Proxy advisors provide research on corporate governance issues. Their mainstay service is providing voting recommendations on shareholder resolutions to institutional investors.
Proxy Advisors are entities which research and give opinion/recommendations to investors, generally institutional investors, on agenda items that get presented to shareholders for vote. They came into existence when the regulators pushed institutional investors to exercise their voting rights.
However, Proxy Advisors have managed to establish themselves as an indispensable force in the capital markets. Even though the progress they have made in being the driver of better corporate governance practices till now is commendable, there is a long and challenging road which lies ahead of them. However, to bring a palpable change, proxy advisors will need support of the investors, regulators, companies, and other stakeholders.
To discuss the challenges that are faced by proxy advisors and their evolving relationship with asset managers, National Stock Exchange (NSE) and Institutional Investor Advisory Services (IiAS) collaborated to host a roundtable, on 24 March 2021, between proxy advisors and some institutional investors.
This CIO Dialogue with Proxy Advisors was moderated by Sandeep Parekh. Sandeep Parekh is the founder Finsec Law Advisors, Mumbai and chaired the SEBI Working Group on Issues of Proxy Advisors.
The key takeaways from this dialogue are available in our report here.