Proxy voting advisory and research groups continue to be more transparent about the way they operate, a new report shows.
Organisations supporting work to improve best practice had made improvements to the way they described their own quality assurance and voting policies.
All five signatories of the Best Practice Principles for Shareholder Voting Research (BPPG) had also made notable improvements to reporting in response to feedback.
This is the fourth year experts have reported on how the BPPG's Best Practice Principles are being applied. The analysis is compiled by members of the BPPG's Best Practice Principles Oversight Committee.
All five signatories continue to be compliant with all three Best Practice Principles and explain how they apply BPPG guidance in a way which is straightforward and easy to understand.
The BPP OC's 2025 annual report includes details of its own governance, including steps to further safeguard its independence, together with a record of actions during its fifth year of operations as well as four key areas are likely to draw BPP OC attention and action over the coming year: regulatory trends, signatory compliance, stakeholder feedback and enforcement aspects.
The Best Practice Principles for Providers of Shareholder Voting Research & Analysis were first developed and adopted voluntarily by the industry in 2014. The current version of the Principles was adopted in July 2019, with firms committing to first reports covering 2020. Under the Principles, signatories are to disclose information in annual compliance reports in service quality, conflict of interest avoidance or management; and communications policy.
The five BPPG signatories are EOS at Federated Hermes Limited, Glass Lewis, Institutional Shareholder Services (ISS), Minerva, and PIRC. They represent an industry that supplies institutional investors with corporate annual meeting voting research and analysis. Investors commonly use such information to help inform decisions on how to cast ballots at tens of thousands of shareholder meetings taking place each year for publicly-traded corporations worldwide. Each signatory released reports showing how they comply with the latest industry Best Practice Principles, adopted in 2019.
Independent BPP OC Chair Konstantinos Sergakis, Professor of Law at the University of Exeter, said: "In this highly politicized context, the BPP OC has both a responsibility and opportunity to continue to promote greater understanding of the corporate governance and proxy research and support services provided to professional investors by the shareholder voting research and voting advice industry. It is important to recognize the value of the services BPPG signatories provide to their clients, the providers of investment capital, and the respective roles and responsibilities of financial market participants in the process. The BPP OC can constructively contribute to communicating the facts and eliciting nuances relevant to policymakers and stakeholders globally."The BPP OC welcomes the further advances in openness achieved over the past year from BPPG signatories. I am confident that the monitored self-regulation model, as operated by the BPPG and the BPP OC, will stand out as a credible and long-lasting testimony to soft law initiatives, and will inspire many similar ones in the future."
The BPP Oversight Committee's purpose is to provide independent assessments of BPPG compliance reports, invite market views on BPPG signatories' performance against the Principles, and produce an annual report on whether the Principles and independent oversight are advancing stakeholder confidence in the proxy voting and research advisory industry.
