SEC Issues Guidance on Shareholder Proposals
Publication Date: November 6, 2017

The SEC Division of Corporation Finance has published new guidance in a Staff Legal Bulletin on excluding certain Rule 14a-8 shareholder proposals. The bulletin contains information about the Division's views on: the "ordinary business" and the "economic relevance" exceptions, each of which is a basis for exclusion of a shareholder proposal; proposals submitted on behalf of shareholders; and the use of graphs and images in proposals. In particular, the bulletin notes that "ordinary business" and "economic relevance" exclusions often involve difficult judgment calls, which a company's board is generally in a better position to make and encourages companies to include in requests for no action relief a discussion that reflects the board's analysis and details the specific processes employed by the board to ensure that its conclusions are well-informed and well-reasoned.