# Plain Language Summary: Businesses Over Activists Act

This bill would prevent the Securities and Exchange Commission (SEC) from requiring publicly traded companies to include shareholder proposals in their proxy materials. To understand what this means, imagine you own stock in a company. Currently, if you and other shareholders want to propose something—like asking the company to adopt certain environmental practices, change executive pay policies, or improve labor standards—you can submit that proposal to be included in the proxy statement that goes out to all shareholders before voting meetings. The SEC has rules that generally allow these proposals to be included so shareholders can vote on them. This bill would strip away that requirement, giving companies the power to exclude shareholder proposals from their proxy materials entirely.

The practical effect is that activist investors, environmental groups, labor organizations, and other shareholders would lose a major tool for influencing corporate behavior. Right now, even if a proposal doesn't pass, the fact that it's included in proxy materials forces companies to take it seriously and respond to it publicly. Under this bill, companies could simply refuse to include proposals they don't like, making it much harder for shareholders to push companies on issues like climate change, diversity, executive compensation, or workplace conditions. This would particularly affect large institutional investors like pension funds and mutual funds that use shareholder proposals to advocate for policy changes.

The bill also includes language saying that states cannot regulate shareholder proposals or proxy materials either, which would prevent states from stepping in to fill any gap left by federal rules. Supporters argue this gives businesses more freedom from what they see as activist interference, while critics contend it removes an important democratic mechanism that allows shareholders—the actual owners of companies—to have a say in how their investments are managed.

Businesses Over Activists Act

Rep. Norman, Ralph [R-SC-5]

<p>This bill prohibits the Securities and Exchange Commission (SEC) from compelling a publicly traded company to include a shareholder proposal or a&nbsp;discussion of a proposal in a proxy statement. Under current SEC rules, certain qualifying shareholder proposals must be included on a company's proxy statement. Proxy statements are provided to shareholders before shareholder meetings and contain disclosures required by the SEC.</p>