|
Glass Lewis already offers custom voting recommendations to
clients. Last year it suggested shareholders vote against
ExxonMobil’s lead independent director over the oil major’s
handling of an activist campaign © Reuters
|
Alexandra White
in
New
York
Published
OCT
14
2025
US advisory
firm Glass
Lewis said
it would
stop issuing
single voting
positions on
proxy issues
and instead offer
multiple
perspectives to
clients, after
facing criticism
from Republicans
over diversity and
environmental criteria.
Starting in
2027, Glass
Lewis will
offer recommendations
based on views that
are oriented
towards management,
governance, activism or
sustainability.
“We recognise
that a
single perspective
is no
longer sufficient,”
Glass Lewis
said in
a position
paper seen by the Financial
Times on Tuesday.
“Transitioning to
a fully
client-driven policy
model will ultimately put all proxy
voting control in the hands of shareholders, empowering them to
vote in accordance
with their specific beliefs and priorities.”
The firm's
move follows
a similar
decision by
the other major
proxy advisory
business,
Institutional Shareholder Services. Earlier
this month, ISS
introduced governance research services that do not include voting
recommendations and provide
customisable data, analysis
and recommendations to its
clients.
Glass Lewis
said one
of the
primary drivers
of the
shift was
the "growing
divergence”
between American and
European institutional investors
who have
taken different
approaches to fiduciary duty
and sustainability. European clients already rely more on thematic
policies rather than benchmark views.
Glass Lewis's
new voting
practice comes
as proxy
advisers have
become increasingly scrutinised by public
companies and Republican officials over prioritising matters related
to environmental, social and
governance, and diversity, equity
and inclusion. Glass Lewis
and ISS are
both suing Texas over a
state law
that limits the guidance that proxy advisers can give to shareholders on corporate governance, diversity and environmental
practices.
The proxy
adviser's latest
move could
blunt some
of the
criticism that
it provides “ideologically
driven”
recommendations as
it moves to give clients more
choice to vote
in line with their
own beliefs and priorities.
Glass Lewis
already offers
custom voting
recommendations to
clients but
ending its
benchmark guidance would push all
of its customers
under a custom framework.
“They seem
to trying to
transition clients to
develop more
specific policy
guidelines, which
not only takes
Glass Lewis out
of the
line of
fire but
also makes
more money
for Glass Lewis,”
said Ann Lipton, a
law professor at the
University of Colorado.
“I think
their ultimate
goal is
transition to the
more expensive
and profitable
business
model.”
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Limited 2025. All rights reserved.