Backing BPPG: Industry Experts Voice Support for Proxy Advisors’ Position

17 October 2025

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By Jack Grogan-Fenn

The role of proxy advisors, the threat of onerous and heavy-handed regulation and concerns over so-called ‘robovoting’ were among the topics discussed during the recent Best Practice Principles (BPP) Oversight Committee’s Annual Forum 2025.

Proxy advisors have this year faced intensifying scrutiny from policymakers and regulators, particularly in the US following the re-election of Donald Trump as President, while companies have attempted to weaken or restrict the influence of shareholders.

The Best Practice Principles Group (BPPG) was formed in February 2013 to promote a greater understanding of the corporate governance or ESG research and support services provided to professional investors and other capital markets participants. Minerva Analytics’ CEO Sarah Wilson is one of the BPP Committee’s five current members, as well as being one of the drafting committee members. Minerva was also one of the BPPG’s founding group members.

The BPP Oversight Committee, meanwhile, is the governing body of the group which provides an annual independent review of the monitoring of the Best Practice Principles and an annual independent review of the public reporting of each BPP Signatory. 

Principles’ Practicality

Minerva’s Wilson said that the principles have given us the opportunity to communicate more widely the commitment that we have to quality, accuracy, objectivity and independence.” She added that it “enables us to go out there on a more level playing field and to clearly show that we have all the policies, procedures and we can prove it”.

“What it comes down to is there are a few advisors, lobby organisations or aggrieved CEOs who didn’t get the long-term incentive plan that they wanted making a lot of noise, drowning out the fact that the majority of the clients and issuers, understand that voting is complicated,” said Wilson. “People need tools and services, just like they do in any other part of the investment process […] the question arises is, why do people not seem to believe it when we say it.”

Jen Sisson, CEO of the International Corporate Governance Network, stated that proxy advisors play a “vital supporting role” in investors’ stewardship approaches. “They provide independent, timely and scalable research that empowers investors to exercise their voting rights responsibly, thoughtfully across 1000s of companies every year,” she said. “The reality is that modern global portfolios generate thousands of voting items each proxy season, so for any investor to analyse every resolution in house would be prohibitively expensive.

“Those costs would not just sit on a balance sheet in isolation, they would ultimately be passed on to real people, retirees, savers, workers, investing for their future,” added Sisson. “Proxy advisors provide a cost, efficient way to ensure informed voting can work at scale while allowing investors to direct resources to engagement and oversight.”

Jennifer Coulson, Senior Managing Director & Global Head, ESG at British Columbia Investment Management, suggested that the BPPG could play a “communications and strategic, thoughtful leadership role here”, adding that “I really feel like there’s a bit of a vacuum”.

Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International, said that the principles provide a “strong underpin” for what service providers should do and should sign up to. “It’s very important because it combats against other forms of harder regulation that we see markets starting to propose to regulate proxy advisors which is based, on a misunderstanding of the role of proxy advisors more broadly, so I think that’s where the BPP principles are particularly helpful,” he added.

During the forum, a presentation given by Anna Tilba, who serves on the BPP Oversight Committee and is Chair of the reviewing subcommittee, highlighted Minerva’s “new and very detailed” table on BPPG principle alignment in its  Stewardship Code and the BPPG Code of Conduct. The BPP oversight committee’s annual report is due to be published next month.

“I want to commend the BPPG,” said Sisson. “Your self-regulatory model is an important counterpoint to heavy handed intervention by advancing standards voluntarily and by embedding transparency and accountability into your framework, you’re demonstrating that the industry is capable of upholding integrity without overly prescriptive regulation.”

Regulation Risks

During the event, Minerva’s Wilson pointed out that long-running narratives fomented by lobby organisations like the Chamber of Commerce and the Business Roundtable in the US has attempted to make proxy voting agencies into a “bogeyman”. This has become increasingly clear in the attempts in the US to regulate proxy advisors and pare back shareholder rights.

Wilson added that stock exchanges that have got “very bent out of shape about the lack of IPOs” which has led to them “reducing one share, one vote, because they believe that you as shareholders are somehow going to be so misguided that you’re not going to let Company X, Y or Z do what they need to do, because the great founder must be allowed to do what they have to do.”

Proxy advisors have found themselves under attack on several fronts this year. Last month, a new investigation into two major proxy advisors was commenced by Texas Attorney General Ken Paxton accusing them of “potentially misleading institutional investors and public companies”, as reported by Minerva Analytics. This forms part of a wider attempt in both Texas – particularly in the form of high-profile Senate Bill (SB) 2337, as reported by Minerva Analytics – and by Republican state officials to restrict proxy advisors and shareholder.

The proposed Texas law is aimed at restricting proxy advisory services and investor choice on a worldwide basis. It was due to come into effect on September 1, but a preliminary injunction was granted by a Trump-appointed Republican judge in the state following lawsuits from two major proxy advisors. A trial is now set for February 2, 2026. The judge reportedly said the statute wrongly compels speech by forcing the advisory firms to issue disclosures “they don’t think are accurate”.

Minerva Analytics responded by filing a Texas Public Information Act (TPIA) request (freedom of Information request) with the Texas Attorney General seeks disclosure of communications between the Attorney General’s office, the Texas Stock Exchange, and related parties concerning proxy advisory services and SB 2337. The objective is to clarify whether coordination has occurred and to safeguard investors’ right to independent analysis free from political interference.

Meanwhile. a hearing by the Republican-run House Committee on Financial Services entitled “Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value” in September showcased pipeline of proposed regulation seeking to significantly restrict both proxy advisors and shareholder rights, as reported by Minerva Analytics.

“We need to be clear on the role and the activities of proxy advisors, because the wilful misinterpretation of what they do is harmful. It’s political and misleading, and it’s not in the best interest of our end beneficiaries,” said ICGN’s Sisson. “We are seeing growing pushback, and particularly in the US, where political and legal developments are directly challenging the role of proxy advisors and the rights of shareholders.”

Railpen’s Head of Investment Stewardship and Co-Head of Sustainable Ownership Caroline Escott, who joined the oversight committee earlier this year, remarked that “policymakers, possibly from all parties, just don’t have a financial services or investment background [and] find it hard to understand how investors think and what the investing ecosystem looks like”.

She added: “I think it is intuitively simpler for them to hear, maybe dual-class share structures are what’s holding companies back, or maybe it’s proxy advisors, because they are influencing the investors on executive pay and all these other kinds of things.”

Wilson said that her greatest proxy advisory-related concern for the next year was regulators “not making their mind up what regulations should be in place [and] forever changing them”. “People don’t realise there is a long lead time in having to make developments and policymakers do not understand we have massive technology systems that need to be recoded and reprogrammed, you have to retrain staff, and it’s not so easy as suddenly here’s a new regulation.”

She added that it is “very insulting about shareholders who daily move billions around the markets, and somehow you become drooling idiots when it comes to shareholder voting”. Wilson said that “in the political environment we’re dealing with in the US and in Europe, logic has gone out the window. It’s going to be a difficult few years.”

Tricky Technology

The forum also saw discussion of concept of ‘robovoting’ in the context of oil and gas giant ExxonMobil’s retail investor-focused voting mechanism which received approval from the US Securities and Exchange Commission (SEC) last month. When implemented, it will allow retail investors to automatically cast ballots in step with board recommendations during AGMs.

As You Sow and the Interfaith Center for Corporate Responsibility (ICCR) have filed a request with the SEC to rescind its recent “effective approval” of Exxon’s “Retail Voting Program”, as reported by Minerva Analytics. As You Sow and ICCR argue that “under the guise of ‘assisting’ retail voters” Exxon are looking to encourage retail shareholders to opt into a programme that “would cast their votes in favour of management for all future meetings, unless and until shareholders take steps to opt-out”.

“While we appreciate their expanding retail shareholder participation in voting is a good goal, we’re deeply concerned about the risks in some of the implementation,” said ICGN’s Sisson. “We don’t want to see companies having the ability to set up their retail shareholders to default vote with management on a perpetual basis.

“We need to make sure that safeguards are in place, that annual renewal is needed with clear and easy ways to change your mind, or there is the ability to make case by case considerations and that’s particularly important in the case of contested meetings, M&As or other key issues that might arise,” she added.

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Last Updated: 17 October 2025