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

37 Pages Posted: 25 Jun 2012 Last revised: 6 Jul 2012

See all articles by Sarah Wilson

Sarah Wilson

Manifest Information Services; European Corporate Governance Institute (ECGI); International Corporate Governance Network

Paul Hewitt

Manifest Information Services Ltd

Date Written: June 25, 2012

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.

Keywords: Proxy Advisor, corporate governance, ISS, institutional investor, shareholder vote, regulators, analyst objectivity

JEL Classification: G32, G34

Suggested Citation

Wilson, Sarah and Hewitt, Paul M. S., ‘An Overview of the Proxy Advisory Industry, Considerations on Possible Policy Options’: Manifest Responds (June 25, 2012). Available at SSRN: https://ssrn.com/abstract=2091016 or http://dx.doi.org/10.2139/ssrn.2091016

Sarah Wilson (Contact Author)

Manifest Information Services ( email )

9 Freebournes Court
Newland Street
Witham, Essex CM8 2BL
United Kingdom
+441376503500 (Phone)
+441376503550 (Fax)

HOME PAGE: http://www.manifest.co.uk

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

International Corporate Governance Network ( email )

London W1B 1AH
United Kingdom

Paul M. S. Hewitt

Manifest Information Services Ltd ( email )

9 Freebournes Court
Newland Street
Witham, ESSEX CM8 1TH
United Kingdom

HOME PAGE: http://blog.manifest.co.uk

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