Two federal proposals issued this quarter address workforce reporting requirements and the rules governing shareholder proposals. Below, we outline the changes and Boston Common’s response.
Workforce Reporting
The Equal Employment Opportunity Commission (EEOC) proposed rescinding federal requirements for standardized reporting on workforce composition in the United States.1
Boston Common responded by submitting a public letter to the EEOC in August, asking the Commission to withdraw or substantially revise its proposal. In our statement, we argued that while EEOC reporting could benefit from modernization, full rescission would run counter to the Commission’s stated goal of reducing companies’ reporting burden.
Standardized reporting provides a consistent framework for workforce data. When companies publicly disclose information using that framework, investors can compare peers and identify differences that warrant further research or engagement. Without a common framework, company disclosures could become less consistent, making those comparisons more difficult.
Our concern also extends to whether rescission would actually simplify reporting. To the extent that individual state requirements remain in place and investor requests continue, eliminating federal reporting may simply shift some reporting demands to states rather than removing them entirely.
Shareholder Proposals
In September, the SEC issued a proposal to rescind Rule 14a-8 under the Securities Exchange Act of 1934. If adopted, the change would leave determinations about the role of shareholder proposals to state law and company governing documents.
The proposal, which remains open for public comment and has not been adopted as of this publication, is unlikely to meaningfully change Boston Common’s approach to engagement in the near term.2 We have long prioritized private dialogue over shareholder resolutions when possible, using the shareholder proposal as an escalation tool when private dialogue proves ineffective.3
The SEC’s shareholder proposal framework nevertheless provides an efficient, formal channel for investors to bring issues to a vote before fellow shareholders. Maintaining this channel supports corporate accountability and preserves investors’ ability to act on risks affecting their investments.
1 The proposal covers reporting provisions associated with Forms EEO-1 through EEO-6. EEO-2 and EEO-6 have not been collected for decades; their inclusion would remove reporting provisions that are no longer used.
2 Longer comment periods are supported when the matter under review is of “great public concern,” and we believe extending the comment period to 120 days would help the Commission develop a more complete record before making a final determination.
3 Boston Common’s process for considering shareholder proposals is disclosed in our recently updated Stewardship Policy.
This piece is intended as an editorial review of a survey of risk considerations and does not constitute investment advice, a solicitation, or an offer to buy or sell any security. Past performance does not guarantee future results. All investments involve risk, including the risk of loss of principal.
Company developments described in this report occurred during the period of our engagement but should not be assumed to have resulted from Boston Common’s activities. Where we believe our engagement contributed to a development, we describe the basis for that assessment.
References to third-party research, publications, and data sources are provided for informational purposes only. Boston Common Asset Management does not warrant the accuracy or completeness of third-party information cited herein. Readers should consult original sources and qualified professional advisors before making any investment decision.
