SEC Proposes To Rescind Rule 14a-8, Shifting Burden to States
The SEC has proposed eliminating the longstanding federal rule requiring companies to include shareholder proposals in their proxy materials, a move that would shift the regulatory framework to state law and corporate governing documents.
On September 16, 2026, the SEC proposed one of the most significant changes to shareholder engagement in decades: the complete rescission of Exchange Act Rule 14a-8. This rule has for nearly 85 years required companies to include qualified shareholder proposals in their proxy materials. Citing an overreach of its statutory authority into matters of state corporate law, the Commission seeks to shift the entire framework for shareholder proposals to state law and individual companies’ governing documents. Concurrently, the SEC proposed amending Rule 14a-4(c) to expand a company's discretionary voting authority over proposals submitted outside the federal process, while also giving shareholders a new proxy-card checkbox to opt-out of granting such authority for their shares. If adopted, this would fundamentally alter the landscape for corporate governance and shareholder activism. The proposal faces a public comment period and likely legal challenges, and the changes would not affect the 2027 proxy season. Companies should begin monitoring state law developments, particularly in Delaware, and prepare for a period of regulatory uncertainty.