[It has been two months since my last post; not that things of interest did not occur, but rather the pace of business, my publication of another book (my eleventh, written with my son Peter, entitled Honig & Son, is available on Amazon) and a birthday vacation to San Juan all conspired to secure my silence.]

Note first that the SEC now has only one Democratic Commission member which means, conversely, that the Republicans are fully in charge.  It is no secret that the tendency of the current Republican consensus is to regulate business less.  Consistent with this tendency, the SEC announced yesterday that it would no longer review requests from public companies relating to their proposed refusal to bring shareholder resolutions to a vote.  In the past, companies typically requested assurance, based on stated facts, that the refusal to bring nonbinding policy matters to a vote (usually involving social issues, the environment or the like) would not run afoul of SEC action.

The effect is that companies will be free to proceed without checking with the SEC– that was always the case, but readers of the tea leaves see this announced policy a evidence of a permissiveness by the SEC and a willingness to rely on corporate judgment.

There is a caveat suggesting questions under Delaware law touching on nonbinding proposals may be answered by the SEC, but that if a reporting company gets a legal opinion that the proposal is not “proper” under Delaware law then that judgment will prevail.  If you find the Delaware situation a bit confusing, you likely are correct.

Needless to say, the sole Democratic SEC commissioner stated yesterday that  this policy was “an act of hostility toward shareholders.”  The historic tension between Republicans and Democrats on the SEC Commission continues unabated, and since the President controls appointments the general views of the administration in power continues to filter down to SEC policy.