If the incoming Securities and Exchange Commission leadership allows more corporations to block activist shareholder proposals from consideration, the ones that get through could get more support, explained Stephen Brown, a senior adviser and managing director at the KPMG LLP Board Leadership Center.
“If we get fewer proposals because they get held up or stopped by the SEC’s no action process, then the proposals that get through maybe are ones that are worthy of the ballot,” Brown said on Activist Investing Today. “Maybe they’ll get serious consideration by institutions which have much larger stewardship teams than they had 10 years ago. You may see large institutional investors not afraid to vote for the measure if they think it is warranted.”
Brown also discussed M&A activism, CEO removal campaigns and proxy adviser rules in a Trump administration, as well as prospects for ESG proposals and anti-woke shareholder measures that have so far been “soundly rejected by institutional stewardship teams.”
“Will we see tougher guidance than we’ve seen in previous Republican administration on [SEC] proposals, or will we see actual legislation, coming from Congress, on these issues?” Brown said. “The corporate community has really had a lot of angst over the number of shareholder proposals, so I think you will see some activity there.”
Check out the podcast with Stephen Brown below:
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