Proxy Voting in 2027: US Executive Order, ISS/Glass Lewis Changes, and implications for European issuers

• The US Executive Order on proxy advisors (Dec 2025) increases federal oversight of ISS and Glass Lewis, raising questions about politicised advice, conflicts of interest, and fiduciary responsibility.
• Asset managers are restructuring stewardship operations and experimenting with AI-driven voting tools, while proxy advisors are evolving their business models to meet changing client demands.
• European regulators are reviewing the Shareholder Rights Directive II and considering new rules for proxy advisors, including potential EU-level registration and enhanced transparency requirements.
• European issuers likely face a more fragmented AGM voting landscape, with investor priorities increasingly shaped by customised research and individual stewardship approaches.
• Companies can respond by mapping shareholders, engaging proactively with investors and proxy advisors, tailoring communications, and monitoring regulatory developments to influence voting outcomes effectively.

Institutional Shareholder Services (ISS) and Glass Lewis together account for approximately 90% of the proxy advisory market and are instrumental in how global institutional investors exercise their voting rights. As such, the directive could have meaningful consequences for how shareholders of European companies shape their voting strategies and execute their voting decisions.

The aim of the Executive Order from December 2025 is to investigate whether proxy advisors, particularly ISS and Glass Lewis, (i) provide investors with advice on factors such as Diversity Equity and Inclusion (DEI) and Environmental and Social and Governance (ESG), while also examining the legal and financial practices of the firms.

Additional regulatory oversight of the proxy advisory industry has become a central theme in the US corporate governance debate, with prominent figures increasingly scrutinising the proxy advisory business model. It should also be noted that proxy advisors have been subject to market-level regulatory oversight in European jurisdictions, as well as at the EU-level, for many years.

Although no new regulation or legislation has been enacted yet, the directive has already prompted reactions from proxy advisors and investors in the US and internationally, raising the question of whether the EU is also moving toward stricter regulation.

While the directive has drawn significant attention, it comes at a time when the broader proxy voting ecosystem is already undergoing substantial change across regulation, proxy advisor business models, and investor stewardship practices. Asset managers are restructuring their stewardship operations, some investors are experimenting with AI-driven voting tools, and proxy advisors themselves are adapting their business models in response to evolving client demands and regulatory scrutiny. Together, these developments are reshaping how institutional investors approach proxy advice and voting decisions globally.

This article examines the broader set of developments shaping the proxy advisory landscape and considers their implications for European issuers, including:

• The White House’s executive order aimed at proxy advisors
• Glass Lewis announces retirement of Benchmark policy from 2027 onwards
• Investors change stewardship processes and introduce AI-based voting tools
• The EU considers how to adapt its own regulatory framework
• The implications for European companies following the evolving external landscape for proxy advisors
• Taking action: Key priorities for European issuers in today’s evolving landscape

US Executive Order on Proxy Advisors: Key measures and likely market impact

The Executive Order directs the Securities and Exchange Commission, Federal Trade Commission and Department of Labor to review and revise the regulations governing proxy advisors. The order directs:

• The Securities and Exchange Commission to:
  • Review and revise all rules governing proxy advisors and shareholder proposals
  • Enhance transparency and disclosure requirements, especially on conflict of interest
  • Enforce anti-fraud provisions against proxy advisory firms with respect to their voting recommendations, which could result in the issuing of penalties for recommendations containing mistakes, omissions, or misleading information
  • Assess requirements for registration as investment advisors
  • Consider stricter oversight of proxy advisors
• The Federal Trade Commission to:
  • Investigate potential “unfair, deceptive, or anticompetitive practices” by proxy advisors
• The Department of Labor to:
  • Strengthen fiduciary standards for pension and retirement plan managers
  • Focus on proxy advisor use and ESG-related investment advice

The Executive Order could have a significant impact on the proxy advisor industry if US federal agencies pursue restrictive measures against proxy advisors following their reviews. It has been reported that the White House is considering the following measures:

• Restricting proxy advisor recommendations
• Forcing proxy advisors to spinoff consulting arms
• Limiting index-fund managers’ voting authority
• Raising thresholds for shareholder proposals

The potential changes signposted by the Executive Order have also prompted discussion among European policymakers about whether the current regulatory framework remains fit for purpose.

Glass Lewis to retire benchmark policy: Shift to “Voting Perspectives” and what it means for issuers

Amid evolving investor expectations and in anticipation of increased regulatory oversight, Glass Lewis announced changes to its business model to better align research and voting recommendations with client needs. On 15 October 2025, Glass Lewis issued a press release announcing that it plans to implement two major changes to its business model:

• “Glass Lewis will help all clients move beyond standard policies, guiding them in creating voting frameworks that reflect their individual investment philosophies and stewardship priorities.”
• “Glass Lewis will move away from singularly-focused research and vote recommendations based on its house policy and shift to providing multiple perspectives that reflect the varied viewpoints of clients.”

Consequently, Glass Lewis will retire its benchmark voting policy recommendations from 2027 onwards and move away from research and voting recommendations based on a single benchmark policy. Instead, the proxy advisor will pivot towards providing multiple “voting perspectives” that reflect its clients’ diverse viewpoints. This aligns with the increased emphasis on tailored research while also reducing the risk that a ‘house’ could be seen by regulators as influenced by factors unrelated to investor returns.

Investor Stewardship is fragmenting: Voting choice and AI-driven proxy voting tools

Alongside increased regulatory scrutiny and changes at proxy advisors, investors themselves are recalibrating how they approach stewardship and proxy voting. These shifts reflect growing expectations around fiduciary accountability, transparency and governance over voting decisions, particularly in an environment where the use of proxy advice is drawing increased political and regulatory attention.

Several leading investors, including BlackRock, Vanguard and State Street, have recently made changes to their stewardship models. A notable example is BlackRock’s decision to separate stewardship for actively managed and passively managed strategies. BlackRock Investment Stewardship now oversees voting and engagement for passively managed funds, while BlackRock Active Investment Stewardship is responsible for actively managed portfolios. These teams operate under separate voting policies and engagement approaches and may reach different voting outcomes at the same company, requiring issuers to engage with them independently.

Investor stewardship is also becoming more fragmented through the expansion of voting choice programmes. Many large asset managers now allow eligible underlying investors in certain pooled vehicles to influence how their shares are voted, whether by following the asset manager’s house policy, selecting a third‑party benchmark or thematic policy, or casting votes directly on company resolutions. While participation rates vary, these programmes reduce reliance on a single, standardised voting approach and further weaken the link between proxy advisor benchmark policies and ultimate voting outcomes.

In addition, some investors are reassessing their reliance on traditional proxy advisors altogether. In January 2026, J.P. Morgan Asset Management announced that it would stop using ISS and Glass Lewis and instead implement an internally developed AI‑driven voting system, Proxy IQ. This move highlights a broader trend toward bespoke internal tools, greater control over voting rationales and increased use of data and automation within stewardship processes.

Taken together, these developments point to a more complex and decentralised proxy voting environment. Voting outcomes are increasingly shaped by a mix of internal investor policies, customised frameworks, underlying client preferences and proprietary analytical or AI‑based tools, rather than a small number of standardised benchmark policies.

Proxy advisor research remains relevant, but now typically operates as one input among many, with its influence varying across strategies, products and sometimes within a single asset manager. For European issuers, this means voting behaviour is becoming more fragmented and less easily inferred from proxy advisor positions alone, making insight into how key shareholders structure stewardship and apply voting inputs increasingly important ahead of general meetings.

EU Proxy Advisor regulation and SRD II review: Registration, transparency, and next steps

Building on these global shifts in investor stewardship and proxy advisor practices, highlighted by the recent US directive, the EU is reviewing its own regulatory framework to ensure oversight remains fit for purpose.

The EU’s current framework of proxy advisor regulatory oversight includes the Best Practice Principles and the Shareholder Rights Directive II (2017). A comprehensive review of the revised Shareholder Rights Directive II (SRD II) was published in 2023 by ESMA and EBA, agencies of the European Union. The report advised the European Commission to consider strengthening oversight of the proxy advisory industry, particularly in relation to conflicts of interest and transparency requirements. In addition, the report recommended the introduction of an EU‑level registration mechanism for proxy advisors to enable more systematic supervision and consistent regulatory standards across member states.

This report, together with pressure from other key stakeholders, has resulted in the EU Commission considering how to conduct a potential review of SRD II, with proxy advisors remaining a key focus area. On 11 February 2026, the Commission began this process with a public consultation on updating the rules on shareholder rights, structured as a questionnaire. Stakeholders can provide feedback until 6 May 2026 and a decision about whether to proceed with the review is expected to be made by the end of 2026. The proxy advisor-related questions focus on:

• The extent to which the current regulatory framework has been successful in improving the reliability, comparability and quality of advice of proxy advisors
• The key problems associated with proxy advisors (e.g. conflicts of interest, transparency, adherence to code of conduct, accountability, engagement with companies)
• What regulatory tools the Commission should implement moving forward (e.g. code of conduct, disclosure requirements, proxy advisor registration)

While US regulators appear to be considering more far-reaching interventions than their European counterparts, proxy advisors will have to adapt to all changes by both regulators which will likely impact their business models.

Implications for European issuers: A more fragmented AGM voting landscape

As US and European regulatory changes, shifts in asset manager stewardship, and evolving proxy advisor practices converge, European companies will likely face a more fragmented AGM voting landscape, where expectations and priorities are increasingly dependent on investors’ own systems and customised research (and may vary within the vote of a single institution). This places new demands on dialogue, transparency and the positioning of proposals at the general meeting.

In this environment, it is crucial for issuers to thoroughly understand their shareholders and the motivations driving their voting decisions. Developing robust investor intelligence, insights into shareholder profiles, preferences and strategic interests, will enable companies to tailor their engagement approach and shape their governance strategy. It will also help companies craft a compelling narrative that resonates at the general meeting. By proactively analysing investor behaviour and motivations through structured Investor Relations activity, organisations can anticipate shifts in voting patterns, address concerns in advance and align their proposals with shareholder priorities. Where proposals face heightened scrutiny, proxy advisory support adds a further layer of insight, helping companies understand how their case is likely to be assessed and position it effectively.

To support this, Computershare's Investor Engagement brings together all three capabilities, Investor Intelligence, Investor Relations, and Georgeson Advisory, providing the tools and services companies need to gain deeper insight into their investor base, facilitate effective communication and build relationships that drive positive engagement and informed voting.

What European issuers should do now: 5 Actions to prepare for changing proxy voting

1. Identify your shareholders. Assess their level of dependence on proxy advisor research and evaluate which stewardship team has the voting authority. As asset managers separate their active and passive stewardship functions and some move away from ISS and Glass Lewis in favour of proprietary AI tools, a single institutional investor may now encompass multiple teams with distinct voting approaches.
2. Maintain regular dialogue with investors. Understand how they are adjusting their stewardship processes, voting priorities and application of proxy advisor research and/or AI-based tools. With Glass Lewis retiring its benchmark policy in 2027 and investors increasingly operating under customised frameworks, assumptions about how a given investor will vote can no longer be based on proxy advisor house policies alone.
3. Engage with proxy advisors. Understand how issuers can ensure that the information and recommendations being published about the company are factually correct and appropriately reflect its specific context. As proxy advisors face greater scrutiny from US and EU regulators, the accuracy of their published research is coming under sharp focus, making proactive engagement important.
4. Tailor investor-facing materials. Cater to audiences with varying priorities, ensuring content is clear, transparent and machine readable. The shift towards customised research and AI-driven voting tools means disclosure materials must serve both human reviewers and automated systems, and speak to the diverse stewardship priorities of a fragmented investor base. Corporate information should be AI readable so that the information is not overlooked, and considered by a growing investor base using AI to identify exceptions or controversies.
5. Monitor the EU regulatory developments. Follow the SRD II revision as future proxy advisor rules will affect the entire governance ecosystem.