Proxy Advisors
Proxy Advisors: Institutional Investors subtopic covering corporate governance principles, OECD guidelines, and ESG disclosure requirements.
Proxy Advisors: Institutional Investors subtopic covering corporate governance principles, OECD guidelines, and ESG disclosure requirements.
Proxy advisory firms — principally ISS (Institutional Shareholder Services) and Glass Lewis — provide institutional investors with research, analysis, and voting recommendations on matters submitted to shareholder vote.
Their influence on corporate governance is significant, as many institutional investors follow their recommendations in whole or in part. Proxy advisors assess board composition, executive remuneration, related party transactions, shareholder proposals, and increasingly ESG-related resolutions. Their voting policies and guidelines effectively set governance expectations for listed companies. Regulatory scrutiny of proxy advisors has increased, with the EU Shareholder Rights Directive II and SEC guidance establishing expectations for transparency, conflict management, and engagement with issuers.