31 August 2023 Financial Analysts Journal Volume 79, Issue 4

The Controversy over Proxy Voting: The Role of Fund Managers and Proxy Advisors

  1. Arnoud Boot
  2. Jan Krahnen
  3. Lemma Senbet
  4. Chester S. Spatt, PhD
We examine the role of proxy advisors and asset managers and suggest four improvements of corporate governance: more transparency on side-businesses and on voting advice, stronger market competition, and increased investor participation in voting.
Read the Complete Article in the Financial Analysts Journal CFA Institute Member Content


In this statement, we assess the role and power of proxy advisors and asset managers in corporate governance in a market that is characterized by a limited number of voting advisory firms (Institutional Shareholder Services and Glass Lewis) and a growing dominance of index investing concentrated in a few large asset managers, such as BlackRock, Vanguard, and State Street. We discuss the business model of proxy advisory firms and contrast its objectives with those of asset managers in the context of the informational screening/filtering role and voting analysis and conclude with a set of policy recommendations addressing transparency and regulatory oversight.

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