US lobby group urges reform of “outdated” proxy-voting processes

25 April, 2025

Swift action is needed from the US Securities and Exchange Commission (SEC) and Congress to modernise outdated proxy-voting processes, according to a report published on Wednesday (23 April) by lobbyist association Business Roundtable (BRT). 

The non-profit group is based in Washington, DC with a membership of exclusively major US company chief executives. BRT has urged the SEC to reform the shareholder proposal process for public companies, making it more difficult for activists' proposals to make it onto company proxy ballots. 

The BRT’s whitepaper, The Need for Bold Proxy Process Reforms, expressly calls for enhanced oversight of proxy advisory firms to rein in their influence, and a realignment of the proxy process to meet what it sees as the long-term interests of shareholders. 

In recent years, there have been instances where activist investors, many of whom hold minimal financial stakes, have been able to use the proxy process to promote their own public policy agendas with no relation to company performance, the report notes. 

The adds that this shift has led to proxy statements becoming “battlegrounds for contentious social debates”, and undermining discussion over strategic priorities and the intended reasons for stakeholder engagement. 

The targeted policy recommendations the BRT outlined in the report include: 

• Precluding shareholder proposals that advance broad ideological agendas 

• Preventing the abuse of proxy rules through strengthened submission and resubmission thresholds for shareholder proposals 

• Prohibiting ‘robovoting’ (mechanically voting in line with proxy advisor recommendations) 

• Affirming SEC’s authority to regulate proxy advisory firms 

• Enforcing standards for transparency and accountability. 

The stated aim of these recommendations is to tackle a regulatory process at the SEC that the report says has become “inconsistent, opaque and unpredictable”, and largely unaccountable proxy advisory firms that have outsized impact on vote outcomes and corporate governance decisions. 

BRT noted that a wider structural reform is necessary to protect investors, and “to ensure that US capital markets continue to serve as a driver of economic opportunity and growth”.  

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.

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