The Governance Landscape Has Changed. Investor Intelligence Now Matters More.

For many years, U.S. public companies could prepare for proxy season by relying on a relatively predictable set of reference points.

For most of my career, the framework for navigating that season was relatively stable. That predictability made planning possible. It is becoming less reliable.

Boards and management teams monitored the policies of the major proxy advisory firms, followed the SEC staff’s shareholder proposal no-action process, and assumed that large institutional investors would generally evaluate governance matters through familiar frameworks. Boards and management teams monitored the policies of the major proxy advisory firms, followed the SEC staff’s shareholder proposal no-action process, and assumed that large institutional investors would generally evaluate governance matters through familiar frameworks.

Although that environment has not disappeared overnight, it is changing in ways that are meaningful for issuers. Over the past year, regulatory practice around shareholder proposals has shifted. Beneficial ownership reporting has evolved. Proxy advisors are facing greater scrutiny from policymakers and regulators. At the same time, several large investors are building more customized internal approaches to proxy voting and stewardship.

The practical implication is straightforward: companies need a more current, more granular understanding of their shareholder base. In a market where voting policies, engagement expectations, and ownership signals are becoming less predictable and more investor-specific, boards and management teams are realizing that understanding who your shareholders are and how their voting decisions are made is now more important than ever.

1. The SEC No-Action Process Is Becoming Less of a Planning Backstop

A major area of change for this year is the SEC’s administration of the Rule 14a-8 shareholder proposal process. Historically, when a company believed it had a basis to exclude a shareholder proposal from its proxy materials, it could submit a no-action request to the SEC staff. The staff’s response was informal and non-binding, but in practice it gave both companies and proponents a common reference point for resolving disputes before a proxy statement was finalized.

That process has become less comprehensive. In November 2025, the Division of Corporate Finance announced that for the 2025–2026 proxy season it would generally not provide substantive responses to no-action requests except those involving Rule 14a-8(i)(1), which addresses proposals that are not a proper subject for shareholder action under applicable state law.

Although companies still must notify the Commission when they intend to exclude a proposal, the change is that many exclusion decisions now require companies and their counsel to proceed with less staff commentary than in prior seasons. That does not mean issuers can act without constraint, though it means the risk analysis is different: companies must weigh the legal basis for exclusion, the likelihood of proponent challenge, the reaction of investors, and the reputational (and litigational) implications of excluding a proposal without the same level of SEC staff engagement that previously helped frame the decision.

For boards and management teams, the takeaway is that companies need to prepare earlier, document their rationale carefully, and understand how key shareholders are likely to view both the substance of a proposal and the company’s process for addressing it.

2. The 2025 SEC 13D/G Guidance Has Made Engagement More Delicate

A second shift emerged during the 2025 proxy season through new SEC staff guidance on beneficial ownership reporting under Sections 13(d) and 13(g). On February 11, 2025, the staff of the SEC’s Division of Corporation Finance issued new and updated Compliance and Disclosure Interpretations addressing when shareholder engagement with management may cause an investor to lose eligibility to report on short-form Schedule 13G may instead be required to report on the more detailed Schedule 13D, something most major institutional investors actively want to avoid.

Under prior guidance, investors generally had comfort that engagement on executive compensation, environmental or social issues, or certain governance topics would not, without more, jeopardize Schedule 13G eligibility. The updated guidance now calls into question whether engaging on these topics could make an investor lose 13G eligibility if the investor may be viewed as influencing control or exerting pressure on management to implement specific measures or policy changes.

The guidance highlights examples involving pressure tied to director elections, including recommendations that a company remove a staggered board, move to majority voting in uncontested director elections, eliminate a poison pill, change executive compensation practices, or undertake specific actions on social, environmental, or political policy, where the investor conditions support for directors on the company taking the requested action.

For issuers, the most useful way to understand the guidance is as a sliding scale of engagement risk. General governance, executive compensation, or ESG discussion may present lower risk when it remains open-ended and does not leverage director votes. By contrast, targeted requests for specific action, particularly when tied to the next director election, carry greater risk. Timing and context also matter: off-season, issuer-initiated, ordinary-course engagement is less likely to raise concerns than engagement immediately before an annual meeting, especially where the discussion is framed around whether directors will receive support.

The guidance had immediate practical implications for proxy season shareholder engagement. Many institutional investors initially canceled engagement meetings with U.S. public companies after the guidance was issued because of concerns about preserving Schedule 13G eligibility, though many meetings later resumed.

The broader impact is that engagement has become more cautious, more scripted, and less explicit in situations where a large holder is focused on preserving passive-investor status. For companies, that makes investor intelligence more important. If some holders become less willing to state expectations directly, issuers need to understand each investor’s ownership level, reporting posture, voting policy, escalation practices, and historical behavior. In a more legally sensitive engagement environment, knowing your investors means understanding not only what they care about, but also how they are likely to communicate (or not communicate) those views. What I find most striking about this shift is how quickly it changed the engagement dynamic. Investors who were previously willing to speak candidly became more guarded almost overnight.

3. Proxy Advisors Are Under Greater Regulatory and Political Scrutiny

A third shift is the growing regulatory and political attention directed at proxy advisory firms. I have watched this pressure build over several years, and what is different now is the pace and the scale of the response. ISS and Glass Lewis have long been important participants in the proxy voting ecosystem, particularly for institutional investors that use their research, data, and recommendations as part of a broader voting process. Their role has also made them the focus of criticism from policymakers who argue that proxy advisors have too much influence over corporate governance outcomes.

That pressure has intensified; in June 2025, Senator Bill Hagerty called on the Department of Justice and the Federal Trade Commission to investigate ISS and Glass Lewis for potential antitrust violations. In December 2025, the White House issued an executive order directing federal agencies, including the SEC, FTC, and Department of Labor, to review rules and practices relating to proxy advisors, with a particular focus on accountability, transparency, competition, conflicts of interest, and the role of proxy advice in voting decisions. Commentators have also noted that state-level actions and litigation have contributed to a more contested environment for the proxy advisory industry.

For issuers, the relevant point is not to assume that proxy advisors will disappear or that their influence will end. They continue to provide important research and voting infrastructure for many investors. The more realistic conclusion is that the role of proxy advisors is becoming more contested generally and more differentiated by investor. Some investors may continue to rely heavily on benchmark policies, others may use proxy advisor research but apply their own policies, and still others may move more functions in-house.

This makes predicting outcomes more complex. A company cannot assume that a favorable or unfavorable proxy advisor recommendation will translate uniformly into investor voting outcomes. Nor can it assume that political pressure on proxy advisors will simplify the voting environment. Instead, companies need to understand how each major holder uses proxy advisor research, whether voting decisions are centralized or delegated, and which policy framework applies to the securities actually held. From where I sit, that level of investor-specific knowledge is no longer a competitive advantage. It is a baseline requirement.

4. Large Investors Are Building More Customized Voting Models

The fourth change is occurring inside the investor community itself. This is the shift I find most consequential for how public companies need to think about shareholder engagement going forward. A number of large investors are moving toward more customized voting processes and less mechanical reliance on outside proxy advisory recommendations. The most visible examples are JPMorgan and Wells Fargo. In January 2026, JPMorgan’s asset management business said it would no longer use external proxy advisors for its U.S. voting process and would instead use an internal AI-enabled platform to aggregate and analyze proxy data. Later that month, Wells Fargo Wealth & Investment Management announced a proprietary, in-house proxy voting service for client assets where it has both investment discretion and proxy voting authority, with voting directed under its own custom policy and instructions focused on clients’ long-term economic interests.

This trend of further customizing approaches to voting extends beyond those two firms. Large asset managers have also been changing their stewardship structures and expanding voting-choice programs. BlackRock, Vanguard, and State Street have each moved, or announced moves, toward more differentiated stewardship or voting frameworks. In some cases, that means separate stewardship teams with different policies. In others, it means giving underlying investors more ability to express voting preferences through voting-choice programs.

The result is a more fragmented voting environment, and the path to understanding likely voting outcomes is less standardized. A company may need to know not only which institution owns its shares, but which strategy, fund, stewardship team, voting policy, or client-directed voting option is relevant to the vote.

For boards and corporate leaders, this is the central lesson of the current moment. The governance landscape has evolved from a system in which broad benchmarks provided a rough planning guide to one in which investor-specific knowledge is increasingly important. Companies that understand their holders, their policies, their engagement history, and their decision-making structures will be better positioned to anticipate concerns, communicate effectively, and respond before issues become contested. I have spent my career at the intersection of these markets. The companies that navigate this environment well are not the ones waiting for the landscape to stabilize. They are the ones that already know their shareholders.

What This Means Beyond the US

The forces reshaping US governance do not stop at the border. The UK market is experiencing its own version of this shift, driven by different mechanisms but pointing in the same direction. The FRC’s UK Stewardship Code 2026, effective January 2026, introduces for the first time targeted principles for proxy advisors, requiring transparency on the quality and accuracy of their research and recommendations. The Investment Association has discontinued its Public Register, which tracked companies receiving less than 80 percent support on any resolution, removing a reference point boards across the FTSE had relied on for years. The FRC published guidance in March 2026 actively encouraging companies and proxy advisors to move away from tick-box compliance toward flexible, company-specific governance.

The mechanism is different from the US. There is no executive order, no antitrust investigation, no federal restructuring of the advisory system. But the underlying pressure is the same: the shared frameworks that made governance predictable are giving way to more individualized judgment. For boards and company secretariats in the UK, the US experience is not a cautionary tale about another market. It is an early signal of where governance infrastructure is heading globally. The companies that build direct shareholder relationships and proprietary ownership intelligence now, on either side of the Atlantic, will be better positioned than the ones still waiting for a new consensus to form.

Conclusion: Knowing Your Investors Is the New Governance Advantage

The common thread across these developments is that the system has become less uniform. SEC staff practice, beneficial ownership reporting, proxy advisor oversight, and investor voting processes are all moving toward a governance environment in which assumptions based on legacy practice are less reliable. Although this creates risk for companies that approach shareholder engagement as an annual compliance exercise, it also creates opportunity for companies that build better investor intelligence.

I have seen this dynamic play out across markets and across cycles. The companies that come out ahead are the ones that treat shareholder intelligence as a year-round discipline rather than a proxy season exercise. That shift in mindset is available to any board willing to make it. The window to build that advantage is open now.

Readers looking for a more detailed view of how these forces played out in practice will have additional resources later this summer. D.F. King, an Equiniti company, will be publishing its annual proxy season review, The Debriefing, which will examine the key voting trends, shareholder proposal developments, investor behavior, and governance themes that shaped the U.S. proxy season. Boudicca, Equiniti's UK proxy advisory business, will provide a parallel view of developments across the UK market through its Mid-Season AGM Review.

Together, these reviews will offer a clearer picture of how regulatory change, investor-specific voting practices, and evolving engagement expectations are affecting companies on both sides of the Atlantic.