For more than two decades, the National Legal and Policy Center (NLPC) has positioned itself as a prominent conservative watchdog challenging what it sees as the growing politicization of corporate America. As director of the organization’s Corporate Integrity Project – an initiative that uses shareholder proposals and public campaigns to target corporations it believes are adopting excessively progressive policies – Paul Chesser embodies that mission.
A former journalist with nearly 25 years in the conservative nonprofit sector, Chesser has led NLPC’s expanded shareholder activism program since 2021, submitting between 20 and 25 proposals annually to major US corporations, efforts he describes as essential to holding both companies and public officials accountable.
Under his direction, NLPC has become increasingly visible in high-profile corporate governance battles. The group has pressed companies such as Walmart to revisit plastics and packaging policies, arguing that environmental commitments are being shaped more by ‘liberal agenda priorities’ than by scientific or economic analysis. NLPC has also mounted challenges to DEI frameworks at major corporations, a stance that recently drew national attention after The New York Times highlighted its proposal targeting chemicals company Merck, where Chesser argued that conservative activists are providing a needed counterweight to years of left‑leaning shareholder pressure.
Below, Chesser tells Governance Intelligence about how his journalistic background shaped his current approach to corporate priorities, why the SEC’s new administration appear more ‘company-friendly’ and how economic laws eventually prevail over any other factors.
Paul Chesser, director of Corporate Integrity Project at the National Legal and Policy Center
As director of the Corporate Integrity Project, how would you describe your core mission and day-to-day priorities?
My background is in journalism. I have been in a journalistic role for most of my career, including at our current organization, for about 13 or 14 years. Overall, I have been with the conservative-leaning think tank or nonprofit movement since around 2000, so about 25 or 26 years.
The National Legal and Policy Center is not a typical think tank that produces policy papers. We function more as a Watchdog. We have a government watchdog component where we try to hold elected and appointed officials accountable with regard to ethics. The counterpart to that is the Corporate Integrity Project, which I have managed full time since 2021. This year will be our fourth year running a very ambitious shareholder proposal program. We submit anywhere from 20 to 25 proposals a year, mostly to major US corporations. We do not operate outside the US.
Going back to around 2000, before I came on full time, our chairman would submit one or a couple of shareholder proposals a year when he saw a specific need or issue. We have been doing this a long time, just not at the scale of the last four years.
Our mission is to hold companies accountable on a range of issues. It is not purely political, although there is a political component. Over the last 10, 15 or 20 years, we have seen political activists use various levers of influence to gain power and shift policy. That has happened in electoral politics, academia and the media. The political left has also used corporate shareholder activism effectively.
That intensified in 2020 with the George Floyd riots, COVID and the Georgia election law debate. Companies became far less reluctant to weigh in passionately on one side of divisive issues without recognizing that they serve a broad customer and shareholder base.
Take the Georgia election law in 2021. Major companies, including Major League Baseball, moved the All-Star Game out of Atlanta after President Biden called the law ‘Jim Crow 2.0’. Atlanta-based companies like Coca-Cola, Delta Air Lines and UPS rushed to condemn the law. Since then, Georgia elections have seen greater participation than before the law was enacted.
I live in the Charlotte, North Carolina area. In 2016, North Carolina passed what became known as the transgender bathroom bill. It said businesses could set their own restroom policies, but public facilities had to designate restrooms by birth sex. That was sensationalized and distorted. Corporate America supported a boycott of the state to pressure lawmakers. Now, nearly 10 years later, the debate over transgender issues has shifted significantly, including around medical research and treatment standards.
Our view is that companies should stay out of deeply divisive politics as much as possible. They serve everyone and should focus on treating all customers with respect while maximizing returns, income and sales. It is not in their fiduciary interest to divide their customer base.
Because companies moved strongly in one direction, we pushed back. We challenged their transgender policies, including alignment with groups like Human Rights Campaign, to point out that there are other perspectives and evidence.
This extends beyond social issues to climate change, energy and environmental policy. For example, we have submitted plastics-related proposals at companies like Walmart and Colgate-Palmolive and plan to file more at Home Depot and Mondelez International. We argue that companies have embraced alarmist perspectives, including those promoted by the Ellen MacArthur Foundation, without fully considering broader scientific research. We ask them to review their positions based on objective, university-level research.
What originally drew you to corporate governance and shareholder activism work?
I joined the National Legal and Policy Center around 2010 or 2011 on contract. I was doing research and writing for the website, much of it related to the Obama stimulus program and green energy funding. I wrote about Elon Musk and Tesla when Tesla was getting off the ground and had received significant government loans.
Over time, I wrote regularly for the organization. After 2016 or 2017, I shifted more toward corporate-focused work, including big tech, privacy rights and issues involving Apple and China.
When our chairman, Peter Flaherty, decided to expand the Corporate Integrity Project beyond handling it himself, he wanted someone full time. It was a natural progression for me, although there was a steep learning curve. In 2022, our first major year, we submitted 30 proposals. We succeeded in getting almost all of them onto proxy statements. Many were governance-focused, such as disclosure of lobbying expenditures and independent chair policies. We are returning to independent chair proposals this year.
From your perspective, what are the most pressing governance challenges facing major US corporations today?
Right now, I think the SEC is central. Chairman Atkins’ recent decisions and leadership approach appear more company-friendly. In a speech in Delaware last fall, he suggested companies could seek exclusions of shareholder proposals under Delaware law as improper subjects.
I submitted preemptive letters to companies and to the SEC explaining why our proposals were proper subjects under Delaware law. Some companies responded that they had not planned to pursue exclusions on that basis anyway.
We also lost access to the SEC’s electronic dissemination system for smaller shareholders with under $5 mn in holdings, which makes it harder and more expensive to communicate with fellow shareholders.
The Division of Corporation Finance has said it will only render no-action opinions on narrow state law grounds. Previously, companies would notify us of their intent to exclude and we would wait 60 to 80 days for a no-action decision. Now companies notify us of exclusion, but there may be no opinion. That creates a longer window in which proponents could seek injunctions in court.
The Division of Corporation Finance also hired a leading corporate governance lawyer from Gibson, Dunn & Crutcher. To me, putting a former corporate defense lawyer in that role creates an imbalance.
When I asked SEC officials whether there had ever been enforcement actions tied to no-action decisions, neither could cite any. The process effectively operates on an honor system. If a proposal is excluded, the proponent must sue. That raises questions about how the system evolved.
How do you view the role and influence of proxy advisory firms in corporate governance today?
I initially tried to ignore proxy advisory firms, but that is not realistic. Major firms like ISS and Glass Lewis have significant influence, and neither is US-based. That raises concerns about foreign influence in US corporate governance.
Companies can use as many words as they want in the proxy to argue against our proposals. We are limited to 500 words. We used to supplement that through the SEC’s electronic system to provide detailed research. When proxy advisors review proposals, we hope they assess them objectively.
There have been instances where they supported us. A few years ago at Goldman Sachs, they endorsed our independent chair proposal and it received nearly 40 percent support. Without that endorsement, our proposals often receive single-digit support.
State treasurers and pension officials frequently rely on these firms because they lack the staff and time to analyze every proposal. Even conservative officials use them. That suggests their influence remains strong, even amid political pushback.
For example, we submitted proposals to eliminate DEI incentives in named executive officer compensation. We received low support, but this year many companies removed those incentives anyway. This year, we submitted proposals to remove DEI language from board candidate considerations. American Express agreed to eliminate that language. Colgate-Palmolive did not. Responses vary by company.
How do you see the relationship between ESG advocacy and fiduciary duty?
I believe it is highly disputed whether ESG improves financial performance. ESG advocates cite studies, but others have challenged those findings.
Our first year focused on governance proposals, yet some media labeled them anti-ESG because of who we are. When other proponents submit similar governance proposals, they are not labeled that way. Governance should stand on its own merits.
On environmental and social issues, consider the push for net-zero commitments by large banks and asset managers. We ask companies to demonstrate, on a fiduciary and scientific basis, that these commitments are viable and economic. We often see advocacy reports rather than objective evidence.
We have criticized electric vehicle policy since my early days with the organization. Battery technology, infrastructure and economics have not supported rapid transitions. When companies like General Motors, Ford Motor Company and Stellantis committed heavily to electric vehicles, we warned it was a mistake. Since then, there have been billions of dollars in write-offs.
We believe many ESG-driven decisions lack objectivity. Corporate leaders often appear guided more by ideology and emotion than by economic fundamentals. Economic laws eventually prevail.
What role should regulators play in overseeing corporate governance practices?
There has to be some threshold for shareholder participation. In the US, shareholders have speech rights and property rights. A shareholder with a reasonable holding should be able to present views to the company and fellow shareholders without excessive barriers.
The tiered system, such as $25,000 for one year, $15,000 for two years or $2,000 for three years, reflects commitment. That seems reasonable.
Compare that to an activist investor who buys millions of dollars in stock in Walt Disney Company to run a board campaign, then sells after the campaign ends. It is not clear that this is more responsible than a small shareholder who has held a few thousand dollars’ worth of stock for years and wants long-term returns.
We see an imbalance at the SEC, especially with only three commissioners who are ideologically aligned. There is no opposing voice. That creates inequity in how governance decisions are made.