Proxy season 2026: What to expect from rule 14a-8 changes

Among the tumult of 2025 was a November announcement from the SEC stating that it would reduce oversight of shareholder proposal disputes. Blaming ‘current resource and timing considerations following the lengthy government shutdown,’ the regulator said that it would end ‘substantial’ reviews of no-action requests under rule 14a-8, with the change applying to the proxy season running from October 2025 to September 2026 – as well as anything it hadn’t got to before the decision was made. You can read more about the SEC’s decision here.

As we kick off 2026, we hear from governance experts on how they think the regulator’s step back will affect the proxy season going forward.

‘It is very much the fox watching the hen house’: Kristin Hull, founder, chief investment officer and portfolio manager of Nia Impact Capital

We’re in some pretty tricky waters with Trump’s SEC saying it’s going to let companies decide what goes on to the proxy ballot and what doesn’t. It is very much the fox watching the hen house. [How this usually works] for the most part, is that an investor will file a proposal a company will say, Nope, we’re not going to do that. Then the SEC comes back and says, Actually, this is material, this is going on the ballot. Without the SEC voice saying, Yes, this is worthy of getting in front of investors’ eyes for a vote, we’re going to see much fewer resolutions making it onto the ballot.

We’re going to need a shift, because the current tools are being taken away from investors. We’re going to need to have more sign-on letters. We’re going to need to have more public discourse.

We’re definitely in a place of change when it comes to the investor role and the company role as far as corporate governance.

‘The SEC’s new regulations are long overdue’: Lucy Fato, general counsel and corporate secretary at Seaport Entertainment Group

A company that has received a shareholder proposal can now use discretion to decide whether the proposal will be included in the company’s proxy statement. This will result in fewer proposals seeing the light of day.

Over the last couple of decades, companies have had to deal with repeat proposals from the same shareholders who submit the same proposal to hundreds of companies every year. This was an abuse of the system and, as a result, companies will have virtually no appetite to deal with them anymore – and likely face little risk from excluding these kinds of proposals from their proxy statements.

Many shareholder proposals result in outsized time and expense for companies, boards and management teams, with little if any benefit to shareholders and other stakeholders. Regulation is important, but until now, the SEC has imposed virtually no guidelines or constraints on rogue shareholder proposals. I believe that the SEC’s new regulations are long overdue and will be overwhelmingly welcomed by the investment community. 

‘The shareholder proposal mechanism lets the steam out’: Aaron Bertinetti, CEO of investor engagement, Computershare North America, who spent 12 years at Glass Lewis

The first question is, are you likely to see fewer shareholder proposals? I think it’s fair to say you probably will – with a couple of caveats around that, with some traditional proponents likely using other methods to raise their issues. We’ve seen an increase, particularly in the US, of vote-no campaigns against directors, for example. [Maybe proponents will just] take that approach instead and target directors directly, as opposed to using a shareholder proposal to raise a particular issue.

Then, for companies, where there is material interest in a particular issue around, say, governance, or even climate, there is some risk contagion if you decide not to put a proposal up – particularly on director elections, where committees or chairs of those committees can be held accountable for not responding to certain areas of interest to shareholders.

Companies and regulators talk a lot about the cost of shareholder proposals. But there are some very distinct benefits to shareholder proposals that are unique to the US. In other markets, where you don’t have shareholder proposals, you have much higher rates of protest against pay and boards, for example. You also generally have more activism because you don’t have the shareholder proposal mechanism to let the steam out.

What’s really nice about a shareholder proposal is that it isolates an issue. It takes it away from, frankly, the more important issues for a board and puts it in its own little sandbox, where you can handle it in a non-binding way. It also serves as an early warning system, allowing you to engage with people you may not ordinarily engage with, building that goodwill and reputation.

‘Companies could be exposed to legal challenges after the fact’: Douglas Chia, president at Soundboard Governance

If this particular SEC, under Chairman Atkins, is it able to implement what it wants, then the shareholder proposal avenue will be cut off for a lot of investors who ordinarily do file shareholder proposals and it is clear that regulatory changes are already having a huge impact.

Will shareholders still file the proposals? Will companies say, We can just exclude these things? That also could expose companies to some kind of challenge after the fact. Maybe shareholders are just going to take this to court. In all likelihood, someone will file a shareholder proposal that will get summarily dismissed by the company, only for the shareholder to say, We’re taking this to court because we want to force the court to test this.

Then there are these so-called recent developments, such as Atkins giving a speech where he talks about how maybe – under Delaware law – you don’t have the right to file a shareholder proposal. But that’s somebody’s theory – it’s never gone to court. I don’t see that as a recent development. That’s just a recent academic discussion.

‘Companies have to consider the reputational impact of a heavy-handed response’: Bruce Goldfarb, president and CEO of Okapi Partners

I don’t know that there will be significant impact [from the SEC’s pullback], because it still said there needs to be a reasonable basis for excluding a proposal. This may give the appearance that the playing field has tilted, but that’s not necessarily the case.

A valid proposal should still be permitted on a ballot and a proponent still has that avenue available – it just might be harder or cost more money. You may even have to go to court. A proponent may instead have to have to run their own proxy fight in compliance with rule 14a-4, as opposed to 14a-8. 

But companies that just choose to exclude a proposal – without a valid reason – will have issues with investors if it becomes highlighted in the market and under-performing companies they will become a target one way or another.

There is reputational risk too. Companies and their advisors are going to have to take a look at the rules and assess the risk to value if they are heavy-handed in their desire to exclude something that may not have been excludable under the SEC.