“About a month or so ago in Delaware, I outlined some steps that we will be taking with respect to corporate governance and shareholder proposals and really the abuse of the corporate governance system and the weaponization of shareholder proposals by politicized shareholder activists,” Atkins said.
“These particular advisory companies play a role,” Atkins added. “The charges of conflicts of interest are really legion, the stories of those, and so we have to address this issue overall.”
Atkins’ remarks were flagged by Bloomberg, which reported Friday that proxy advisers, who provide guidance to shareholders, have faced greater scrutiny.
This scrutiny includes a reported Federal Trade Commission investigation into whether two proxy advisers violated federal antitrust laws by advising shareholders on how to vote on politically charged topics, for their own ideological reasons, according to the report.
Atkins said in an Oct. 9 speech that he aimed to depoliticize shareholder meetings and return the focus of those meetings to voting on director elections and “significant corporate matters.”
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In his keynote address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala in Newark, Delaware, Atkins said the aim is one of three ways in which he wants to make it more attractive for firms to become public companies. The others include simplifying the SEC’s disclosure requirements and eliminating frivolous securities lawsuits.
“In the past few proxy seasons, perhaps nothing has epitomized the politicization of shareholder meetings more than shareholder proposals focused on environmental and social issues,” Atkins said in his speech. “These proposals, which reflect views from both sides of the political aisle, generally call for actions that are not binding on the company—referred to as ‘precatory proposals’—and frequently involve issues not material to the company’s business.”
“When voted on at meetings, they almost always receive even lower support than shareholder proposals do generally,” Atkins said. “Nonetheless, these proposals consume a significant amount of management’s time and impose costs on the company.”
