Shareholders are making their voices heard this proxy season, one way or another, despite the Securities and Exchange Commission's withdrawal from the Rule 14a-8 no-action process. Shareholders have turned to litigation to challenge the exclusion of their proposals from company proxy materials, with six lawsuits filed under the SEC's revised process. As boards consider including shareholder proposals now or in future proxy seasons when the SEC is not playing referee, sources have suggested multiple avenues for discussion. However, optics are always at play, for better or for worse. Given the undue burden of even a short-lived shareholder lawsuit, the costs it imposes on a company and the airtime a shareholder lawsuit might receive, boards need to balance priorities and objectives against the backdrop of reality in a corybantic environment. "Generally, most people can have a pretty good sense going into an annual meeting of what level of support the proposal will get," said Dave Lynn, partner in the Capital Markets group at Goodwin and chair of the firm's Public Company Advisory practice. "But even if they have a basis to exclude it, does the board really want to do that in a very public way?"
Read the FT Agenda article for more.