What Investors Want to Know from Your Proxy: Top 5 Insights from Leading Experts

Third Economy convened a panel of investors and governance experts on February 26, 2026, to explore the shifts underway in proxy voting and shareholder engagement this season.

We were joined by four leading voices in the field: Cindy Paladines, Head of Engagement for TCW; Scott Zdrazil, Principal Investment Officer for the Los Angeles County Employees Retirement Association; Bob McCormick, Executive Director of the Council of Institutional Investors; and Ken Bertsch, Governance Advisor to Broadridge.

The bottom line: investors want clearer evidence that boards are fit for purpose, that shareholder rights are protected, and that disclosures—from proxy content to sustainability reporting and executive pay—are structured in ways that both humans and AI-driven tools can use to assess long-term value.

Below are five key insights from our panelists.

1. Board Quality and Investor Rights Remain at the Center of Every Vote

Board composition and basic investor rights continue to drive voting decisions and scrutiny is only getting sharper.

Investors want to see a skills matrix that clearly ties director capabilities to the company’s strategy and key risks, alongside a thoughtful mix of tenure, backgrounds, and perspectives; the ability of the director to provide appropriate and independent oversight also remains central to investor decision-making. Critically, they’re looking for a clear narrative explaining why each nominee is the right fit—right now.

Investors still expect geographic and demographic diversity and are focusing on whether boards are drawing from a genuinely broad talent pool. Even where companies have scaled back granular data, the expectation for evidence of cognitive diversity and inclusive recruitment processes remains.

On investor rights, our panelists were direct: a bundle of weak provisions—like a classified board combined with plurality voting—functions as a red flag and can trigger votes against key directors. Dual-class structures are also problematic but can be rendered tolerable when accompanied by sunset provisions, a feature increasingly built into recent IPOs. 

2. Shareholder Engagement Is More Fragmented Than Ever 

The investor landscape companies face today is no longer “one firm, one stewardship team.” Three dynamics are making engagement significantly more complex.

• Split voting teams is becoming the norm at the largest managers. Firms like BlackRock, Vanguard, and State Street are splitting voting responsibilities between active and index (or otherwise differentiated) teams. Companies may need to engage multiple teams within the same institution—each with potentially different priorities and perspectives.

• A more cautious engagement posture due to 13D/13G changes. To manage legal risk, some large investors are less willing to express reasons for voting against board members and may have adopted more “listen-only” postures, added formal disclaimers to engagements, and pulled back from signaling how they intend to vote. The result is less clarity for companies about why a vote went the way it did.

• Pass-through voting is diluting the “house view.” As with share lending, programs that allow underlying fund investors to vote their own shares mean the largest managers may control a smaller portion of the actual vote than they appear to. Understanding who is genuinely making voting decisions—and tailoring outreach accordingly—is increasingly difficult.

3.  AI Is Now a Gatekeeper to How Your Proxy Is Understood

AI and automation are rapidly changing how investors process disclosures and companies that ignore this will risk having their story told for them.

JPMorgan has publicly announced the use of AI in proxy voting and many other firms – big and small - are also actively testing AI frameworks to align voting decisions with their policies. Third-party data scraping tools are increasingly synthesizing what’s in proxies and other filings before a human analyst ever reads them.

The practical implication: if it’s not in the proxy, it may not exist for the machine. Nuance shared only in private engagement—or buried in supplemental materials—may be missed entirely by AI-driven systems. Companies should assume their proxy will be AI-scraped as much as human-read.

Proxy organization matters. Headings, keywords, and consistent terminology shape how AI interprets and categorizes a company and well-structured disclosures help ensure that investors’ models reflect the narrative a company intends to convey, not an incomplete or distorted version of it.

4.  Sustainability and Pay Disclosure Need More Context, Not More Data

On sustainability, more disclosure doesn’t automatically equal better disclosure. What investors are increasingly looking for is disclosure grounded in financial materiality and connected to a coherent business narrative.

That means explaining why specific issues matter to your industry and to your business model—not just reporting metrics in isolation. Investors are looking for direction of travel: historical progress over time and they’re paying attention to follow-through. Companies that set commitments and quietly abandon them without explanation are losing credibility.

On executive compensation, investors want more context on the “how” and “why” behind pay outcomes—including how goals were set, what judgment was applied, and how pay aligns with actual performance.

5. Practical Steps Companies Can Take This Season

For corporate issuers looking to better meet investor expectations this season, our experts offered three concrete, near-term actions:

Upgrade your proxy narrative. Use plain-English philosophy statements on governance and pay—not just dense legal descriptions. Provide comprehensive director skill summaries and connect them explicitly to strategy and risk oversight. Avoid bundling distinct voting items where shareholders reasonably expect to vote issues separately.

Optimize for AI, not just the reader. Use consistent terminology, clear headings, and structured formatting throughout your proxy. If a fact matters to your story, it needs to be in the document itself—not just communicated verbally in engagements.

Document your engagement. Given the fragmentation in the investor landscape, showing that you’re actively reaching out—and responding to what you hear—carries more weight than ever. Your proxy should reflect that dialogue.

The Bottom Line

Investors are moving away from simple box-ticking toward a more principle-based, data-enabled assessment of boards, governance, and ESG. Proxies that clearly explain board fit, protect core rights, and present consistent, AI-friendly narratives will be better positioned in this evolving environment.

If we can be helpful as you consider how these insights will affect your business, please don’t hesitate to reach out to our team.

Contact us:

Abbe Billings, Partner, Third Economy
abbe.billings@thirdeconomy.com

Disclaimer: The summary provided does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only.