Corporate Activism Crackdown: New Penalties for Directors Over Social Policy Actions.
This bill forces large corporations to focus strictly on profit rather than social or political goals. It introduces severe financial penalties, including treble damages, for directors and management who take actions unrelated to the company's financial interest, such as state boycotts or promoting specific ideologies. These changes empower shareholders to sue companies over social spending, increasing accountability for corporate leadership.
Key points
Large companies (over $20B market value) must avoid actions based on social policy (e.g., DEI, state boycotts) if they are not directly related to financial profit.
Directors and managers face personal financial liability (treble damages, no indemnification) for breaching fiduciary duties by engaging in social activism.
Shareholders are given procedural advantages to sue companies over non-pecuniary spending, especially if directors are linked to ESG funds or activist groups.
Expired
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