The SEC has decided to keep its hands off one of the most consequential levers in corporate governance, and shareholder advocates are not happy about it. The agency announced that its staff will generally not provide substantive responses to company requests seeking permission to exclude shareholder proposals from proxy ballots, a procedural shift that effectively leaves corporations to police themselves on what investors get to vote on.
The policy, first announced on November 17, 2025, covers the entire 2025-2026 proxy season running through September 30, 2026. It means companies can now exclude shareholder proposals with little more than a form letter from SEC staff, rather than the detailed guidance that had been standard practice for decades.
What actually changed
Under the old system, when a company wanted to exclude a shareholder proposal from its proxy statement, it would file a “no-action” request with the SEC under Exchange Act Rule 14a-8. SEC staff would then review the proposal, weigh the company’s arguments, and issue a letter either agreeing or disagreeing with the exclusion.
Now, SEC staff will issue what amounts to a “no objection” letter if a company provides a valid rationale based on existing rules or judicial precedent. But the staff won’t actually evaluate whether the rationale holds water. The agency cited resource constraints following a government shutdown as the reason for the change, along with the availability of extensive prior guidance on the subject.
