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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.