Shareholders owning at least $2,000 of stock for a year or longer, have the right to propose a resolution at a companies annual board meeting. They can engage with the company "on issues ranging from climate change disclosure to increasing diversity at the board level to digital security. These resolutions provide critical feedback that improves company governance."
House Financial Services Committee Chairman Jeb Hensarling has proposed a bill to limit shareholders' rights to engage to only those owning at least 1% or more of a company for a period of at least three years.
What's the big deal?
Resolutions lead to conversation. When a shareholder presents a resolution it opens communication between shareholders and management and, more often than not, it leads to changes or improvements to the issue at hand and the resolution is then withdrawn following the promise for change.
What happens if the bill goes through?
What if only the billionaire's are allowed to challenge management and processes?
Read Kathy Hipple's full insightful article here.