Custom Proxy Voting Advice
Institutional investors play a crucial role in corporate governance, yet the process by which they arrive at voting decisions remains opaque. Our recent research opens the “black box” by highlighting the significant role of customized proxy voting advice in shaping shareholder voting behavior. Traditionally, academic research and policy debates have centered around benchmark recommendations provided by […]
Edwin Hu is a Research Fellow at the NYU School of Law’s Institute for Corporate Governance & Finance, Nadya Malenko is a Professor of Finance at Boston College, and Jonathon Zytnick is an Associate Professor of Law at Georgetown University Law Center. This post is based on their recent paper.
Institutional investors play a crucial role in corporate governance, yet the process by which they arrive at voting decisions remains opaque. Our recent research opens the “black box” by highlighting the significant role of customized proxy voting advice in shaping shareholder voting behavior.
Traditionally, academic research and policy debates have centered around benchmark recommendations provided by proxy advisors like ISS and Glass Lewis. The dominance of these two firms has raised concerns about their influence over corporate governance. However, our study, using novel data from Glass Lewis, reveals that the majority of funds (around 80%) actually receive customized advice tailored to their specific needs.
