In SLB 14L the Division has rescinded its three most recent staff legal bulletins under Rule 14a-8 and changed the standards it will apply to determine whether shareholder proposals may not be excluded under the ordinary business and economic relevance exceptions because they involve significant social policy issues, such as those relating to climate change or human capital management.
The Division’s significance analysis in evaluating no-action requests generally will focus on whether proposals raise issues “with a broad societal impact” (in the case of the ordinary business exception) or “issues of broad social or ethical concern” (in the case of the economic relevance exception), rather than, as in the recent past, on whether they are of significance to the particular company. Under the revised standards, companies no longer may exclude a proposal under the ordinary business exception by establishing that the issues raised by the proposal are not significant for the company, or under the economic relevance exception by establishing that the proposal does not relate to operations that meet company-specific economic thresholds.
In other guidance presented in SLB 14L, the Division updates the application of certain procedural requirements under Rule 14a-8 that it previously addressed in the rescinded legal bulletins.
SLB 14L can be found here.
Authored by Alan Dye (co-editor), Richard Parrino (co-editor), John Beckman, Alex Bahn, Kevin Greenslade, and Tiffany Posil