In Georgeson's 2025 AGM Review we highlight some rapidly evolving changes in the global proxy advisor and global institutional investor landscape that are still very much in play as we settle into 2026. This article provides further details based on available information at mid-February 2026. Further updates will be provided through our website and direct client communications as they unfold.
2025 updates to benchmark proxy voting guidelines
Starting with the ‘business as usual’ aspects of this topic, during 2025 the two major global proxy advisors, Glass Lewis and Institutional Investors Services (ISS), updated their ‘benchmark’ voting guidelines for Australian issuers companies as follows.
Glass Lewis
In August 2025, Glass Lewis updated its Benchmark Voting Policy for Australian listed companies on the following key issues:
- Core industry experience and board skills. Boards should contain at least one non-executive director (NED) with senior executive experience in the company’s core industry. Companies should clearly disclose skills, attribute each skill to specific directors and disclose assessment criteria.
- Executive remuneration. Where companies use time-based vesting in their incentive frameworks, the benchmark policy now expects transparent disclosure of the rationale, including relevant market benchmarks or strategy considerations. In addition, the total incentive opportunity should be suitably discounted to reflect the lower risk.
- Founder-led companies. Founders can play a critical role in a company’s success and often have substantial wealth tied up in the business, but companies also need to manage and mitigate governance risks. Glass Lewis guidance will balance up founder influence and independent oversight and consider whether governance structures adequately protect minority shareholders.
- Board oversight of Artificial Intelligence (AI). Glass Lewis has increased its expectations for board oversight of AI-related risks in a new section in the benchmark guidelines, outlining how GL will assess if boards have taken steps to oversee and manage AI-related concerns, including through disclosure, committee responsibilities or broader governance activity.
- Accountability for capital allocation. Directors may be held accountable where the use of capital through acquisitions, projects or restructures, has resulted in destruction of shareholder value. If there is no plan to replace lost value, GL may recommend against the board chair or a long-serving director.
ISS
Changes to ISS’s Australian Proxy Voting guidelines in 2025 included:
- Remuneration. The updates to remuneration guidance in 2025 specifically related to Long-term Incentive Plans (LTIs):
- Option exercise prices should not be at a discount to market price at the grant date – removes the words after ‘in the absence of demanding performance hurdles’.
- Regarding LTI vesting, the minimum accepted performance period is three years.
- Long-term incentives should not permit the re-testing of performance hurdles. In the case of new plans, as best practice, companies should not include re-testing provisions.
- Incentive plans should have appropriate malus and claw-back provisions.
- Gender balance. ISS will recommend a vote against or withhold from incumbent members of the nominating committee if the board is not comprised of at least 30 percent of under-represented gender identities.
- Climate risk mitigation and Net Zero. ISS will vote against the incumbent chair of the responsible committee (or other directors on a case-by-case basis) where:
- The company has set a medium-term target for reducing its GHG emissions but the target does not include scope 1, 2 and relevant scope 3 emissions, OR
- The company does not have a decarbonisation strategy in place, with a defined set of quantitative and qualitative actions to reach Net Zero targets.
- Social and environmental proposals. ISS will recommend a vote for disclosure reports that seek additional information particularly when it appears companies have not adequately addressed shareholders' social, workforce, and environmental concerns.
- Say on Climate management proposals. ISS will take account of the feasibility of a company’s short-, medium-, and long-term targets for reducing operational and supply chain GHG emissions in line with Paris Agreement goals (Scopes 1, 2, and 3 if relevant) – in addition to taking into account target rigour and completeness as previously.
Many of the AGM voting outcomes detailed in our 2025 AGM Review exemplify how these benchmark policy updates were put into practice at S&P/ASX300 during 2025.
More nuanced policies and customisations
Whilst the benchmark (or ‘house’) policies of the major proxy advisors (to which the above 2025 updates relate) have always attracted the most attention, both Glass Lewis and ISS have taken significant steps over recent years to introduce more optionality and customisation into their business models.
One example of this has been the introduction of ‘themed’ voting policies, allowing individual institutional investors to pursue their particular values or investment beliefs that may not suit a ‘one size fits all’ approach – for example, to prioritise sustainability/ESG considerations, religious beliefs, investment value or other perspectives.
A further extension on this theme is the ability for investors to develop their own custom proxy voting using the underlying data and administration capacity of the proxy advisor, such that the proxy advisor is essentially operating as an implementation specialist rather than as an originator of the voting decisions or recommendations.
This custom policy approach already reflects the way the very largest global institutional investors utilise proxy advisors, and this trend can be expected to expand further with the increasing scale and self-sufficiency of emerging institutional investors such as superannuation funds, as they bring in-house more resources and scale as active owners of shares and other investment assets.
But even with this greater emphasis on policy choices at the individual subscriber level, the benchmark or ‘house’ policies have continued to attract most of the public and media spotlight, and exposed proxy advisors to continued criticism from some quarters that they exercise an undue influence on companies, without themselves having any direct fiduciary responsibility or regulatory accountability.
From ‘recommendations’ to ‘perspectives’
Reflecting this tension, in October 2025, a significant step change occurred, with one of the two major global proxy advisors, Glass Lewis, announcing that – commencing in January 2027 – it will no longer be issuing ‘benchmark’ voting recommendations at all.1 Instead, Glass Lewis will offer its subscribers a range of four distinct “Research Perspectives” to consider when making voting decisions on specific company situations, as follows:
- Management-aligned: Mostly supports management and the board unless there are serious legal, accounting, or operational issues; governance best practice and ESG factors generally not considered.
- Governance fundamentals: Focuses on corporate governance and shareholder rights but will not generally consider ESG factors. Similar to the Benchmark Policy but lighter on oversight and ESG.
- Active owner: Reflects current Benchmark Policy/House view. Evaluates governance best practices and material risks, including financially relevant ESG factors. This is likely to be the default reference point for many subscribers.
- Sustainability: Emphasises E, S and G issues alongside governance practices, and aims to reflect ESG considerations where they are financially material. Probably similar to ESG Thematic policy.
As noted above, many very large global investors already mainly utilise custom voting policies, so this change by Glass Lewis will likely not affect them significantly. However, it is a different story for smaller investment firms and asset owners, who are more likely to have adopted one or other of the major proxy advisor’s benchmark policy as a default, or built a custom policy with relatively few material deviations from the benchmark.
Georgeson expects that many investors in this category may initially gravitate to the ‘Active owner’ perspective (being the closest equivalent to the current benchmark policy), but over time this will likely change as underlying investors evolve and articulate their own policies.
Major year-end political development
Then, to cap off an already increasingly complex proxy advisor landscape, on 11 December 2025, the US President signed an executive order aimed at increasing regulatory oversight of the proxy advisory industry, stating that the top firms often ‘advance and prioritise radical politically-motivated agendas.’2
This move comes against a background of perceived excessive influence of large investors and proxy advisors over the affairs of companies, particularly in the US.
ISS and Glass Lewis were already taking steps to review and update their guidelines in response to the Administration’s hostility to diversity and ESG programs – most notably regarding diversity and inclusion policies - and it is now expected that they will face regulatory pressure to make further changes in their business models, methodologies and research report parameters.
Asset managers’ policies are also morphing quickly
Meanwhile, echoing the same trends and facing similar political pressures, some of the world’s largest institutional investors have also taken steps to make their proxy voting and investment stewardship approaches less ‘monolithic’ and more accommodating of different preferences of their underlying stakeholders.
These initiatives have included the roll-out of ‘pass-through’ voting services , which allow investors in certain pooled funds to opt in to a program to direct the manager to vote their proportionate share of the pool in accordance with a voting policy that most closely reflects their own beliefs (e.g. ESG-focused, anti-ESG focused, religious, governance-focused), as opposed to all voting decisions being determined by the manager’s ‘house’ stewardship policy that has historically covered all investors.
Whilst the ‘house’ policies remain the default option for institutional investors, and still account for the vast majority of the proxy voting decisions at mega global managers such as BlackRock, Vanguard and State Street, those house policies are themselves being further split into distinct silos within the investment institution – for example with different voting policies and stewardship teams being established for passive vs. actively-managed funds, US vs. non-US domiciled investment product domiciles or between funds that do or do not have a specific sustainability focus.3
For some ASX-listed issuers who have multiple touchpoints with these large global investors, this raises the distinct possibility that over time, they will need to understand and engage with different teams within the same institutions, who may sometimes be approaching a particular voting or engagement issue from quite different perspectives.
A further significant departure from historical practices in the asset management sector has been a widely-reported decision in January 2026 by major US-based global asset manager JP Morgan Asset Management to cease its usage of any external proxy advisors and instead equip its investment stewardship team with a proprietary AI-driven research tool called Proxy IQ.4 This move provides a live example of a technological disruption thematic, on top of any policy or regulatory concerns over the roles and business models of specialist proxy advisors in general.
Looking ahead
Inevitably, the increasing fragmentation of the institutional investor and proxy advisor proxy voting ecosystem will make it more difficult for issuers to understand, anticipate and track many institutional investors’ voting intentions and rationales.
In many cases, companies’ Investor Relations (IR) teams are likely to require deeper analysis of their registers and conduct more targeted outbound engagement to understand the thinking of their investors and how or whether this can be referred back to an underlying house policy and/or specialised policy for a particular sub-set of the manager’s overall assets.
Aside from the clearly political and philosophical issues at play, there are a range of other factors that are likely to further shape the future company-investor engagement ecosystem globally. These include technology/AI advances in investor relations, disruption from new market entrants, and the increasing self-sufficiency of more institutional investors in their investment stewardship responsibilities. This latter phenomenon is especially evident in Australia, with the continued rise of industry superannuation funds as dominant players in capital markets and corporate transactions.
At the date of writing this report, it is too early to predict exactly where the complexities inherent in the above-described situation will eventually land. However, Georgeson recommends that clients remain alert to the rapidly changing landscape and factor these changes and potential ‘left field' scenarios into their investor and proxy advisor engagement plans in 2026.
Georgeson will be closely tracking developments as they unfold, and we will be at your disposal to assist you in navigating this changing landscape with evidence-based recommendations and expert guidance tailored to your specific situation.
1 Glass Lewis Leads Change in Proxy Voting Practices (News Release, 15 October 2025)
2 Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors – The White House
3 BlackRock’s overarching approach to stewardship | BlackRock; Proxy voting across Vanguard funds | Vanguard; Asset Stewardship | State Street
4 JPMorgan's asset management arm to end use of proxy advisers in US, memo shows | Reuters