Policy Briefing: Shifts in the SEC’s shareholder proposal process — Follow changes to 14a-8 enforcement

This development marks one of the most consequential governance shifts of the season, with implications for board oversight of governance, shareholder engagement strategy, and proxy season preparedness. 

Key takeaways: 

• The SEC is changing its role in the Rule 14a-8 process. For the current proxy season (October 1, 2025 – September 30, 2026), the SEC will no longer respond substantively to “no-action” requests from companies seeking staff concurrence to exclude shareholder proposals — except where the exclusion basis is that the proposal is not a proper subject for shareholder action under state law.  
• Companies still must follow notice procedures, but staff review is optional. Under Rule 14a-8(j), companies that intend to exclude a shareholder proposal must still notify the SEC and the proponent at least 80 days before filing definitive proxy materials. However, companies are no longer required to obtain a staff position to proceed with exclusion, and the SEC will not issue traditional no-action letters evaluating merits.  
• A limited “no-objection” path remains. Firms can still request a staff letter stating “no objection” to excluding a proposal — but only if the company includes an unqualified representation that it has a reasonable basis. 
• State law exclusions remain the one area of substantive review. The only category still subject to traditional staff review is Rule 14a-8(i)(1) Improper state law, driven in part by ongoing questions about whether precatory (non-biding) proposals are permissible under state corporate law. 

What is SEC Rule 14a-8 and why does it matter? 

It is the regulation that governs when and how shareholders of U.S. public companies can submit proposals for inclusion in a company’s proxy statement and for a vote at the annual meeting. Administrated by the SEC, the rule sets eligibility thresholds (such as ownership amount and holding period), procedural requirements, and a defined list of bases under which a company may exclude a proposal. This rule is the primary mechanism through which shareholders, from large institutional investors to indviduals, can formally raise issues like board governance, executive compensation, capital allocation, and environmental or social risks directly to fellow shareholders.  

Moreover, Rule 14a-8 shapes the balance of power between boards, management, and shareholders. For companies, it influences proxy strategy, legal risk, investor relations, and board agenda-setting. A more permissive or uncertain application of the rule can lead to more proposals appearing on the ballot, increasing scrutiny and reputational exposure; a more restrictive approach can limit shareholder voice but raise concerns about accountability and transparency. As regulatory interpretation shifts, Rule 14a-8 becomes a strategic governance issue, not just a compliance exercise, requiring boards to actively manage shareholder engagement, anticipate emerging topics, and decide when to negotiate, oppose, or embrace proposals that signal investor priorities. 

What has changed 

• The SEC will generally not issue substantive no-action letters assessing whether a shareholder proposal may be excluded under Rule 14a-9. 
• Companies may still notify the SEC of intent to exclude a proposal, but they are no longer required to obtain staff concurrence 
• A limited “no-objection” process remains, based on a company’s unqualified representation that it has a reasonable basis for exclusion; the SEC will not evaluate that basis.  
• The SEC will continue to review exclusions based on state law grounds, particularly where questions exist about whether proposals are proper subjects for shareholder action.  

For more from the SEC, read: SEC.gov | Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season 

The SEC’s new approach to Rule 14a-8 represents a structural shift in U.S. corporate governance. For boards, it raises the stakes of proxy oversight and reinforces the need for proactive engagement, disciplined decision-making, and clear integration between governance strategy and fiduciary duty.  

Actions boards can take: 

• Revise proxy season planning documents to eliminate assumptions about traditional no-action responses. 
• Engage early with large investors and proxy advisors to identify and, where possible, resolve proposals before formal submissions.  
• Strengthen legal analysis and documentation supporting exclusion rationales under Rule 14a-8.  
• Map escalation paths for disputes, including negotiation, mediation, and alternative dispute strategies outside the no-action process. 
• Educate directors on the implications of this shift and integrate it into governance risk oversight frameworks.