The main task of a proxy or voting advisory firm is to analyse resolutions that are put to shareholders to vote, such as financial statements, director appointments, CEO remuneration, ESOP plans, M&A transactions, and more, by providing data and independent voting recommendations to investors.

We have now reached towards the end of the FY25 India voting season - the four-month period between June and September - when most listed companies in India hold their annual general meetings (AGMs). As expected, this is the busiest time of the year and often brings with it, brickbats, and criticism. While most companies voice concerns privately, a few air such grievances publicly, and in rare instances we face lawsuits or police complaints.

Critics argue that proxy advisory firms apply criteria that often differ from local regulatory requirements, leading to a lack of uniform recommendations across firms. Additionally, over time, institutional investors have increasingly “outsourced judgment” to proxy advisors, allowing them to overstep their advisory role. Such criticism, however, reflects the growing pains of a maturing market infrastructure rather than fundamental flaws with proxy firms themselves. More often these arise from a misunderstanding of the role proxy advisory firms play, overlooking the rapid evolution of our markets.

Why do proxy firms matter more than ever in India’s governance journey. Read our blog here.