Four Forces, One Season
For most of the past 30 years, public company boards could navigate the proxy season by understanding three things: what ISS would recommend, what Glass Lewis would recommend, and what the SEC would accept. That was not a perfect system. But it was a stable one. Boards invested in understanding those reference points and managed their governance accordingly.
That system is gone.
These changes did not happen in isolation. ISS, Glass Lewis, and the SEC all operated within a broad consensus about what governance should look like and what role they should play in enforcing it. That consensus fractured. A sustained campaign by state attorneys general, congressional critics, and ultimately the federal government argued that proxy advisors had accumulated unaccountable influence over corporate America and were using it to advance agendas that critics said conflicted with investor fiduciary duties. The December 2025 executive order was the culmination of that campaign, and ISS and Glass Lewis had already begun adapting before it was signed. The four forces shifting this season share a single root: the governance consensus that gave these institutions their authority no longer holds.
Here is what that looks like in practice.
ISS dropped its decade-long default of recommending support for ESG-related shareholder proposals. Starting with meetings held after February 1, 2026, ISS now evaluates each proposal individually on climate, diversity, political contributions, and human rights. The presumption of support that boards use as a planning floor is gone. Shareholders advancing those proposals can no longer count on ISS to carry the vote. Neither side can plan around a known outcome.
Glass Lewis announced it will retire its universal benchmark policy in 2027. For decades, that benchmark gave boards and investors a shared governance language. Companies knew what Glass Lewis expected. Boards calibrated their practices against it. Starting in 2027, Glass Lewis will offer clients four distinct frameworks aligned with individual investment philosophies. Two investors at the same company could receive different recommendations. The shared reference point disappears.
The federal government has entered the field directly. On December 11, 2025, President Trump signed an executive order directing the SEC, FTC, and Department of Labor to review and restructure the regulatory framework governing proxy advisors. The FTC launched an antitrust investigation into both ISS and Glass Lewis. State-level enforcement actions are active in Florida, Missouri, and Texas. ISS and Glass Lewis are expected to challenge any new SEC rules in court. The direction of federal intervention is still unsettled. That uncertainty is itself a risk.
The SEC withdrew from its role as neutral arbiter. For decades, the SEC's no-action process gave companies a place to take disputes about shareholder proposal exclusions. That process kept conflicts out of court and gave regulatory authority to the outcomes. The SEC has now stepped back from substantively responding to most no-action requests. Companies must make exclusion decisions on their own judgment, without a regulatory backstop, and defend those decisions in litigation if challenged.
Each of these institutions has changed before. The market has never absorbed all four changing simultaneously, in the same season. This is not a temporary disruption that will resolve into a new normal. It is a structural shift that transfers the burden of judgment back to issuers. The companies that spent 30 years outsourcing shareholder intelligence to advisors and regulators now have to own that intelligence themselves. The consensus that gave those advisors and regulators their authority is gone. What remains is yours to navigate without a map.
Washington Enters the Field
For decades, the SEC played a quiet but essential role in the proxy system. When a company believed a shareholder proposal did not belong on its ballot, it could file a no-action request with the SEC asking for confirmation that the agency would not object to exclusion. The SEC would respond. Sometimes it agreed, sometimes it did not. But the process itself absorbed the conflict. Disputes that could have ended in litigation ended instead with a staff letter. The SEC was not a referee in any dramatic sense. It was a process. And that process kept the system stable.
That process no longer works the way it did. And what replaced it is not simply an absence.
By November 2025, the SEC had stopped substantively responding to most no-action requests, and at least one lawsuit testing a company’s unilateral exclusion decision was filed before the 2026 season closed.
The executive order that followed converted withdrawal into intervention. On December 11, 2025, President Trump signed an order directing the SEC, FTC, and Department of Labor to conduct sweeping reviews of the rules governing proxy advisors, with the stated goal of curtailing their influence over shareholder voting. The SEC signaled it would propose new rulemaking by April 2026, including potential changes to Rule 14a-8 that could raise eligibility thresholds for submitting shareholder proposals or eliminate certain categories of proposals altogether.
The FTC launched an antitrust investigation into both ISS and Glass Lewis. Florida's attorney general filed a lawsuit against the firms in November 2025. Missouri and Texas have active enforcement actions. ISS and Glass Lewis are expected to challenge any new SEC rules through litigation, with First Amendment claims among the anticipated arguments.
The result is a governance landscape in active legal and regulatory flux. Companies planning their 2027 strategies are doing so against a compliance framework that could look materially different by the time the next season opens. That uncertainty is not a temporary condition to wait out. It is the condition boards now operate in.
What this means practically: the decisions that once resolved quietly at the SEC staff level now carry litigation exposure, reputational risk, and the possibility of an SEC enforcement action if the agency disagrees with a company's exclusion rationale. The cost of getting it wrong has risen. The guidance that would have helped companies get it right has been withdrawn.
Sources: Executive Order Targeting ISS and Glass Lewis, Paul Weiss | Evolving Rules on Proxy Advisors, Mercer
How the Investor Side Is Adapting
While boards have been watching regulators and proxy advisors, the institutions that actually cast the votes have been quietly rebuilding how they make decisions. That rebuild changes the engagement calculus for every public company, and most issuers have not caught up to it.
The most significant signal came from JPMorgan. In early 2026, JPMorgan's asset management unit cut ties with proxy advisory firms entirely and moved its U.S. voting decisions to an internal AI-powered platform called Proxy IQ. JPMorgan is not a small institution making an idiosyncratic choice. It is a leading indicator of where institutional stewardship is heading: in-house, proprietary, and no longer tethered to the benchmark recommendations that companies have spent years calibrating against.
BlackRock and State Street each split their stewardship functions in 2025 into two separate teams with distinct decision-makers, policies, and methodologies. At BlackRock, index portfolios sit with one team and active strategies with another. At State Street, a core asset stewardship team operates alongside a separate sustainability stewardship service. Vanguard announced a similar split, effective in 2026. The practical consequence: a single institution can now arrive at different voting decisions on the same proposal depending on which internal team is evaluating it. An issuer engaging at the institution level rather than the stewardship-team level is engaging the wrong audience.
Pass-through and voting-choice structures compound this further. These programs allow the underlying investors in a fund to direct how their shares are voted, either by voting directly or by selecting from a menu of policy options. The vote that a company receives from a large asset manager is increasingly an aggregation of many individual decisions rather than a single institutional position. The idea that you can understand your shareholder base by understanding your top ten holders is no longer reliable.
The 2026 season confirms the stakes. Through late May, shareholders rejected six say-on-pay packages outright and voted against 18 directors at 14 companies. Activists ran contested director slates at four companies and swept the board at two. The correlation between failed say-on-pay votes and subsequent activist targeting is showing up in live outcomes, not projections.
The companies navigating this well are the ones that mapped their shareholder base before the season opened, identified which stewardship teams held decision-making authority at each institution, and engaged those teams directly. The companies that relied on proxy advisor benchmarks as a proxy for investor sentiment are finding out that the map no longer matches the territory.
The Cost of Renting Your Shareholder Intelligence
I have run proxy situations where the issuer walked in confident and walked out surprised. Not because the votes were close. Because the company did not know its own shareholder base well enough to see what was coming.
That gap used to be survivable. Proxy advisors filled it. If you knew what ISS and Glass Lewis expected, and you met those expectations, you had a reasonable read on how the votes would fall. That was never a complete picture. But it was a workable one.
It no longer works.
At EQ, we administer records for more than 20 million shareholders. We see the data behind these votes; not the headlines, but the ownership patterns, the engagement gaps, and the signals that precede contested outcomes. What we are seeing in 2026 confirms what the structural shifts in the sections above would predict: companies without year-round ownership intelligence are navigating blind. The ones that built direct relationships with their institutional stewardship teams before the season opened are in a materially different position from the ones that did not.
The riskiest position heading into 2027 is not an activist on your shareholder register. It is not knowing your shareholder register well enough to see one coming.
The 2027 season will be the first in which no Glass Lewis universal benchmark exists, no ISS default applies to most contested proposals, and no SEC process absorbs exclusion disputes. That combination is without precedent. Companies that spend the next 12 months building proprietary ownership intelligence will enter that season with a structural advantage. Companies that wait for the new system to settle before they act are planning against a map that may never exist.
The window to close the gap is open. It will not stay open.
Sources: 2026 Shareholder Meeting Agenda, BDO | Steady Votes, Shifting Expectations, Sodali
Closing
The governance infrastructure that stabilized markets for 30 years is gone. That is not a reason for alarm. It is a reason to act.
The companies asking the right question right now are not asking when the system will stabilize. They are asking what they can build while their competitors are still waiting.
The answer is direct relationships with institutional stewardship teams. Year-round ownership intelligence rather than seasonal snapshots. Governance calibrated against your actual shareholder base rather than a benchmark policy written for everyone and optimized for no one.
Companies that make that investment now will enter 2027 with something their competitors do not have: an accurate, current picture of who owns their shares, what those owners believe, and how they will vote. Companies that do not make that investment will enter the same season without the ability to anticipate how their shareholders will vote, identify activist risk early, or engage the stewardship teams that now make the decisions proxy advisors used to make for them. In a season without universal benchmarks, without default recommendations, and without regulatory mediation, that picture is the only reliable planning tool left.
The disruption is real. But so is the opening. For the first time in a generation, the companies that invest in knowing their shareholders directly will have a structural advantage over the ones that outsourced that knowledge to advisors. That advantage compounds. The window to build it is open now.
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 that 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.
Dan Kramer Chief Executive Officer of Equiniti About the Author
Dan Kramer is the Chief Executive Officer of Equiniti (EQ), a leading provider of shareholder services, transfer agency, and capital markets solutions. EQ administers records for more than 20 million shareholders and supports thousands of public companies in managing their relationships with investors. Prior to becoming CEO, Dan held senior leadership roles spanning shareholder engagement, securities lending, and capital markets infrastructure. He writes and speaks on the future of ownership, governance, and market structure.