empowering Shareholders Act of 2023

US HB2497

To permit an issuer, when determining the market capitalization of the issuer for purposes of testing the significance of an acquisition or disposition, to include the value of all shares of the issuer.

US HB35

Close the Medigap Act of 2023 This bill (1) expands guaranteed issue rights with respect to Medigap policies (Medicare supplemental health insurance policies), (2) eliminates certain limitations on Medigap policies for newly eligible Medicare beneficiaries, and (3) modifies other provisions related to Medigap policies. (Guaranteed issue rights require that a policy be offered to any eligible applicant without regard to health status.)

US HB4863

Shareholder Political Transparency Act of 2023

US HB448

Putting Investors First Act of 2023 This bill requires a proxy advisory firm to register with the Securities and Exchange Commission and prohibits an unregistered proxy advisory firm from using interstate commerce to provide proxy-voting advice, research, analysis, or recommendations to any client. With respect to these firms, the bill (1) establishes procedures for both registration and termination of registration; (2) requires each firm to employ an ombudsman, designate a compliance officer, and publicly disclose conflicts of interest; (3) allows issuers to assess and comment on proxy voting recommendations; and (4) prohibits unfair, coercive, or abusive practices. The bill establishes a private right of action against a proxy advisory firm that endorses an approved proposal that is not supported by the issuer and is found to be illegal.

US HCR22

Recognizing the significance of equal pay and the disparity between wages paid to men and women.

Similar Bills

No similar bills found.