Shareholder-rights advocates are mobilizing. The Council of Institutional Investors, representing pension funds with assets under management of approximately $5 trillion, has written to the SEC demanding that the agency resume substantive review of shareholder proposal no-action requests. The International Corporate Governance Network, whose members manage over $90 trillion, has issued a similar plea, calling on the SEC to “reconsider” and return to the traditional process. Most recently, shareholder activists Sanford Lewis and Khadija Foda have attempted, on this blog, to dismantle an empirical study by the Weinberg Center used to justify overhauling Rule 14a-8 – noting, among other things, that the study inflated costs and misrepresented the underlying data.

These are serious organizations making serious arguments. But they are fighting the wrong battle. The shareholder-rights community’s immediate concern is that the SEC is narrowing the scope of shareholder-proposal rights by abandoning substantive no-action review and departing from traditional process. That concern is not unfounded. But it obscures a larger risk: the very real possibility that the SEC will repeal Rule 14a-8, eliminating the federal shareholder proposal process entirely.

The Trajectory Toward Repeal

The signals are unmistakable. In his October 2025 keynote at the Weinberg Center, SEC Chairman Paul Atkins declared that the Commission should “re-evaluate” Rule 14a-8’s “fundamental premise” – that shareholders should be able to force companies to include proposals in their proxy materials at the company’s expense. One month later, the SEC withdrew from substantive no-action review for the 2026 proxy season, effectively exiting the shareholder-proposal business for the year. Then, in December 2025, President Trump issued an executive order directing the SEC to “consider revising or rescinding” all rules relating to shareholder proposals, “including Rule 14a-8.” And the SEC’s own regulatory agenda targets April 2026 for a proposed rulemaking to “modernize” the rule – a euphemism that, in this political climate, could encompass anything from modest reform to outright repeal.

Yet the institutional investor response treats these developments as a temporary aberration rather than a deliberate trajectory. The CII letter asks the SEC to reverse course “as soon as practicable, but no later than the end of this proxy season.” The ICGN letter urges the SEC to use formal notice-and-comment rulemaking – apparently without recognizing that a formal rulemaking is exactly what the SEC has planned, and that it could result in the Rule 14a-8’s repeal, not its restoration. Even Lewis and Foda, whose critique of the Weinberg Center survey is well taken on its own terms, frame the debate as one about how to calibrate a federal regulatory regime – an argument that assumes the regime’s continued existence. That assumption should not be taken for granted.

What Repeal Would Mean

If Rule 14a-8 is repealed, the landscape fundamentally changes. For all its well-documented deficiencies – the political volatility, the inconsistent no-action guidance, the platform it has afforded activists to pepper corporations with proposals that shareholders routinely reject – the rule has always served one structural function: It enables a shareholder holding as little as $2,000 of stock to place a proposal on a company’s proxy statement at the company’s expense. Without the rule, shareholders seeking to put a proposal before fellow shareholders would need to prepare and distribute their own proxy materials – an undertaking so costly that virtually no one would do it for a nonbinding, precatory resolution. The practical effect of repeal is not merely to narrow shareholder proposal rights. It is to eliminate them.

Consider the parallel discussion over precatory proposals under Delaware law. In a recent, much-discussed article, Kyle Pinder argues that Delaware law does not confer on stockholders an inherent right to submit precatory proposals, and Chairman Atkins has enthusiastically embraced this view. If precatory proposals are categorically improper under state law, then nearly all shareholder proposals – roughly 98 percent of which are precatory – could be excluded from corporate proxy statements, even without any change to Rule 14a-8.

Pinder’s position is in some tension with one I have advanced on this blog and in a 2024 article in the Journal of Corporation Law. That article, which Chairman Atkins cited alongside Pinder’s, argues that companies can achieve much of the same result through private ordering – by adopting tailored bylaw provisions governing shareholder proposals, as permitted under the broad contractual freedom that Delaware law affords. While Pinder contends that the right to make precatory proposals never existed, my private-ordering thesis treats that right as a default rule that can be modified or restricted through the corporate contract. Both approaches lead to the same practical destination: Companies can control the proposal process through state law, without relying on federal regulation.

But whoever has the better of this debate, the prospect of Rule 14a-8’s repeal renders it largely academic. All shareholder proposals – precatory or otherwise – depend on the rule. It is the rule that gives a single shareholder access to the company’s proxy statement, sparing the shareholder the prohibitive cost of soliciting proxies independently. Whether shareholders possess a default right to make precatory proposals or lack that right entirely, neither position matters much if no shareholder will pay out-of-pocket to exercise it. Without Rule 14a-8, bylaws regulating shareholder proposals become unnecessary. No rational shareholders are going to spend their own money to solicit proxies for nonbinding resolutions.

The Ground Is Shifting

There is a deeper irony here. For years, the SEC’s administration of Rule 14a-8 has been marked by inconsistency, political volatility, and charges of viewpoint discrimination. The agency’s no-action guidance has shifted each time control of the Commission changes hands, opening it to accusations of partisan bias from both sides. It is precisely because the system has been so poorly administered that the case for abolishing it has gathered political momentum. Shareholder-rights advocates who spent years defending the SEC’s expanding interpretation of the rule during sympathetic administrations must now reckon with the fact that the same political volatility has laid the groundwork for the rule’s potential demise.

None of this means that Rule 14a-8’s repeal is certain. But the difference between reform and repeal is the difference between a system that needs improvement and one that ceases to exist. Chairman Atkins has questioned the rule’s “fundamental premise.” President Trump has ordered the SEC to consider rescinding it. The SEC has already walked away from administering it. Shareholder-rights advocates who spend their energy quarreling over survey methodology and pleading for a return to the status quo ante are not reckoning with where this trajectory leads. The ground beneath the shareholder proposal process is shifting. Those who fail to see it may find themselves with nothing left to fight over. Whether one favors preserving the rule in reformed fashion or embracing a state-law alternative, the first step is the same: recognizing what is actually at stake.

Mohsen Manesh is the L.L. Stewart Professor of Business Law at the University of Oregon School of Law. He is the author of “The Corporate Contract and the Private Ordering of Shareholder Proposals,” published in the Journal of Corporation Law.