Why Shouldn't the SEC Silence Shareholders?

A reply to Rothstein and Flaherty

In today’s WSJ, an odd political pairing—Steven Rothstein of the left-leaning Ceres climate change group and Peter Flaherty of the right-leaning National Legal and Policy Center—come together to argue against the mere possibility that the SEC may cut back on the shareholder proposal rule (SEC Rule 14a-8). Both Ceres and NLPC are active users of the shareholder proposal rule. In 2025, for example, NLPC submitted proposals at 28 companies, most being anti-DEI. As for Ceres, it’s been a major player in this space since at least 2015, mainly pushing climate disclosure proposals.

As they acknowledge, the SEC has not yet moved to significantly restrict the use of the rule by shareholders, but they are so freaked by the mere possibility that they joined hands to argue against any changes. The problem is that their arguments are full of holes. They range from errors to being outright misleading.