Filing Effective Shareholder Resolutions: A User’s Guide

Filing Effective Shareholder Resolutions: A User’s Guide

Rory Sullivan and Lyndsey Hurley

A shareholder proposal is a resolution that is put forward by a single shareholder, or group of shareholders, to a company board, asking for a matter to be voted upon at the company’s Annual General Meeting (AGM). It is an important stewardship tool that focuses efforts on a concrete call to action.

Shareholder proposals are an important corporate engagement mechanism, and a key governance tool for investors. They allow investors to use their formal rights as owners to publicly and transparently escalate important matters. The number of shareholder proposals focused on ESG issues has grown dramatically in recent years, as part of a wider trend of growing investor stewardship.

We have worked with the Principles for Responsible Investment (PRI) to produce a guide for investors on how to use shareholder proposals to drive improvements at investee companies on environmental, social and governance (ESG) issues. The guide sets out the process to be followed, describes who can submit proposals, discusses the pros and cons of co-filing, advises on the framing and drafting of proposals so that they have maximum impact, and discusses the relationship between these proposals and company engagement.

In addition, we have produced a series of country-specific factsheets, providing an overview of the key legal and technical processes related to filing a shareholder proposals in Australia, Canada, France, Germany, Japan, South Africa, the UK and the US.

The report, the country guides and supporting materials can be found at: https://www.unpri.org/filing-shareholder-proposals/a-guide-to-filing-impactful-shareholder-resolutions/10995.article