Investors’ Expectations of Board Responsiveness Rise

The article explores several significant themes from AQTION’s latest report, which analyses the voting and engagement policies of 65 of the world’s largest institutional investors, collectively managing over $91 trillion in assets.

The key findings highlighted by Gavin include:

1. Investor Expectations of Board Responsiveness

Nearly two-thirds of the Top 65 investors expect boards to respond and engage with their concerns on governance and sustainability. AQTION found that 39 of the 65 investors increasingly expect boards to “seek and address” these concerns and to provide transparent, timely updates. If concerns are not properly addressed, investors may escalate and hold board members accountable.

2. Diversity, Equity, and Inclusion (DEI)

While some investors have dialed back their DEI expectations due to political pressure, 47 of the Top 65 investors continue to maintain boardroom diversity standards, with 32 extending DEI expectations to the workforce of investee companies. AQTION’s report notes that major investors like Goldman Sachs Asset Management, Vanguard, and Capital Group have removed DEI expectations for 2025, while BlackRock has adopted a middle-ground approach, mentioning DEI without providing specific guidelines.

3. Climate-Related Issues

AQTION finds that 41 of the Top 65 investors remain focused on climate-related issues, showing continued engagement with environmental and social topics despite shifting political pressures.

4. Proxy Advisers’ Influence

Only nine of the Top 65 investors rely heavily on proxy advisers, signalling a shift away from traditional advisory influence. This shift contrasts with concerns raised in the U.S. House of Representatives over the power of proxy advisers like Glass Lewis and ISS, as highlighted by a hearing titled “Exposing the Proxy Advisor Cartel.”

The full article can be accessed here.