25 September, 2026

For more than 80 years, shareholders in US companies have been ale to put forward proposals for other shareholders to vote on. It’s a surprisingly powerful tool, which has been around since 1942, and has been used to ask companies difficult questions – notably on areas such as executive pay, climate and DEI.

Now, under a chairman handpicked by Trump, the US Securities and Exchange Commission is proposing to scrap it. The change would remove the federal framework for shareholder proposals and leave much more of the process to individual states and companies themselves. In practice, that could mean far less consistency in how shareholders can raise concerns, and in some cases, fewer opportunities to do so at all. Supporters argue that the current system is costly and has allowed activists to use shareholder meetings to advance their own agendas. Critics say removing it could weaken an important way for investors to hold companies to account, notably on proposals with a social or environmental agenda. One activist investor noted: “For ESG investors that live and die by precatory proposals, this is an enormous change and problem.”

We think there is cause for concern here. Activist investors are one of a number of forces which can exert pressure on companies to act on issues of importance. Governments regulate, NGOs campaign, consumers vote with their wallets – and shareholders file resolutions. It all helps create pressure for companies to respond.

Of course not every proposal will be useful or material to the business. But being questioned, even imperfectly, remains valuable. There’s also the fact that these mechanisms don’t just serve to push reluctant companies to act. They can also help businesses spot what they might be missing, test their assumptions and keep asking whether they’re doing enough, spotting opportunities as well as protecting from risk.

In our minds, the more routes available for healthy challenge the better. Progress is often fastest when multiple forces collide to point in the same direction, take some of them away and the momentum can fade as well.

By Justine Bahoumina