SEC decision to rescind guidance is a victory for manufacturers
The recent decision by the Securities and Exchange Commission to rescind guidance that mandated the inclusion of environmental and social activist proposals on proxy ballots for publicly traded companies marks a significant shift in policy. This move, which was lauded by NAM President and CEO Jay Timmons as a necessary step in depoliticizing the proxy process, is seen as a win for manufacturers and a key component of President Trump’s pro-manufacturing deregulatory agenda.
The rescinded Staff Legal Bulletin 14L, which previously allowed activists to force companies to consider social policy proposals on corporate proxy ballots regardless of their relevance to the business, created a scenario where manufacturers had to divert resources from growth and value creation to address unrelated issues. Timmons noted that this approach empowered activists at the expense of manufacturers and Main Street investors, effectively turning the proxy ballot into a debate platform rather than a tool for business operations and investor returns.
The replacement of SLB 14L with the new SLB 14M signifies a return to a company-specific proposal review process based on relevance to business operations, a move that is expected to enable manufacturers to refocus on their core competencies of investing for growth, job creation, and driving the American economy. This shift aligns with the NAM’s ongoing efforts to advocate for regulatory actions that support the manufacturing sector, including the rollback of SLB 14L, which has been a priority since its adoption in 2021.
The NAM has collaborated with over 100 manufacturing associations in presenting President Trump with a list of recommendations aimed at boosting the manufacturing economy and addressing regulatory challenges, with the rescission of SLB 14L being a key item on the agenda. Additionally, the NAM has urged President Trump’s nominee to chair the SEC, Paul Atkins, to take steps towards depoliticizing the proxy process, signaling a broader commitment to ensuring that regulatory decisions are grounded in business relevance and investor interests.
Overall, the SEC’s decision to rescind the previous guidance in favor of a more tailored, business-focused approach to shareholder proposals is viewed favorably by manufacturers and industry stakeholders. By refocusing the proxy process on matters directly related to a company’s operations and investor returns, the SEC’s move is expected to promote greater efficiency, clarity, and alignment with the interests of manufacturers, investors, and the broader economy.
