"it is increasingly clear that proxy advisers have undue influence....many companies would argue that their information is frequently not balanced, not representative of the full view, and not accurate."
"Elon Musk blasted ISS and Glass Lewis as "corporate terrorists" after the proxy advisers attempted to usurp voting power rightfully belonging to the shareholders."
"ISS directly sells advice to the institutional investors on voting their proxies while at the same time it sells advice to management on how to protect itself from these investors' proxies."
Proxy advisory firms wield outsized influence over shareholder voting and often provide information that is unbalanced, unrepresentative, and inaccurate. Conflicts of interest arise when the same firms sell consulting services to companies they rate and advice to institutional investors, creating pay-to-play appearances. Instances occurred where proxy advisers attempted to usurp voting power, prompting widespread shareholder repudiation. Concerns include outdated checklist methodologies, inconsistent or erroneous recommendations, and lack of accountability or transparency. Proposed remedies include greater regulatory oversight, mandatory disclosure of conflicts, structural separation of consulting and voting advice, and empowering shareholders to cast informed votes.
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