ABSTRACT
Should Coca-Cola do more to protect abortion rights? Should Mastercard track gun purchases? Should Disney’s workplace DEI trainings be more sensitive to conservative perspectives? Under Exchange Act Rule 14a-8 (the ‘Rule’), an activist holding only a nominal stake in a public corporation is able to force a shareholder vote on such proposals, focusing attention on whatever hot-button issue they wish to spotlight.
Today, activists pepper corporations with politically divisive proposals in record numbers. While left-leaning groups, organized under the ESG banner, target corporations with proposals focused on progressive priorities, right-leaning outfits submit competing proposals, seeking to undermine ESG initiatives and urging a focus on corporate profits. Caught in the crossfire are America’s largest businesses. Corporate leaders complain that these divisive proposals are costly distractions, and average investors have shown little enthusiasm for them …
Manesh, Mohsen, The Corporate Contract and the Private Ordering of Shareholder Proposals (January 30, 2024).
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