Praxis Mutual Funds® submitted a letter to the SEC to oppose changes to Rule 14a-8 regarding procedural requirements and resubmission thresholds for proxy submissions and amendments to exemptions for proxy voting advice. Praxis Mutual Funds joined the Interfaith Center on Corporate Responsibility (ICCR) and other industry leaders in opposition to the rule changes.
“We strongly oppose the rules proposed by the Securities and Exchange Commission (SEC) on Nov. 5, 2019, which will severely limit the rights of shareholders to engage with corporations using the shareholder resolution process over issues with a distinct impact on long-term value,” wrote Chris Meyer, Manager of Advocacy and Research, Everence® Financial and Praxis Mutual Funds.
“As long-term investors who engage with companies on critical ESG issues, we believe that the proposed rules are unnecessary, and will undermine a corporate engagement process that has been of great value to both companies and investors.“
Everence Financial is a faith-based financial services company headquartered in Goshen, Indiana, whose mission is to help people integrate their faith and finances through investment, insurance, banking, and charitable products and services. Praxis Mutual Funds – the Everence mutual fund family with $1.6 billion of assets under management – practices corporate engagement to be good stewards of clients’ assets and their values.
“Rule 14a-8 has become an important, productive and well-honed process for the engagement of corporations around issues of broad stakeholder concern,” said Mark Regier, Vice President of Stewardship Investing for Praxis and a 20-year veteran of corporate engagement. “In particular, this process has been a vital and mutually beneficial channel for communicating values-based concerns which have laid the foundation for the modern CSR movement, and even the recent reinterpretation of a ‘stakeholder-centered’ purpose of the modern corporation being embraced by global companies and groups like the Business Roundtable. We wouldn’t be where we are today without it.”
Wrote Meyer, “We and many of our colleagues at other faith-based and socially conscious institutional investors use the shareholder proposal process to communicate with corporate management and boards. Praxis has filed numerous shareholder proposals on environment, social, and governance (ESG) issues. Many of these proposals have anticipated issues that were not yet seen as risks by the company or business community. We don’t take the act of filing proposals lightly, and we seek to file only when necessary to secure productive dialogue with the company. The shareholder proposal process has been an important means to communicate with the companies we hold.”
Meyer strongly urged the SEC to reconsider the proposed rules, “The current 14a-8 rule has worked well for decades, and there is no need to revise it.”