All six major proxy voting advisers are meeting best practice industry standards but there is room for improvement, according to an annual report released Thursday by the Independent Oversight Committee.
The 12-person committee created last July includes international representatives of public companies, investors and the academic community.
This inaugural assessment of how the proxy advisory firms adhere to industry best practices will now be done annually.
"With environmental, social, and governance (ESG) issues front and center as never before, proxy advisers are a vital information resource for shareholders who decide the fate of director elections and corporate strategies worldwide," said Independent Oversight Committee Chairman Stephen Davis, senior fellow in corporate governance at Harvard Law School in an IOC release. "This first independent evaluation of their compliance with best practices aims to support and advance standards of accuracy and responsiveness that investors, companies and regulators expect."
The top proxy-voting advisory firms serving institutional investors are EOS at Federated Hermes, Glass Lewis, Institutional Shareholder Services, Minerva, PIRC and Proxinvest.
The IOC analysis is based on the proxy firms' own compliance statements reporting on how they comply with the latest industry prices and best practices. Therinciples were first adopted in 2019.
Next up for IOC is a survey of stakeholder views on the proxy voting research and advisory industry, with findings to be released in early October. Those results could lead to possible updating of the principles, the IOC release said.