Maria Ghazal is general counsel of Business Roundtable.

It’s becoming an all-too-frequent occurrence at publicly traded companies: An investor holding just a few shares of stock puts forward a shareholder proposal that’s only tangentially related to the company’s operations or strategy. And if it secures even just a few votes, it can be reintroduced year after year.

These investors claim to be exercising “shareholder democracy” — a smart marketing term, perhaps, but not responsible stewardship. The reality is that shareholders are taking advantage of an outdated governance process to advance special interests. This costs companies tens of millions of dollars and countless hours of time, which diverts resources focused on creating long-term value for their shareholders.

Governed by the Securities and Exchange Commission, the shareholder proposal process is intended to foster good corporate governance by facilitating shareholder actions at a company’s annual meetings. But because certain provisions have not been updated for nearly two decades, the SEC rule enables a small number of investors with a trivial stake in a company to co-opt the process.

How do these shareholders gain such leverage? Thanks to the decades-old rules unadjusted for inflation since 1998, a shareholder needs to hold only $2,000 worth of a company’s shares or 1 percent of its outstanding shares — whichever is less — to submit a proposal. Today, an investor who buys just three shares of Alphabet, Google’s parent company, would be free to file a proposal after one year.

Last year, for example, the most prolific shareholder proposal proponents were not large institutional investors who are economically-focused, but rather only a handful of investors who own only nominal amounts of stock. In fact, about 70 percent of all proposals submitted by individuals to Fortune 250 companies came from just three investors and their families. Given that the focus of such proposals is rarely related to the creation of long-term shareholder value, it is unsurprising that nearly 92 percent of them failed last year.

To be clear, not all proposals lack merit. The process is an important means by which shareholders can raise serious issues with companies. The challenge is that the process no longer consistently serves the purpose for which it was established. Last year, the Business Roundtable, a group of chief executive officers of major U.S. corporations, recommended specific, modest changes to modernize the rule to work better for shareholders and companies:

●Update the eligibility requirements for submitting a proposal based on a sliding scale related to a company’s size.

●Increase the length of the holding requirement from one to three years.

●Require proponents of shareholder proposals to provide increased disclosure, such as indicating their intentions, economic interests and holdings in the target company.

●Raise the re-submission threshold for proposals that have been rejected in previous years.

Critics of these proposals, such as Boston University law professor David H. Webber, have condemned the changes as “corporate voter suppression.” But in his recent Post op-ed, Webber also admitted that the shareholder proposal rules are not perfect and that “certain revisions might be worth considering.”

Today, public companies are doing more than ever to be responsible, including reporting on a wide range of environmental, social and governance issues and engaging with shareholders and other stakeholders. Most companies welcome such dialogue, which can provide directors and management with good ideas and valuable feedback.

Reforming shareholder proposals could enable companies and shareholders to focus on the issues that really matter to long-term performance: a company’s business plans, its investment strategy and its future in a dynamic marketplace. This is essential to creating long-term value, good-paying jobs and innovative products and services — the underpinnings of a sound economy.