What is Proxy Advisory?

Learn about proxy advisory and how firms like Egan-Jones Proxy Services help investors, advisors, and other clients.

What is Proxy Advisory?

Proxy advisory refers to the services provided by specialized firms that offer research, analysis, and recommendations to asset owners and asset managers on how to vote on various corporate governance issues at shareholder meetings. These issues may include executive compensation, board elections, mergers and acquisitions, and environmental, social, and governance (ESG) matters.

The Importance of Proxy Advisory Firms

Institutional investors, such as mutual funds, pension funds, and asset managers, often hold shares in numerous companies. As a result, they are responsible for casting votes on a wide range of corporate governance matters. Due to the complexities of these issues and the sheer volume of voting decisions, institutional investors may lack the resources, expertise, or time to thoroughly analyze each proposal.

Proxy advisory firms step in to fill this knowledge gap, offering valuable insights and guidance to help investors make informed voting decisions that align with their fiduciary duties and investment strategies.

The Role of Proxy Advisory Firms

Proxy advisory firms conduct in-depth research and analysis on corporate governance issues and provide the following services:

Research Reports: These reports contain detailed analyses of upcoming shareholder proposals, company performance, and governance practices, providing investors with the necessary information to make voting decisions.

Voting Recommendations: Based on their research, proxy advisory firms offer voting recommendations that align with investors' investment strategies, policies, and best practices in corporate governance.

Proxy Voting Services: Some proxy advisory firms like Egan-Jones handle the administrative tasks associated with voting on behalf of their clients.

Policies and Guidelines: Proxy advisory firms can offer standard or tailored research and recommendations to meet the client's unique investment strategy and corporate governance philosophy.