Speaking at the Society for Corporate Governance Conference in Nashville earlier this month, Securities and Exchange Commission (“SEC”) Chair Paul Atkins addressed two major themes for public companies: restoring materiality as the foundation of public company disclosure and reconsidering the shareholder proposal process under Rule 14a-8. Chair Atkins connected those themes to the SEC’s broader focus on making it more attractive for companies to go public and remain public.
Chair Atkins expressed concern about the amount of immaterial information currently included in the lengthy public filings that companies prepare, at substantial cost, and that investors struggle to understand or just ignore entirely. Chair Atkins noted that in January 2026, the SEC began soliciting public feedback on Regulation S-K and has received more than 100 comment letters. He highlighted comments recommending an overarching “materiality overlay” qualifier for Regulation S-K, which would permit companies to omit information otherwise called for by a line item of Regulation S-K if the information is not material, with some also recommending potential exceptions in which the qualifier would not apply, such as executive compensation disclosure. In Chair Atkins’ view, this approach may help create a principles-based disclosure regime that represents the “minimum effective dose of regulation” and elicits material information based on the facts and circumstances of each company, while market forces could drive disclosure of other information that a company’s investors want.
Chair Atkins also emphasized that any move toward a more principles-based disclosure framework will require companies to exercise judgment. He cautioned that a materiality overlay will reduce immaterial disclosure only if companies use the discretion afforded to them and omit information that is not material; the SEC cannot force companies to take advantage of new conditions. He also stated that companies must “own responsibility for the volume, clarity, and substance” of their filings, and that, rather than including disclosures just because peers have them or because they have included them in the past, they should carefully consider whether the information is required or material to avoid filings filled with trivial information that does not help companies or shareholders.
Chair Atkins compared the Division’s decision not to issue non-binding no-action letters to “removing the training wheels from the shareholder proposal bicycle” and stated that companies, shareholders and advisers should have no trouble applying Rule 14a-8. He observed that they already regularly make difficult judgments under the federal securities laws without SEC staff guidance, and that the issuing of no-action letters for shareholder proposals has made both companies and shareholder proponents too comfortable relying on support that they do not need. While there were six lawsuits against companies for excluding a proposal during the past shareholder proposal season, they represented a small percentage of the overall proposals excluded and adverse recommendations from proxy advisors in connection with exclusions were rare. More broadly, Chair Atkins stated that the SEC is “rethinking Rule 14a-8 and the shareholder proposal system,” and questioned whether prior amendments to the rule have sufficiently considered the federal government’s appropriate role in regulating shareholder proposals. As the SEC evaluates Rule 14a-8, he is also considering the relationship between the rule and state corporate law, noting that state law generally governs relationships among shareholders and between shareholders and corporations and reiterating his 2008 view that principles of federalism should be respected.
Chair Atkins also repeated a warning he gave in 2008 that the shareholder proposal process should not result in the “tyranny of the minority,” noting that one individual was the sole or lead proponent for approximately 41 percent of shareholder proposals voted upon during the past shareholder proposal season and that only eight percent of that individual’s proposals received majority support. He encouraged those involved in the shareholder proposal process not to allow fringe interests to become the focus, encouraged companies to use the tools at their disposal to push back and suggested that states looking to become or remain desirable destinations for corporate domestication should ensure that their corporate laws do not enable “politicization of shareholder meetings.”
Public companies should continue to monitor the SEC’s Regulation S-K and Rule 14a-8 initiatives. For more information, read Chair Atkins’ full remarks here.