In Short

The Situation: Shareholder engagement has become a continuous, proactive process, requiring active participation from both investors and companies. This year, companies and investors have changed both their expectations and practices relating to engagement due to SEC guidance that altered the parameters for passive investors who file beneficial ownership reports on Schedule 13G.

The Result: The SEC guidance compels passive investors to carefully assess their engagement activities to ensure they do not cross the line into influencing control. Companies, in turn, must be mindful of these constraints and adjust their shareholder outreach practices accordingly.

Looking Ahead: The last months of the year are a key time for engagement on investor priorities, company performance, and annual meeting outcomes. An understanding of the changes in engagement practices will help companies maximize their opportunities to address investor concerns and provide feedback before the start of the 2026 proxy season.