The Proxy Advisory Playbook Is Being Rewritten and Companies Aren't Ready

2026-07-13 — stakeholder management consulting

I watched a CFO explain her proxy strategy last month. It was the same approach she'd used for five years.

That's not going to work anymore.

For the past decade or so, the proxy advisory world ran like a vending machine. File your proxy, ISS and Glass Lewis stamp it with their benchmark policy, institutional investors follow the recommendation, vote happens. You could basically predict the outcome in January. Plug in your numbers, read the policy, done. Most companies still think like that.

Glass Lewis announced last October that it's scrapping the single benchmark model entirely by 2027. Instead they're moving to what they call AI-enabled, client-customized voting frameworks. That's consultant-speak for: each investor now gets their own research that matches what they actually believe in, not what a template tells them to believe. ISS is keeping the benchmark label, but they're also offering two separate governance research tracks now, which means large investors can kind of pick their own adventure. The Harvard Law School Forum on Corporate Governance ran the numbers this past June and basically said the vote landscape just got a lot messier and a lot harder to predict.

Hard to predict.

The real wake-up call arrived in January when JPMorgan Chase's asset management division said they were walking away from proxy advisors entirely. Not scaling back. Walking away. They described themselves as the first major investment firm to do this completely. Since then, a few other large asset managers have quietly built internal voting tools, sometimes with AI, that don't even touch ISS or Glass Lewis. When the firms that used to control the vote no longer care what ISS thinks, your entire playbook becomes decorative.

Engagement Used to Be a Spring Thing. Now It's Your Job.

I've been talking to governance consultants—and actually, that's not quite right, I've been listening mostly while they tell public company boards what they don't want to hear. The message is consistent: direct investor engagement isn't something you do in March anymore. It's a year-round operation. It's not optional.

Here's the math. If you had one hundred institutional investors all following the same ISS benchmark, you really only had to persuade maybe three key ones. Now you have a hundred investors applying a hundred different frameworks. You're not managing a policy decision anymore. You're managing a hundred different conversations about what each investor cares about, and you have to have those conversations before your proxy statement hits their desk, not after.

Skadden released an analysis earlier this year that basically demolished the old model. Companies can't rely on historical voting patterns anymore. They can't assume "this policy passed last year, it'll pass this year." Vote results now depend on issuer-specific facts, on whether your strategic story actually holds up, on the order in which you talk to people. A company that schedules two investor calls in March and thinks they've done governance?

They're in trouble.

Some of this fragmentation is political, obviously. The Trump administration signed an executive order in December directing the SEC and FTC to look hard at ISS and Glass Lewis and what they're actually doing. That added regulatory pressure to what was already becoming a pull between investors. US and European asset managers had been disagreeing about sustainability and fiduciary duty for years. Glass Lewis came out and said that publicly—they couldn't make a single policy work for investors who fundamentally disagree about what governance even means.

The benchmark era was always kind of a comfortable lie, if I'm honest. It let companies think that checking boxes on a policy template was the same as earning actual shareholder trust. It isn't. And the new structure makes that obvious. The companies that are already building continuous investor dialogue into their governance calendar are the ones positioned for what's coming. The ones waiting to see how the new ISS research tracks develop before they adjust?

They're waiting while the vote happens.