# Plain Language Summary: Stop Woke Investing Act

This bill limits how many shareholder proposals companies must include in their proxy materials—the documents shareholders receive before voting on company matters. Currently, companies can be required to include numerous shareholder proposals on topics shareholders care about. Under this bill, smaller companies would only have to include up to 2 proposals, mid-sized companies up to 4, and large companies up to 7 per shareholder meeting. The catch is that proposals can only be included if they have a "material effect" on the company's finances, which the bill defines narrowly to exclude proposals focused on environmental, social, political, or ideological goals unless they directly impact profits.

The practical effect is that shareholder activists—including pension funds, religious organizations, and other investors—would find it much harder to get their proposals in front of other shareholders. For example, if you own stock in a company and want to propose that it disclose its climate risks or improve labor practices, your proposal might be rejected as not "material" enough financially, even if many shareholders believe these issues matter to the company's long-term success. Companies would get to decide which proposals make the cut, and they only have to disclose their selection method to regulators, not justify their choices publicly.

This primarily affects large publicly traded companies and institutional investors who use shareholder proposals as a tool to influence corporate behavior. Individual retail investors would see fewer proposals on their proxy ballots. Supporters argue this reduces clutter and lets companies focus on financially relevant issues, while critics contend it silences investors who believe social and environmental factors are financially important and removes a key accountability mechanism for corporate management.

Stop Woke Investing Act

Biggs, Andy

Stop Woke Investing ActThis bill requires the Securities and Exchange Commission (SEC) to amend regulations to limit the inclusion of shareholder proposals in proxy statements. A proxy statement is provided to shareholders prior to a public company holding a shareholder meeting and contains information relevant to a shareholder vote. Under current SEC rules, certain qualifying shareholder proposals must be included on a company's proxy statement, including proposals that raise significant social policy issues.Under the bill, a shareholder proposal must have a material effect on the financial performance of the company to be included in a proxy statement. The bill also establishes a cap on the number of shareholder proposals required to be included in a shareholder meeting, depending on the size and type of the company. In addition, a proposal submitted by a member of the board of directors is prohibited from inclusion as a shareholder proposal.