As we previously addressed here, on February 12, 2025, the Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance published Staff Legal Bulletin 14M (“SLB 14M”). Among other things, SLB 14M rescinded previous Staff guidance on no-action requests, pursuant to which a company can attempt to exclude a shareholder proposal from consideration in its definitive proxy statement. SLB 14M also clarified the Staff's views on the scope and application of the “economic relevance exclusion” pursuant to Rule 14a-8(i)(5) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the “ordinary business exclusion” pursuant to Exchange Act Rule 14a-8(i)(7). We previously stated our belief that the Staff’s updated guidance would make it more challenging for proponents of shareholder proposals to overcome no-action requests based on broad social policy concerns, a prediction which only somewhat seems to have come to fruition during the 2025 proxy season to date.
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