Sister Nora Nash, a Franciscan nun from the Philadelphia area, spent the last 15 years pushing corporations to change their policies on guns, tobacco and fracking. As a shareholder, the sisters’ retirement fund has filed hundreds of proposals at companies from Chevron Corp. to Wells Fargo & Co.

She might not be able to do that kind of activism anymore if the U.S. Securities and Exchange Commission goes ahead with a plan to limit proposals from small investors like the fund, which often hold just a few thousand shares out of hundreds of millions. The agency last week proposed higher ownership thresholds for submitting proposals and a higher bar to resubmit ones that fail.

Companies have said that frequent proposals from small investors can be a costly drain on management’s time. But Nash said she hears a different response as well.

“I can think of several companies that have said ‘thank you’ for helping them to address human rights, or the rights of the community,” she said, saying she’s disappointed in the SEC’s proposal. “We’re helping corporations to realize that they can improve.”

Nash and her community — the Sisters of St. Francis of Philadelphia — have taken a vow of poverty but maintain a small investment portfolio to support health care for elderly nuns. The shareholder-proposal process has been one of their most effective ways to hold companies accountable, said Nash, the order’s director of corporate social responsibility. “This tool has given us a voice,” she said.

Companies, led by Washington trade group the Business Roundtable, have told the SEC that the process needs to be streamlined to reduce the number of proposals submitted and resubmitted. This would mostly affect small shareholders, because large asset managers historically have avoided shareholder proposals, preferring closed-door “engagement” meetings with executives and boards.

Under the SEC’s plan, before submitting a proposal, shareholders with just $2,000 of a company’s stock would need to be invested for three years instead of just 12 months as currently required. The commission’s plan would also raise the thresholds for resubmitting proposals that fail. A shareholder would need at least 5% support on their first try in order to try again on the same topic within five years, 15% support on the second vote in order to call for a third, and 25% support the third time around in order to seek a fourth vote.

The proposals are open for a 60-day comment period, so commissioners may hold a second vote on them next year after considering public feedback.

Those new thresholds would significantly change the process, according to a review of 3,600 proposals at Russell 3000 companies by the Council of Institutional Investors. About 12.1% of proposals between 2011 and 2018 would have been excluded from corporate ballots after a shareholder’s first attempt, compared to 5.2% under the existing thresholds. After a second attempt, 24.1% would have been excluded, up from 8.8% with the current thresholds, the council said.

Fiona Reynolds, chief executive of the UN-backed Principles for Responsible Investment, says she views the SEC’s proposal as an attack on shareholder rights. “You can’t take shareholders’ money then say they have no say,” Reynolds said. “It often takes decades for some of these issues shareholders raise to get traction, but it’s important to get started and send a signal to companies.”

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