State Street Investment Management (SSIM)–formerly State Street Global Advisors (SSGA)–has published its 2026 global voting policy updates which are effective April 2026¹.  The material changes, which are discussed below, include embedding financial performance into certain policies, streamlining the framework for evaluating shareholder proposals, and disclosing the guidelines followed by the asset stewardship team when engaging with U.S. public companies.

Financial performance

SSIM has incorporated financial performance, based on total shareholder return (TSR) relative to the company’s Global Industry Classification Standard (GICS) sector, into its assessment of board composition, board oversight of risks and opportunities, and executive compensation. It has removed board diversity factors from its discussion of board quality and composition.  It has also eliminated its section on board oversight of geopolitical risk.

Evaluation of shareholder proposals

In evaluating shareholder proposals, SSIM will consider whether adoption would promote long-term shareholder value in the context of its core governance principles:  effective board oversight, quality disclosure and shareholder protection.  It has removed its previous factors for supporting a shareholder proposal which, in the case of disclosure requests, included satisfying SSIM’s detailed disclosure criteria on issues such as climate change; nature and biodiversity; human capital management; diversity, equity and inclusion (DEI); human rights; and political activities.

Shareholder rights

SSIM has removed its explicit preference for a 25% or less ownership threshold for shareholders to call a special meeting or act by written consent.

Engagement policy

SSIM has added an appendix with guidelines on how its asset stewardship team will conduct engagements with U.S. public companies.  In keeping with last year’s SEC guidance on passive/active investor status, SSIM’s discussion parameters underscore that it does not seek to influence or change control of any issuer, including the following:

• It will not discuss how it intends to cast its vote on any particular ballot item or its rationale for any vote it has made.
• It will not dictate or pressure companies to adopt or change any policies or fundamental business choices.
• It will not engage in discussions that explicitly or implicitly suggest contingent voting or divestment if a company does not adopt SSIM’s viewpoint on a particular item, or that suggest that any particular factor, policy or practice is dispositive in its engagement or voting decisions.

SSIM expects its U.S. portfolio companies to set engagement meeting agendas.  The stewardship team will be in “listen-only” mode during discussions of the following topics with either companies or investors soliciting SSIM’s votes in connection with contested shareholder meetings, “vote no” campaigns, or shareholder proposals:

• Contested director elections
• Adoption of a climate transition plan
• Adoption of specific targets for emissions reduction
• Disclosure, reduction or adoption of a policy on Scope 3 emissions
• Changes to the company’s capital allocation

SSIM further states that it does not apply, nor will its stewardship team discuss, specific targets or thresholds of gender, racial or ethnic diversity in connection with U.S. portfolio companies.

Proxy voting process

In its overview of its asset stewardship program, SSIM deleted references to its use of Institutional Shareholder Services (ISS) to facilitate the execution of its proxy votes, including acting as its proxy voting agent, assisting in applying SSIM’s voting policy, and providing research and analysis relating to general corporate governance issues and specific proxy items. 

Introduction

This cross-market comparison has been developed focusing on the United Kingdom and Germany, arguably two of the most sophisticated capital markets in Europe. Distinctions in specific voting guidelines and corporate governance expectations between these jurisdictions are not viewed as compromising the validity of this high-level statistical comparison.

To facilitate a robust dataset for meaningful analysis, the FTSE 100 was utilized for the United Kingdom, while a synthetic “DAX 90“ -comprising an aggregation of the DAX 40 and MDAX 50- was established to provide a comparable German peer group.

Therefore, we examined the voting activity of 15 top-tier global investors across 85 FTSE 100 and 82 DAX 90 constituents throughout 2025, with a total volume of 24,535 and 19,414 recorded investor votes, respectively. It is considered a substantial basis for evaluating voting behaviour against Institutional Shareholder Services (“ISS”) and Glass Lewis (“GL”) recommendations, the two preeminent global proxy advisory firms.

Key Findings

• Within the FTSE 100 and DAX 90 indices, alignment with positive ISS recommendations appears consistently high. In the FTSE 100, twelve investors exhibit an alignment of 99% or greater, whereas ten investors attain this threshold within the DAX 90. The remaining institutional investors nevertheless maintain substantial alignment rates, ranging between 91.7% and 98.7%.
• The negative ISS recommendations reveal a starkly different landscape. The peak alignment in the FTSE 100 reaches 96%, and 88.3% in the DAX 90. Furthermore, alignment rates fluctuate significantly, descending to as low as 19.1% in the FTSE 100 and 14.2% in the DAX 90.
• Regarding positive GL recommendations, the degree of alignment across both the FTSE 100 and the DAX 90 tends to be lower. While ten investors in the FTSE 100 maintain an alignment of 99% or greater, only three investors reach this level within the DAX 90.
• Concluding with negative GL recommendations, the highest alignment within the FTSE 100 stands at 72.2%, with a notable decrease to a floor of 17.7%. In contrast, the DAX 90 exhibits a higher peak alignment of 86.3%, while the minimum alignment observed is 29%.

Deconstructing the “Blind Following” Narrative

The high degree of alignment with positive proxy advisory recommendations suggests that proxy advisory mirrors an established consensus on core corporate governance topics.

In contrast, the lower alignment with negative recommendations indicates that investors’ internal voting guidelines are less rigid and thus frequently support agenda items even when ISS and/or Glass Lewis recommend against them. This highlights a distinct misalignment between the standardized recommendations of proxy advisors and the independent stewardship policies of individual institutional investors.

The (Secret) “Decision-Maker” Narrative

The discourse surrounding proxy advisory firms frequently invokes the narrative of a “secret decision-maker,” a theme that remains a staple of both professional discussions and media coverage.

While it cannot be entirely discounted that certain individual AGMs, if viewed in isolation, might suggest that proxy advice served as the primary catalyst for a voting outcome, our empirical data appears to challenge this assumption.

From Ex-Post Observation to Ex-Ante Strategy

ISS and Glass Lewis recommendations are strong statistical indicators, but their review is essentially passive and retrospective.

While our clients already benefit from a proprietary database granular enough to track & analyse specific agenda item types, achieving success at an AGM requires moving beyond reactive damage control. By shifting the focus to a proactive analysis of individual investor guidelines, companies can bridge the ‘governance gap’ long before a proxy advisory analysis is even published.

Ultimately, a positive outcome is determined by aligning corporate decisions and the meeting agenda with investors’ expectations well in advance of the shareholder meeting.

Statistics: FTSE 100 & DAX 90 vs. ISS & Glass Lewis

Comparison of the Peers: FTSE 100 & DAX 90

The following dataset details the voting activity of the fifteen selected institutional investors alongside their disclosed utilization of ISS and/or Glass Lewis (“GL”) advisory services. This data serves as the empirical foundation for the subsequent analysis of alignment or divergence with the proxy advisory recommendations.

• Sample Size and Investor Profile: The dataset encompasses the aggregate number of agenda items voted upon by each constituent investor across both indices. For instance, Amundi recorded votes on 1,798 items within the FTSE 100 and 1,570 within the DAX 90. It appears that investors utilizing index-tracking strategies naturally exhibit a higher volume of voted agenda items. Conversely, more concentrated or selective investors, characterized by a narrower scope of investee companies, demonstrate a correspondingly lower number of voted items.
• Weighting and Distribution: Within this peer group, the total volume of votes amounts to 43,949. The FTSE 100 accounts for 24,535 of these votes (55.8%), while the DAX 90 represents 19,414 (44.2%).
• Market Variance: The higher volume observed within the FTSE 100 appears to be driven by a greater aggregate number of votable agenda items per company in the UK market, rather than being a result of investor selection. As delineated in the “Methodology & Database” section, the analysis encompasses 85 of the FTSE 100 and 82 of the DAX 90 companies, reflecting a balanced corporate peer group despite the variance in absolute vote counts.

ISS Recommendations Alignment: FTSE 100 & DAX 90

Further illustrations can be found on the heatmaps and bar charts below.

ISS + = Voting +

This dataset shows the percentage of “For” votes cast for agenda items that received a positive ISS recommendation. Any deviation from 100% occurs when an investor votes against an item despite a supportive ISS recommendation.

• High Alignment: Alignment with “For” recommendations remains exceptionally high across both markets; indeed, the degree of alignment exceeds 99% in twelve instances within the FTSE 100 and in ten cases within the DAX 90.
  Market Comparison: The unweighted average alignment for positive recommendations is slightly higher in the DAX 90 (~98.8%) than in the FTSE 100 (~98.1%).
• Regional Trend: In 11 out of 15 cases, investors show higher alignment with ISS “For” recommendations in the DAX 90 compared to the FTSE 100.

ISS – = Voting –

This dataset shows the percentage of “Against” votes cast for agenda items that received a negative ISS recommendation. Any deviation from 100% occurs when an investor votes for an item despite a negative ISS recommendation.

• Low Alignment: Alignment with “Against” recommendations remains low across both markets.
  Market Comparison: In contrast to the consensus observed regarding positive recommendations, the unweighted average alignment for negative recommendations decreases substantially to approximately 41.5% in the FTSE 100 and 51.5% in the DAX 90. Furthermore, individual alignment levels exhibit significant volatility, descending to a floor of 19.1% within the FTSE 100 and 14.2% within the DAX 90.
• Regional Trend: In 10 out of 15 cases, investors demonstrate a relatively stricter adherence to ISS “Against” recommendations in the German market than in the UK.

Glass Lewis (“GL”) Recommendations Alignment: FTSE 100 & DAX 90

Further illustrations can be found on the heatmaps and bar charts below.

GL + = Voting +

This dataset shows the percentage of “For” votes cast for agenda items that received a positive GL recommendation. Any deviation from 100% occurs when an investor votes against an item despite a supportive GL recommendation.
Strong Alignment : Similar to ISS, alignment with positive GL recommendations remains exceptionally high, with nearly all investors exceeding 90% across both markets.

• Market Comparison: The unweighted average alignment for positive recommendations is slightly higher in the FTSE 100 (~98.3%) compared to the DAX 90 (~96.3%).
• Regional Trend: 10 of 15 investors show a higher alignment with GL “For” recommendations in the FTSE 100 compared to the DAX 90.

GL – = Voting –

This dataset shows the percentage of “Against” votes cast for agenda items that received a negative GL recommendation. Any deviation from 100% occurs when an investor votes against an item despite a supportive GL recommendation.

• Low Alignment: Alignment with “Against” recommendations is notably low across both markets.
• Significant Drop in Alignment: Consistent with the ISS data, the unweighted average alignment for negative recommendations is much lower than for positive ones, at approximately 34.1% in the FTSE 100 and 52.2% in the DAX 90. Furthermore, individual alignment levels exhibit significant volatility, descending to a floor of 16.7% within the FTSE 100 and 29% within the DAX 90.
• Regional Trend: 12 of 15 investors demonstrate a stricter adherence to GL “Against” recommendations in the German market than in the UK.

Interpreting Congruence: Why High Alignment Is Not Proof of Causation

According to a paper by Robert Matthews in 2000 titled “Storks Deliver Babies (p=0.008)”, a highly statistically significant correlation exists between stork populations & human birth rates across Europe.

As the paper showed that a high correlation does not inherently imply causality, the author noted: “While storks may not deliver babies, unthinking interpretation of correlation and p-values can certainly deliver unreliable conclusions.”

Possible Factors Influencing Voting Alignments

• Shared Best Practices: Both investors and proxy advisors frequently operate from the same global governance playbooks. Frameworks established by organizations such as the ICGN, UN PRI, and the OECD, alongside national Corporate Governance Codes, create a common baseline. Consequently, high alignments with positive proxy advisory recommendations might just reflect a shared adherence.
• Feedback Loops: ISS and Glass Lewis conduct comprehensive annual policy surveys and regular client consultations to ensure their benchmarks remain aligned. By considering also this direct input for their guidelines, there might be a certain self-reinforcing cycle.
• Routine Consensus: A certain portion of AGM agendas consist of “routine” and rarely controversial items. In these cases, there is a natural market-wide overlap in positive recommendation & voting, which mathematically inflates alignment percentages.
• Common Perspectives: The high degree of alignment with positive recommendations suggests that proxy advisors mirror an established consensus on basic corporate governance best practices.

Possible Factor Influencing Voting Divergences

• Diverging Perspectives: In contrast, the lower alignment with negative recommendations might indicate that investors’ internal voting guidelines are less rigid and thus frequently support agenda items even when ISS and/or Glass Lewis recommend against them. Consequently, this highlights a clear misalignment between the recommendations of proxy advisors and the independent views and voting policies of individual institutional investors.

Methodology Market Peer Comparison & Index Selection

• Our study examines 15 of the largest international institutional investors, selected based on average investment size and strategic shareholder structures.
• The underlying voting behavior has been curated directly from the investors’ respective public disclosure platforms. This approach ensures that the dataset reflects the official, ex-post records of their stewardship activities, providing a transparent and verifiable basis for our analysis.
• Furthermore, the analysis utilizes original ISS and Glass Lewis recommendation data, deliberately avoiding datasets reconstructed ex-post from the disclosed voting records of investors assumed to have outsourced their voting decisions. Our direct access to primary advisory data ensures that the dataset remains both reliable and comprehensive; consequently, this approach facilitates a high degree of analytical precision by eliminating the risks of secondary data degradation.
• We tracked the correlation of ‘For’ and ‘Against’ votes relative to ISS and Glass Lewis guidance, omitting ‘Abstain’ votes from the scope. Abstentions represent a marginal fraction of the total—never exceeding a 0.01% threshold of votes cast—and are frequently non-existent among the investors in our study.To establish peer groups comparable between the UK and Germany, we opted for the FTSE 100 on the one side, and we aggregated the DAX 40 and MDAX 50 to create a synthetic DAX 90.
• By utilizing this synthetic index, we not only achieved a highly balanced sample sizes for our analysis but also concentrated on the German side to large-cap and mid-cap companies, which better reflects the set-up of the FTSE 100.
• To ensure a consistent baseline for voting guidelines and investor expectations, we excluded companies without full proxy coverage—typically, though not exclusively, due to insufficient free float.
• We also excluded companies incorporated outside the target market to ensure a consistent comparison, as foreign entities may be subject to different regulatory expectations and voting guidelines.
• In total, the analysis covers 167 companies: 85 FTSE 100 companies with 24,535 agenda items (55.8% of total votes) and 82 DAX 90 companies with 19,414 agenda items (44.2% of total votes).

Vanguard has published its updated U.S. and global proxy voting guidelines, which take effect in January 2026.

As announced last June, Vanguard has split into two separate investment advisors, Vanguard Capital Management and Vanguard Portfolio Management consisting of distinct investment management and stewardship teams that administer proxy voting for the firm’s internally managed funds¹.  For 2026, they are following identical policies for U.S. companies, though these may eventually diverge in future years.

The U.S. guidelines contain no substantive revisions.  Instead, the language throughout has been amended so that the policy may recommend a particular voting decision rather than stating that the funds will generally vote “for” or “against” a proposal.  Vanguard has also removed detailed factors on certain topics, such as director elections, that would prompt a favorable or negative vote, as discussed below.  This approach is likely the result of SEC guidance issued in early 2025 regarding Schedule 13D/G status.  Vanguard’s policy documents highlight the passive nature of its internally managed U.S. funds, which will not nominate directors, solicit or participate in the solicitation of proxies, or submit shareholder proposals at portfolio companies.

Board composition: Vanguard considers an appropriate mix of skills, experiences and perspectives when examining board composition.  It has removed references to directors’ personal characteristics, such as age, gender and/or race/ethnicity.

Board leadership: Consistent with its prior policy, votes will generally be recommended against shareholder proposals to separate the CEO and chair roles unless there are significant concerns regarding the independence or effectiveness of the board.  Vanguard has deleted from its policy specific factors that would sway it to vote in favor of the shareholder proposal, such as the lack of a robust lead director role, lack of board accessibility, low overall board independence, governance structural flaws, unresponsiveness to shareholder votes, unilateral actions that impair shareholder rights, or oversight failings, including those of a social or environmental nature.

Director capacity and commitments: Vanguard is maintaining its current overboarding policy whereby votes may be recommended against a public company executive who sits on more than two public company boards and other directors who serve on more than four public company boards.  Vanguard has deleted explicit factors that may lead to an exception, such as a public commitment that the director will be stepping down from any directorship(s) necessary to fall within these thresholds.

Director accountability: As in the past, votes may be recommended against directors who fail in their oversight role, fail to act on majority shareholder votes, or take unilateral action that meaningfully diminishes shareholder rights.  Vanguard has eliminated from its policy specific concerns that may spur negative votes, such as “zombie” directors on the board, egregious pay practices, excessive non-audit fees paid to the auditor, unilateral adoption of onerous advance notice or exclusive forum provisions, or failure to oversee material social or environmental risks.

Contested director elections: Vanguard has largely retained the criteria used in its case-by-case evaluation of board contests.  It has removed as a factor whether the board engaged in productive dialogue with the dissident.

Exclusive forum/exclusive jurisdiction: Vanguard will continue to give companies latitude in designating state courts in a company’s state of incorporation or principal place of business as the exclusive forum for adjudicating certain claims.  It has deleted its policy of generally supporting the designation of state courts in Delaware as the exclusive forum. It has also removed its policy of opposing governance committee members if a company unilaterally adopts a forum selection provision that meaningfully limits shareholders’ rights without a compelling rationale.

Hybrid/virtual meetings:  Vanguard has eliminated its specific criteria for supporting proposals to conduct a “virtual-only” shareholder meeting.  It expects such meetings to be designed so as not to curtail shareholder rights, such as shareholders’ ability to ask questions.

BlackRock has released its 2026 updates to the Blackrock Investment Stewardship (BIS) U.S. benchmark policies and engagement priorities which become effective in January 2026¹.

The policy revisions mainly consist of clarifications and changes to wording, particularly in view of the White House executive orders on diversity, equity and inclusion (DEI) and the SEC’s Schedule 13D/G guidance, which were issued in the early part of 2025.  For example, throughout the document, BIS replaced “may vote against” directors with “may not support” directors.  It further noted in its section on shareholder proposals that it is subject to certain rules, regulations, agency guidance and contractual agreements that limit how it interacts with companies.  It explicitly stated that it does not nominate directors for board elections or submit shareholder resolutions to companies.

Other changes include the following:

Board composition:  BIS continues to downplay references to board gender and racial diversity.  Its revised policy states that it may not support members of the nominating/governance committee at an S&P 500 firm where the board is a sustained outlier compared to market practice in terms of having a variety of experiences, perspectives and skillsets.  According to a footnote, this also includes directors’ professional and demographic backgrounds.  BIS has eliminated its previous basis for determining outliers—namely, that 98% of S&P 500 firms had 30% or more diverse representation as of December 2024.

Executive compensation:  BIS added a discussion on executive perquisites, which states that it examines the rationale for certain perquisites, such as security, and whether their appropriateness is regularly evaluated by the compensation committee.

Material sustainability-related risks and opportunities: BIS has clarified that although it considers standardized disclosure of sustainability-related data useful, it does not mandate that companies follow any specific disclosure framework.

Climate and nature-related risk:  BIS has combined its discussion of climate and natural capital risks and indicated that, in both cases, it will convey concerns about board oversight through director election votes or support of a business-relevant shareholder proposal.

BIS has also deleted outdated references, including to the Taskforce on Climate-Related Financial Disclosures (TCFD), which disbanded in 2023, and to earlier research by the BlackRock Investment Institute on the low-carbon transition.  It also removed its expectation that companies stress-test their business models under a range of climate-related scenarios, including the Paris Agreement goal of limiting global warming to well below 2⁰ C.

Companies’ impact on their workforce, supply chains, and communities:  BIS has emphasized that it does not direct a company’s policies or practices on stakeholder relationships, which are the responsibility of the board and management.  It may convey concerns regarding oversight of material risks related to stakeholders through its votes on director elections or support of a business-relevant shareholder proposal.

Human capital management:  BIS has removed its expectation that companies disclose their approach to DEI, as well as their workforce demographics based on EEO-1 Survey disclosures.

Corporate political activities:  BIS adjusted its criteria for supporting a political spending or lobbying disclosure proposal to situations where additional transparency would aid in understanding how the company manages material risks associated with its political activities.  Previously, BIS felt more disclosure was warranted if it was unclear how a company’s political activities supported its strategic policy priorities or if there appeared to be discrepancies.  BIS also deleted references to using third-party research, such as the CPA-Zicklin Index of Corporate Political Disclosure and Accountability, for industry peer comparisons.

Shareholder proposals:  BIS has emphasized its case-by-case approach to shareholder proposals, stating that it may support (rather than is likely to support) disclosure requests that aid in understanding how companies manage material risks that affect their long-term performance.  It will continue to reject shareholder proposals that are inconsistent with long-term financial value or that seek to micromanage companies.

BIS will no longer routinely explain to companies its rationale for supporting shareholder resolutions.  However, its updated policy describes some of the factors it considers when evaluating them:

• Consistency between the specific request made in the proposal, the supporting documentation and the proponent’s other communications on the issue.
• The costs and benefits to the company in complying with the request.
• The company’s governance practices and disclosures relative to those of peers.
• The legal effect of the proposal, such as whether it is precatory or binding or if it would be deemed illegal in a given jurisdiction.

BIS has removed its discussion on escalation efforts, including supporting a shareholder proposal or voting against directors, if a company has not shown sufficient urgency in addressing a material risk.

¹ See BlackRock’s 2026 U.S. benchmark proxy voting guidelines and engagement priorities at and .

Glass Lewis has published its 2026 U.S. benchmark policy updates, which will take effect for shareholder meetings on or after Jan. 1, 2026.¹  The substantive changes pertain to mandatory arbitration provisions and Glass Lewis’s pay-for-performance (PFP) methodology, which is addressed in more detail in a separate document.²  Other sections of the guidelines have been clarified, including supermajority voting provisions, certificate and bylaw amendments that reduce shareholder rights, and company omissions of shareholder proposals.

Glass Lewis has also updated the language in the document to clarify that the guidelines contain the views of its benchmark policy, which reflects broad investor opinion and widely accepted governance principles.  Beginning in 2027, it will transition from a single house view to a suite of research perspectives to inform clients’ proxy voting decisions.³

Mandatory Arbitration Provisions

Glass Lewis has amended its benchmark policy to include its approach to mandatory arbitration provisions, which restrict shareholders’ legal recourse and limit the transparency and legal certainty that public court rulings provide.   In September 2025, the SEC issued a policy statement that facilitated companies’ ability to include these provisions in their governing documents, if consistent with state law, when contemplating an initial public offering (IPO).⁴

If a company’s governing documents include a mandatory arbitration provision or other potentially negative provision following completion of its IPO, spin-off or direct listing, Glass Lewis may recommend against the governance committee chair or the entire committee.  Glass Lewis will also oppose any bylaw or charter amendment seeking to adopt a mandatory arbitration provision without a compelling rationale, among other factors. 

PFP Evaluation

Glass Lewis has made significant changes to its proprietary PFP model, including replacing its historical A-F letter grade system with a scorecard-based approach to evaluating PFP alignment relative to Glass Lewis-selected peers over a five-year measurement period.  Final alignment scores, which range from 0 to 100, are determined by the weighted sum of up to six tests, each with their own concern rating (ranging from severe to negligible).  The tests include:

• CEO granted pay vs. total shareholder return (TSR)
• CEO granted pay vs. financial performance (revenue growth, return on equity, return on assets and sector-specific metrics)
• CEO short-term incentive (STI) payouts (as a percentage of target) vs. TSR
• Total named executive officer (NED) granted pay vs. financial performance
• CEO compensation actually paid vs. TSR
• Qualitative features (downward modifier)

This analysis informs Glass Lewis’s voting decisions on say-on-pay proposals.  Companies with an overall rating of “severe” or “high” concern are more likely to receive a negative recommendation.

 Shareholder Rights

Currently, Glass Lewis recommends against the chair of the governance committee, or the entire committee, if the board unilaterally amends the governing documents to reduce or remove important shareholder rights, or to otherwise impede the ability of shareholders to exercise such rights.  Glass Lewis has added the following to its list of board actions that would prompt a negative recommendation:

• The adoption of provisions that limit shareholders’ ability to submit proxy proposals.
• The adoption of provisions that limit shareholders’ ability to file derivative suits.
• The adoption of a plurality, rather than a majority, voting standard in director elections.

The updates reflect recent revisions to the Texas Business Organizations Code (TBOC) which allow publicly listed companies domiciled in the state to impose higher ownership thresholds for shareholders to submit proposals than required under SEC Rule 14a-8.  In addition, certain states, such as Texas and Nevada, have adopted laws permitting companies to impose ownership thresholds for shareholders to initiate derivative actions.

 Amendments to the Certificate of Incorporation and/or Bylaws

Glass Lewis has consolidated its approach to amendments to the certificate and/or bylaws into a single section of the policy document.  In its case-by-case evaluation, Glass Lewis will generally support amendments proposed by management that are unlikely to have a material negative impact on shareholders’ interests, such as technical amendments.  It will continue to discourage the practice of bundling amendments into a single proposal, which could lead to an adverse recommendation if any of the amendments are of significant concern.

Supermajority Voting

Glass Lewis is codifying a case-by-case approach to management proposals to repeal supermajority voting provisions to take into account situations where the company has a large or controlling shareholder and a supermajority requirement may protect the interests of minority shareholders.   In such cases, Glass Lewis will oppose the resolution.  Its current policy favors a simple majority vote to approve all matters presented to shareholders.

Excluded Shareholder Proposals

Glass Lewis adheres to the view that shareholders should be afforded the opportunity to vote on all matters of material importance.   Currently, it makes note of instances where a company has successfully petitioned the SEC to exclude a shareholder proposal through the no-action process.  If it believes that the exclusion is detrimental to shareholders, it may recommend against the governance committee members.

Glass Lewis has removed this guideline in view of the SEC’s mid-November announcement that, due to resource constraints following the recent government shutdown, it will not be responding to most no-action requests through Sep. 30, 2026.  Glass Lewis will monitor the SEC’s ongoing changes to the shareholder proposal process and may update its policy on omissions prior to or during the 2026 proxy season.

Institutional Shareholder Services (ISS) has published its U.S. benchmark policy updates for the upcoming proxy season, which will take effect for shareholder meetings on or after Feb. 1, 2026¹. As detailed below, the revisions mirror the changes ISS proposed in October and are concentrated around the following topics: multi-class capital structures, executive and non-employee (NED) compensation, and environmental and social (E&S) shareholder proposals. Notably, ISS is adopting a more flexible approach to certain issues, including giving companies more latitude in their choice of equity pay awards and their responsiveness to say-on-pay (SOP) votes, as well as moving away from its default position of supporting specific categories of E&S resolutions.

ISS has additionally made minor edits to the policy document, including eliminating information that is duplicated in its U.S. Peer Group, U.S. Executive Compensation Policies and U.S. Equity Plans FAQs, which will be updated in mid-December.

Problematic Capital Structure/Unequal Voting Rights

ISS is eliminating inconsistencies in its treatment of capital structures with unequal voting rights by considering them problematic regardless of whether superior voting shares are classified as “common” or “preferred.”  Preferred shares that only have voting rights with respect to items that affect their class of holders are not considered problematic.

ISS will oppose management proposals to create a new class of preferred stock with voting rights superior to the common stock with the following exceptions:

• Convertible preferred shares that vote on an “as converted” basis; or
• The enhanced voting rights of the preferred shares are limited in duration and applicability and are voted in a way that mirrors the votes of the common shares.

The same exceptions will apply to ISS’s policy of recommending against directors, committee members or the full board (other than new nominees) at companies that maintain multi-class capital structures with unequal voting rights.

 Long-Term Alignment in Pay-for-Performance (PFP) Evaluation

ISS is extending the time horizon of its U.S. PFP quantitative screens (Relative Degree of Alignment and Financial Performance Assessment) from three years to five years to better reflect how investors assess a company’s long-term performance when evaluating CEO compensation relative to peers.

ISS’s assessment of pay quantum (Multiple of Median test) will now incorporate both one-year and three-year views of CEO pay relative to peers to smooth out short- to mid-term fluctuations, unusual one-time events, or external factors.

 Time-Based Equity Awards with Long-Term Time Horizon

ISS is taking a more flexible approach in evaluating the equity pay mix in its PFP qualitative analyses whereby time-based equity awards with extended time horizons will be viewed positively.

Although ISS did not provide further details, a plurality of investor respondents to its 2025 policy survey considered time-based awards with three-year vesting plus a two-year post-vesting retention requirement to be sufficiently long-term to dispense with performance requirements for part or all of executives’ long-term incentive awards.

Company Responsiveness to SOP Votes

ISS will be more flexible towards company responsiveness to a low (less than 70%) SOP vote in the prior year in cases where shareholder feedback is difficult to obtain because of recent SEC guidance regarding Schedule 13G (passive) versus Schedule 13D (active) filing status for institutional investors.  If a company discloses that it attempted but failed to elicit sufficient feedback from its investors, ISS will assess the company’s actions taken in response to the vote and how they are beneficial to shareholders when recommending on the reelection of compensation committee members.

ISS has also clarified the factors it considers in the case of low SOP support related to an unusual situation, such as a proxy contest, merger or bankruptcy.  In addition to the disclosure of engagement efforts and relevant compensation actions, ISS will take into account significant board turnover.

High NED Pay

ISS is expanding its policy on high NED compensation, allowing for adverse recommendations against the responsible board committee in the first year of occurrence of highly problematic pay or when a pattern emerges across non-consecutive years.  Currently, negative recommendations are only triggered after two or more consecutive years of excessive NED pay absent a compelling rationale or other mitigating factors.

Problematic NED pay practices include large pay magnitude; performance awards, retirement benefits and excessive perquisites; and inadequate disclosure of the rationale for unusual payments.  NED pay practices that are only marginally problematic in the absence of other escalatory factors or multi-year patterns will continue to receive warnings only.

Equity Plan Scorecard (EPSC) Enhancements

ISS is adding a new scoring factor under the Plan Features pillar of its EPSC that will assess whether equity plans that include NED participation disclose cash-denominated award limits, which is considered best practice.  For 2026, the NED individual award limit factor will only apply to S&P 500 and Russell 3000 ESPC models.

ISS is also introducing a new overriding negative factor where an equity plan proposal will receive a negative recommendation if it lacks sufficient positive features under the Plan Features pillar, despite an overall passing score.  For 2026, this will apply to S&P 500, Russell 3000, and non-Russell 3000 EPSC models.

E&S Shareholder Proposals

ISS is implementing a fully case-by-case approach to shareholder proposals on diversity, political contributions, human rights and climate change/greenhouse gas emissions to reflect shifting investor sentiment, declining support for such proposals, regulatory changes and evolving company practices.  Currently, ISS generally recommends in favor of such proposals, though its level of support has been falling in recent years.²

Globally, ISS will continue to apply a consistent case-by-case framework to its evaluation of E&S proposals.  It is adding a new factor on whether the proposal addresses substantive matters that impact shareholders’ interests, including shareholder rights.

Foreword

For the past three years, ������Ƶ has had the privilege of guiding listed companies across EMEA in preparing for their Annual General Meetings.

Though relatively new to the market, we have forged an alliance of seasoned professionals, market specialists, and emerging talent—united by a shared commitment to delivering a truly distinguished client experience.

As one client graciously observed: “You anticipate questions our board, legal, or investor relations colleagues have not yet considered.”

It is precisely this blend of insight, creativity, and meticulous attention that defines our approach to governance and shareholder engagement.

This Season Review reflects the collective expertise of our team, drawing on our work across the United Kingdom, Germany, Switzerland, Austria, and Spain. It provides a considered overview of the 2025 Shareholder Meeting Season -the triumphs, the challenges, and the notable trends- and offers our perspective on the forthcoming 2026 season.

Particular attention is given to ESG and Sustainability reporting across the region. While investors have streamlined their guidelines in response to the evolving political landscape, they are exercising heightened scrutiny regarding the quality and integrity of disclosures.

Board composition, qualifications, and independence continue to be the primary drivers of shareholder dissent. However, the rationale for opposition is evolving, with increased focus on committee effectiveness, responses to previous shareholder concerns, and preparedness for both short- and long-term strategic imperatives.

Remuneration matters remain closely examined, with the United Kingdom, in particular anticipating a new wave of policies for shareholder consideration.

We hope you enjoy this edition, and we invite you to remain engaged with our team’s weekly updates via our dedicated news channel.

Tom & Angelika

The institutional investors’ vote, when it relates to a corporate board, is typically not to appoint the Executive Board. The investor can only appoint the Supervisory Board, who then in turn appoints the Executive Board.

It is therefore imperative for all investors to consider and guide their voting choices very carefully.

But without sufficient information, it is impossible to make an informed voting decision.

Companies typically publish the candidates and their CV, which should contain a certain set of information. But for many investors and proxy advisors, this is not enough. Therefore, the demand of insightful board matrices is growing.

A good board matrix helps investors and proxy advisors to assess the board and its candidates in relation to age, gender, nationality, relevant expertise, skills and knowledge, cultural background and so on.

Imagine your board matrix as the business card of the company.

(Investor statement during a corporate governance engagement call)

But such a matrix is not exclusively useful for shareholders. It provides also benefits for the company itself. Having a structured approach and overview about the single directors per se and as a board, provides important insights about areas of improvement and necessary future changes.

Even though this paper is mostly about the (non-executive) supervisory board, its members and candidates, similar rules and expectations are rising about the management board.

������Ƶ has extensive experience in creating board matrices from scratch or refining existing ones. Our approach combines impactful personal director information with relevant & meaningful skills disclosure. Contact us today to learn more about optimizing your board’s composition and disclosure.

The Set-up

In a column-oriented board matrix, the upper part should include insights about the following categories:

Tenure, Biographical & Gender

• General identity, start/end dates, duration of service and gender.

Role & Classifications

• The director’s status within the board and committees.

Background & Experiences

• Professional background, expertise, international experiences.

Governance & Assessment

• Metrics to rate the director’s compliance.

The lower part is dedicated to the set of board skills, and how the single director rates against them. For this bottom part, there is no one-size-fits-all approach. Different markets and each industry requires a customized approach.

For example, a company with an M&A related growth strategy, skills and experiences in it should be represented on board level, and be represented in the board matrix, too.

Best Practice

Some additional best-practice recommendations to consider:

Connectivity with the CV

• All information from the matrix should be reflected in the CV, being comprehensible and verifiable.

Objectivity

Many such matrices are based on self-assessments. To increase the credibility of the entire matrix, an external assessment is preferrable.

Differentiation

• Not having a skill in every single category is not a sign of lack of awareness, but rather demonstrates a realistic self-assessment.

Degrees of Fulfilment

• Skills should not be shown as yes/no only. There are shades between a limited and an expert level, which should be expressed in the matrix.

Example

While our own customized approach goes even beyond this detailed example from the , it shows the approach of an upper section with details about the director, and the lower section with a skills rating.

Voting Guideline Excerpts – Proxy Advisory

Proxy Advisors Institutional Shareholder Services (“ISS”) guidelines and the Glass, Lewis & Co. (“Glass Lewis”) approach differ as they issue a Continental Europe guideline which is accompanied by the German and Austrian market-dedicated specific guideline. The Continental Europe guidelines and the additional market-specific versions complement each other.

ISS: Continental Europe

• “Adequate disclosure“ expected for director elections.

Glass Lewis: Continental Europe

Information that Glass Lewis considers particularly critical for shareholder review when evaluating a candidate for election include the following:

• the independence of the nominee;
• the nature of any relationships between the nominee and the company, its directors and executives, major shareholders and any other related parties;
• the current occupation and outside directorships held by a nominee; and
• the relevant experience and skills possessed by a nominee.

Glass Lewis: Guidelines for Germany

• The supervisory board is recommended to prepare a profile of skills and expertise for the entire supervisory board. The profile of skills and expertise should be disclosed in the format of a qualification matrix.

Glass Lewis: Guidelines for Austria

• Glass Lewis believes companies should disclose sufficient information to allow a meaningful assessment of a board’s skills and competencies.

IVOX (applying BVI rules)

• The critical factors for electing and discharging the members of the executive and non-executive supervisory board or board of directors are (…) missing clear allocation of the required qualifications, as indicated in the profile of competencies of the entire supervisor board, to the individual candidates in the form of a qualification matrix.
• The critical factors for discharge of the members of the executive/management board, the supervisory board or the board of directors are (…) lack of expertise of the supervisory board in  relation to sustainability issues and/or failure  to disclose sustainability expertise in the form of a qualification matrix.

Executive Summary

In 2025, Canada’s corporate governance landscape will be shaped by a combination of evolving disclosure frameworks, a tightening global regulatory environment, and the increasing influence of geopolitical and technological factors. Board diversity expectations, cyber risk oversight, and AI governance are rising as defining pillars of Canadian governance. While ISS and Glass Lewis only implemented slight policy revisions, investor scrutiny remains high across directorship standards, executive pay, and ESG oversight. Data from Diligent’s voting platform shows that remuneration proposals saw the widest variation in support, reflecting intensified investor focus on compensation governance. Meanwhile, the political divergence between the U.S. and Canada over DEI (Diversity, Equity, and Inclusion) policies has generated tension, especially for Canadian issuers with dual listings.

Further complexity has emerged from new SEC rules in the U.S., leading to more cautious engagement strategies by major investors. Meanwhile, Canada’s regulatory bodies, notably the OSC (Ontario Securities Commission) and CSA (Canadian Securities Administrators), are enhancing their commitment to transparency and board accountability, particularly on AI and sustainability matters. Notably, activism surged in Canada this year, with TD Bank’s AGM drawing national attention over governance failures linked to money laundering investigations. Overall, as 2025 unfolds, Canadian companies must balance a maturing principles-based governance regime with increasingly rule-driven global investor expectations.

AGM Voting Trends

Diligent’s aggregated voting data for 2025 paints a nuanced picture of investor sentiment across governance categories:

While director elections and committee-related proposals saw strong average support, low-end figures suggest isolated opposition to certain board members or audit practices. The remuneration category, however, displayed both the highest volatility and lowest minimum support, underlining investor concerns around pay-performance alignment and equity-based incentives.

Proxy Voting Guidance & AI Oversight

Glass Lewis and ISS released modest revisions to their 2025 Canadian proxy policies. Both emphasized the need for increased transparency in board oversight of emerging risks, particularly around AI and cyber governance. Glass Lewis introduced formal expectations for companies developing or using AI to disclose oversight structures, ethical frameworks, and board expertise in the area. It warned that directors could be held accountable where inadequate AI governance leads to shareholder harm.

ISS reaffirmed its stance on director independence, committee composition, and board refreshment, while flagging climate accountability and ESG-linked pay as growing areas of focus. While neither advisor introduced significant overhauls, the messaging was clear: scrutiny around board capabilities and ethical tech use is intensifying.

Political & Regulatory Context: DEI, Engagement & Diverging Jurisdictions

The U.S. political shift following President Trump’s return to office has cast a shadow on corporate governance norms in North America. His January 2025 executive order to dismantle DEI programs prompted ISS to suspend enforcement of board diversity guidelines for U.S. companies. Glass Lewis, conversely, upheld its DEI commitments. This divergence places Canadian companies with U.S. listings in a precarious position, as they face conflicting stewardship expectations.

Domestically, the CSA and OSC remain committed to progressive disclosure standards. Finalized diversity amendments are expected to mandate expanded reporting on board and executive composition, covering Indigenous peoples, racial minorities, and LGBTQ2SI+ groups. These reforms reflect a continuation of Canada’s principles-based, comply-or-explain approach.

New SEC rules enacted in February 2025 added further complexity. Under these changes, even passive investor communications may be construed as efforts to influence corporate control. This has led large institutional investors such as BlackRock and State Street to adopt a “listen-only” posture in engagements, effectively muting shareholder dialogue during the proxy season.

Shareholder Activism & Governance Flashpoints

Activist campaigns surged in Canada throughout 2025, with 49 tracked between January to mid-June 2025. The most high-profile case involved Toronto-Dominion Bank (TD). The bank’s AGM featured 11 shareholder proposals, many focusing on governance and oversight weaknesses stemming from ongoing anti-money laundering (AML) investigations. Investor concerns included board accountability, executive risk oversight, and transparency on regulatory compliance. The event has become a bellwether for broader governance expectations across the financial sector.

Elsewhere, the rise in activism reflects growing investor impatience with legacy board structures, insufficient ESG responsiveness, and inconsistent remuneration practices. Proxy advisors and institutional shareholders are placing greater emphasis on board effectiveness, risk oversight, and responsiveness to prior vote outcomes.

Conclusion

Canada enters the second half of 2025 with a strong, principles-based governance model, but one now navigating global crosswinds. Board diversity, ESG stewardship, cyber resilience, and AI governance have emerged as core focal points. While ISS and Glass Lewis continue to calibrate expectations, institutional investors are raising the bar. Companies must ensure they are not only compliant but genuinely responsive to shifting stakeholder concerns. Going into 2026, boards are encouraged to deepen expertise in ethical technology use, enhance disclosure practices, and align remuneration with both financial and non-financial metrics. In a world of regulatory fragmentation and rising activism, agility and transparency will define good governance.