- The dominance of Institutional Shareholder Services (ISS) and Glass Lewis in the proxy voting system may limit the diversity of perspectives for investors making proxy votes.
- OxProx, a new publicly accessible database, aims to provide a platform for comparing proxy voting records among asset owners and asset managers globally.
- Pension plans and large investors can mitigate the duopoly issue by subscribing to ISS and Glass Lewis, but smaller firms often have no choice but to defer to these dominant players.
- OxProx’s database allows investors and analysts to compare voting records and rationales, facilitating more robust comparisons.
- OxProx’s transparent data can help inform organizations on how to hold firms and investors accountable when their voting runs counter to shareholder and stakeholder interests.
- The proxy voting system is crucial for public companies and investors, and platforms like OxProx can help promote responsible investment and drive positive change in corporate outcomes.
- Incorporating material environmental, social, and governance (ESG) issues into investment analysis is now standard practice for active managers.
- OxProx’s transparency may encourage investors to improve their proxy voting on ESG issues, leading to greater support for proposals with positive net present value.
The proxy voting system has become increasingly important due to growing interest in environmental, social, and governance (ESG) issues. Institutional Shareholder Services (ISS) and Glass Lewis are the dominant players in this space, providing critical guidance to shareholders. However, this dominance may limit the diversity of perspectives available to investors when making proxy votes. To address this, OxProx, a publicly accessible database, has been created to gather, examine, and compare proxy voting records from asset owners and asset managers worldwide. With OxProx, investors and analysts can compare how investors voted their proxies and what their voting rationales were, allowing for more robust comparisons and informed decision making.
While larger investors can subscribe to ISS and Glass Lewis and incorporate their guidance as information inputs, smaller firms often have no choice but to defer to these dominant players. OxProx’s database aims to offer a more diverse range of viewpoints and improve transparency in the proxy voting system. By providing accurate and timely data on how different investors have voted, OxProx can help inform organizations on how to approach and hold firms and investors accountable when their policy voting goes against long-term shareholder and stakeholder interests.
Additionally, platforms like OxProx promote responsible investment and drive positive change in corporate outcomes. Environmental, social, and governance (ESG) factors are becoming increasingly integral to investment decisions. Active managers have now made it standard practice to incorporate material ESG issues into their investment analysis and security selection. By engaging with select companies on ESG issues, managers can provide extra analytical insight and encourage better shareholder and stakeholder outcomes.
OxProx’s transparency may also incentivize investors to improve their proxy voting on ESG issues, leading to greater support for proposals with positive net present value (NPV). This means that voting in favor of ESG proposals could potentially have a positive impact on both financial returns and ESG outcomes.
