The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Wed, 20 May 2026 13:40:24 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Recent Shareholder Proposal Litigation Underscores the Need for Shareholder Proposal Reform – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Recent Shareholder Proposal Litigation Underscores the Need for Shareholder Proposal Reform https://corpgov.law.harvard.edu/2026/05/19/recent-shareholder-proposal-litigation-underscores-the-need-for-shareholder-proposal-reform/?utm_source=rss&utm_medium=rss&utm_campaign=recent-shareholder-proposal-litigation-underscores-the-need-for-shareholder-proposal-reform https://corpgov.law.harvard.edu/2026/05/19/recent-shareholder-proposal-litigation-underscores-the-need-for-shareholder-proposal-reform/#respond Tue, 19 May 2026 13:35:29 +0000 https://corpgov.law.harvard.edu/?p=181211?d=20260519093529EDT Posted by Ferrell Keel, Joel May, and Kim Pustulka, Jones Day, on Tuesday, May 19, 2026
Editor's Note:

Ferrell Keel, Joel May, and Kim Pustulka are Partners at Jones Day. This post is based on a Jones Day memorandum by Ms. Keel, Mr. May, Ms. Pustulka, David Peavler, and Randi Lesnick.

In Short

The Situation: Since the U.S. Securities and Exchange Commission announced in November 2025 that it would no longer rule on most Rule 14a-8 no-action requests, companies have taken varying approaches to shareholder proposals that continued to be pressed by social mission organizations, public employee unions, retirement systems, and others across the political spectrum. Some added the proposals to their proxy materials, some declined. Six proponents filed suit against companies, arguing that their proposals were improperly excluded.

The Result: While half of the six lawsuits settled, the other half resulted in court decisions that turned on the “ordinary business” exclusion under Rule 14a-8(i)(7)—but with seemingly divergent outcomes.

Looking Ahead: The lawsuits underscore the unworkability of Rule 14a-8 and may provide ammunition to those calling for sweeping reform or outright rescission of Rule 14a-8 as part of the SEC’s anticipated “Shareholder Proposal Modernization” rulemaking. Rescission would shift the issue to state law.

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