Leading Investor Group Defends SEC as Fair Arbiter of Shareholder Proposals as ExxonMobil Goes to Court

Washington, D.C., Feb. 8, 2024 — The Council of Institutional Investors (CII) issued the following statement in response to ExxonMobil’s intent to pursue a lawsuit in federal district court against proponents of a shareholder proposal dealing with the energy giant’s greenhouse gas emissions despite the proponents’ withdrawal of the proposal:

“We believe the SEC’s Rule 14a-8 no-action process generally is superior to litigating differences over whether shareholder proposals should be included on proxy ballots.

“Companies have a right to bypass the SEC no-action process and go to court to try to keep shareholder proposals they do not like off their proxy ballots. But experience suggests that most market participants view the SEC’s Division of Corporation Finance as a fair arbiter, even if one may disagree with the result in a particular case.”

“In 1983 the SEC sought public input on alternatives to Rule 14a-8, which governs the shareholder proposal process, including leaving the area to state law. There was nearly universal opposition then to such alternatives and we do not believe that the situation has changed so much that such a radical change is warranted now.”