1. Strategic Purpose
A shareholder resolution forces a specific issue onto the ballot at a company's Annual General Meeting (AGM). Even if the resolution does not pass (receive >50% vote), the filing process compels the Board to negotiate.
- Goal: Force disclosure of human rights risks or demand a specific audit.
- Success Metric: Often, a "withdrawal" is a win. Companies will often agree to your demands in exchange for you withdrawing the resolution to avoid public embarrassment.
2. United Kingdom (Companies Act 2006)
The Legal Mechanism: Section 338
Under s.338 of the Companies Act 2006, shareholders can require a company to give notice of a resolution to be moved at the AGM.
Eligibility Thresholds (The "100 or 5%" Rule)
To file a resolution, you need EITHER:
- 5% of Total Voting Rights: Investors holding 5% of the total voting shares. (Difficult for activists alone).
- 100 Shareholders Rule: At least 100 shareholders who hold shares on which there has been paid up an average of at least £100 per member.
- Strategy: This is the activist route. Mobilise 100 supporters to buy £100 of shares each.
Timeline & Process
- Drafting: Draft a resolution (usually an "Ordinary Resolution" requiring 50%+ to pass) asking for a "Human Rights Impact Assessment."
- Submission Deadline: Must be received at least 6 weeks before the AGM.
- Cost: Under s.338, shareholders usually have to pay for circulation costs UNLESS submitted before the financial year-end. Always aim to submit before the financial year-end to force the company to pay circulation costs.
- Supporting Statement: You have the right to include a statement (up to 1,000 words) explaining the resolution (Section 314).
Key Obstacles
Nominee Accounts: Most retail investors hold shares via apps (Hargreaves Lansdown, Freetrade). These are "beneficial owners," not "members." You must get "Letters of Representation" from the broker or move shares to a direct certificated account.
3. United States (SEC Rule 14a-8)
The Legal Mechanism: Rule 14a-8
This SEC rule allows shareholders to include a proposal in the company's proxy statement.
Eligibility Thresholds (Updated 2024)
To file, you must have continuously held:
- $2,000 of stock for at least 3 years; OR
- $15,000 of stock for at least 2 years; OR
- $25,000 of stock for at least 1 year.
Timeline & Process
- Submission Deadline: Must be received at least 120 days before the anniversary of the release of last year's proxy statement. (Roughly 6 months before the AGM).
- Proof of Ownership: You need a letter from your broker verifying continuous ownership for the requisite period.
- No-Action Letters: The Company will likely write to the SEC asking for permission to exclude your proposal (a "No-Action Request"). You must be prepared to hire legal counsel to write a rebuttal to the SEC defending your proposal.
The "Ordinary Business" Exclusion (Rule 14a-8(i)(7))
Companies often argue human rights are "ordinary business."
Counter-Argument: You must argue that the issue raises a "Significant Social Policy Issue" that transcends ordinary business. The SEC generally recognizes human rights issues in occupied territories as transcending ordinary business.
4. Template Resolution Text (UK & US)
RESOLVED:
Shareholders request that the Board of Directors commission an independent third-party report, at reasonable cost and omitting proprietary information, assessing the effectiveness of the Company's human rights due diligence regarding its operations and supply chain in Israel and the Occupied Palestinian Territories.
SUPPORTING STATEMENT:
[Company Name] operates in a sector with high exposure to human rights risks. International bodies, including the ICJ, have flagged severe risks of genocide and war crimes. Current due diligence appears insufficient to mitigate legal, reputational, and financial risks... [Insert evidence from Phase 1 Risk Framework].
Last updated: January 2026