‘An Overview of the Proxy Advisory Industry, Considerations on Possible Policy Options’: Manifest Responds

Abstract

As shareholders increase their scrutiny of corporate disclosures, proxy ballots and increasingly withdraw support for management proposals, regulators are turning their attention to the role of information agents and intermediaries in the stewardship process in both Europe and North America. Proxy advisors research and advise on a range of corporate governance, environmental and social issues for (mainly) institutional investors. They are also said to be influential on voting outcomes. This paper presents a response to a recent regulatory 'discussion paper' from the European Securities Markets Authority, ESMA, raises questions about the current regulatory approach to proxy advisors and makes some suggestions for greater objective scrutiny of the issue. Consistent with other acadmic research and press reports, the paper questions the desirability of focusing on the role of information intermediaries at the expense of the investment fiduciaries.