NACD Library

Director FAQ: The Role of Proxy Advisory Firms

Director FAQ: The Role of Proxy Advisory Firms Cover
Publication Date: October 12, 2017
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In brief: The proxy advisory firm industry has grown substantially over the last three decades, and their increasing influence over corporate-governance matters and sharehold­er votes has become highly controversial. This Director FAQ explains the growth of the proxy advisory firm industry, the main players in the market, their voting policies, and how issuers can engage proxy advisors regarding their voting recommendations.

This resource can help your board to

  • understand how institutional investors use proxy advisory firms;
  • determine how proxy advisors formulate their voting policies, and which of those policies might lead to a no-vote recommendation for your company; and
  • create a plan for when to engage with major shareholders and proxy advisory firms and on what issues.

Most relevant audiences: board chair, lead director, committee chairs, CEO, and head of investor relations