SEC Restores Shareholder Rights

Interview with Sanford Lewis regarding SEC and risk resolutions at SocialFunds.Com

October 29, 2009
Activist Shareowners Celebrate SEC Reversal of Bush-Era Ruling

by Robert Kropp

SocialFunds.com — Shareowners seeking to engage meaningfully with companies on matters of environmental, social, and governance (ESG) criteria won an important victory this week, when the Division of Corporation Finance at the Securities and Exchange Commission (SEC) issued Staff Legal Bulletin No. 14E. The ruling effectively reversed an SEC decision enacted in 2005, under the Bush administration, which disallowed shareowner resolutions that addressed questions of financial risk associated with corporate activities on ESG issues.

The ruling arrives in time for the 2010 proxy season, as many shareowner proposals for the new proxy season will be filed in November.

SocialFunds.com spoke with Sanford Lewis, an attorney in private practice whose clients include the Investor Environmental Health Network (IEHN) and other responsible investor organizations working for shareowner rights. He said, “I think the Bush administration rule was politically motivated, and was never fully justified.”

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