Last week, the SEC Staff rejected Apple's request to exclude - based on Rule 14a-8(i)(7) (ordinary business) - a shareholder proposal to establish a human rights committee that included a board analysis pursuant to the new shareholder proposal guidance SLB 14I. We previously reported on Apple's submittal of that no-action request here ("New Shareholder Proposal Guidance: Apple Takes the Plunge").
Staff's responsive letter states:
We are unable to concur in your view that the Company may exclude the Proposal under rule 14a-8(i)(7). We are unable to conclude, based on the information presented in your correspondence, including the discussion of the board’s analysis on this matter, that this particular proposal is not sufficiently significant to the Company’s business operations such that exclusion would be appropriate. As your letter states, “the Board and management firmly believe that human rights are an integral component of the Company’s business operations.” Further, the board’s analysis does not explain why this particular proposal would not raise a significant issue for the Company. Accordingly, we do not believe that the Company may omit the Proposal from its proxy materials in reliance on rule 14a-8(i)(7).
This post from Davis Polk Counsel & Society member Ning Chiu notes this decision, as well as the grant of one other 14a-8(i)(7) exclusion request involving a climate change-related proposal that acknowledges Staff review of the board analysis, and a pending no-action request from Citigroup seeking to exclude a lobbying-related proposal based on Rules 14a-8(i)(7) and 14a-8(i)(5) (relevance), which also includes a board analysis pursuant to SLB 14I.
Stay tuned for more information on how the new guidance plays out as the proxy season unfolds, and access numerous practical resources and guidance on our Shareholder Proposals page here.