Securities and Exchange Commission Chair Mary Jo White has a message for companies and shareholders: You’re big kids. Act like it.
Addressing a corporate-governance conference in Chicago, Ms. White sounded at times like a weary babysitter, urging companies and shareholders to try, whenever possible, to work out differences without asking the SEC to referee.
On a range of divisive issues, from investor proposals to whether unpopular directors should be forced to resign, Ms. White said: “I would like you to consider whether [SEC] rulemaking is the only way to solve these concerns.”
One hot-button topic is shareholder proposals. Thousands are submitted each year, typically falling into a few buckets: be more environmentally-conscious, disclose political contributions, let long-time investors nominate directors. Companies generally view them as a nuisance and often seek the SEC’s permission to ignore them. The agency received more than 300 such requests from more than 200 companies this proxy season, up 10% from last year, Ms. White said.
“I am not suggesting that management should never object to or oppose a shareholder proposal,” Ms. White said. “But companies in many cases should consider other possible steps they could take in response to a proposal rather than just saying no,” like compromising or agreeing to take certain steps in the future.