On November 9, 2026, the Council of the Corporation Law Section of the Delaware State Bar Association (the “DSBA”) released a white paper and discussion draft (available here) proposing amendments to the Delaware General Corporation Law (“DGCL”) that would establish a state corporate law regime to address stockholder proposals if the U.S. Securities and Exchange Commission rescinds Rule 14a-8 under the Securities Exchange Act of 1934, as amended.

The discussion draft proposes new Section 214 of the DGCL which would provide stockholders of large, publicly traded Delaware companies a statutory right to submit precatory (non-binding) proposals at annual meetings and have those proposals included in the company’s proxy materials. The amendments would take effect when rescission of Rule 14a-8 becomes effective. For more information on the SEC’s proposal to rescind Rule 14a-8, see our Debevoise In Depth – SEC Proposes to Rescind Rule 14a-8, Returning Focus to State Law.

Principal Features of the Proposal. The principal terms of the discussion draft are summarized below.

• Covered corporations and annual caps. The proposed regime would apply to Delaware corporations listed on a national exchange, subject to a five-year grace period following an IPO. At each annual meeting, stockholders collectively could present in the aggregate up to three proposals for corporations with market capitalizations of at least $100 billion, two for those with at least a market capitalization of $50 billion but less than $100 billion, and one for those with a market capitalization of at least $30 billion but less than $50 billion.

• Stock ownership and selection. A proponent would need to beneficially own at least $250,000 in voting capital stock individually, or at least $1 million together with up to nine co-filers, in each case held continuously for 365 days as of a date 30 days before the submission deadline. If more than the permissible number of proposals are submitted and not otherwise excluded, the eligible proponents (together with their respective co-filers) owning the greatest number of shares would be allowed, with ties broken by random selection determined by the company.

• Submission requirements. Proposals would need to be received at least 180 days before the anniversary of the prior year’s annual meeting (subject to adjustment if the meeting date is advanced by more than 30 days). Consistent with Rule 14a-8, the proposal and supporting statement together could not exceed 500 words. A stockholder could serve as a proponent or co-filer for only one proposal per annual meeting. Certain documentation and word-limit deficiencies would be subject to a 14-day notice and cure process.

• Exclusions and review. The discussion draft specifies procedural and substantive grounds for exclusion, including (i) excess length, (ii) failure to meet the ownership requirements, (iii) a proposal that expressly questions the character of a director nominee, (iv) a proposal that primarily seeks to redress a personal grievance, (v) a proposal that “no rational person would determine” is relevant to the company and (vi) certain repeat submissions receiving less than 15% support.

• Proxy materials. A company would have to include qualifying proposals in its proxy statement and on the proxy card. The company could include in its proxy statement its response or statement of opposition.

• Limited private ordering and opt-out. Companies generally could not expand or restrict the statutory process through their charters or bylaws. Following the initial five-year grace period, a corporation could opt out entirely with approval from each class and series of voting capital stock voting separately.

• Challenges to company decisions. A company would have 60 days after the submission deadline to notify proponents of its determinations. A proponent could challenge the determination in the Delaware Court of Chancery within 30 days after receiving notice.

Exclusive Mechanism. Section 214 would establish the exclusive mechanism for stockholders to submit precatory proposals for a vote, including where a stockholder solicits proxies using its own proxy materials. Accordingly, a precatory proposal that fails to satisfy Section 214’s requirements could not be brought to a stockholder vote, including in the context of activist campaigns and takeover contests, in which stockholders have historically sought advisory votes on strategic matters outside the Rule 14a-8 process. Companies with market capitalizations below $30 billion would be immune from precatory proposals.

Treatment of Binding Proposals. Binding stockholder proposals would remain outside Section 214. The white paper states that such binding proposals are only those expressly permitted by the DGCL, namely the election and removal of directors and the adoption and amendment of bylaws. It also notes that an “existing safeguard against misuse” already applies because Delaware case law holds that a bylaw may not interfere with the board’s power to manage the company’s business and affairs under Section 141(a) of the DGCL.

Next Steps. The Delaware Secretary of State and the DSBA are accepting comments on the discussion draft through January 8, 2027 through Delaware’s online comment portal. The Council has expressed particular interest in whether Section 214 would establish “satisfactory limits, clear requirements and a straightforward process for addressing precatory proposals.” Following the comment period, the Council will prepare a revised draft and, if approved by the DSBA, submit it to the Delaware General Assembly during its 2027 session.

Rule 14a-8 remains in effect unless and until its rescission becomes effective, and Section 214 would not apply before that time. Companies should therefore continue to plan for the 2027 proxy season under Rule 14a-8, notwithstanding the SEC staff’s decision to discontinue responding to no-action requests.

This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.