Proxy season 2025: Exercising shareholder rights remains as important as ever

In a rapidly shifting policy and regulatory environment, it has become more complicated for responsible investors to exercise shareholder rights. However, investors should stay the course – including this proxy season. A holistic and agile approach to stewardship, grounded by clear strategic priorities, will help.

In addition to voting, investors could think about how other stewardship tools could achieve desired outcomes – and we are here to support investors.

Voting is key, but it’s not the only stewardship tool

It is increasingly important to reaffirm our conviction that responsible investment is an apolitical practice which helps to deliver long-term risk-adjusted returns for clients and beneficiaries. It is good for business and has a place at the core of investors’ work.

Despite the headwinds this 2025 proxy season, stewardship remains one of the key means for investors to protect and enhance overall long-term value for clients and beneficiaries. In fact, engaging, voting and other stewardship activities are seen by our signatories as a central tenant of investing responsibly, including to meet climate commitments. For example, approximately 60% of relevant signatories (i.e. those invested in listed equities) have a proxy voting policy or guidelines and around half include guidelines on material sustainability and governance-related factors in those policies.¹ 

What’s more, around a fifth of relevant signatories have been involved in filing or co-filing shareholder resolutions over the past three years,² which is significant given the complexity and effort involved, with a large majority (76%) also reporting that they vote in favour of shareholder proposals that are expected to advance stewardship priorities.³

While this blog focuses on listed equity, using the proxy season to home in on shareholder rights, this conviction is universal across responsible investment portfolios. Having said that, we acknowledge that investors may have to navigate barriers to voting more frequently this season. Investors may have to: 

• adapt their stewardship approach as appropriate;
• consider all tools available to them;
• deploy a stewardship tool(s) that fits the job;
• where possible, use the PRI to support them.

Creating long-term value through stewardship

Shareholder rights are an important component of effective corporate governance. This, in turn, supports the systems that investors rely on in their efforts to deliver long-term risk adjusted returns. Investors are already telling us that the additional ‘noise’ around stewardship practices this year are contributing to an environment that discourages this responsible pursuit of long-term value protection and creation. Below, we highlight a few specific developments.

In the US:

The number of moving pieces continues to present challenges to individual shareholders seeking to act in an impactful way:

• A change in SEC leadership amidst AGM season with different interpretations of engagement and shareholder proposals.
• Ongoing challenges to collaborative initiatives, including a lawsuit brought by a number of US states claiming anti-trust violations by investment managers.
• The emergence of lawsuits against the filers of proposals by companies.
• Changes in guidance from proxy advisers on topics such as diversity.

While activities in the US can dominate our attention, shareholder rights in other markets have been impacted too, by:

• virtual and hybrid AGMs;
• the impacts of dual class share structures;
• challenges to the very definition of stewardship that shapes responsible investment activities.

Voting encourages effective corporate governance

Despite these headwinds, voting is still an important stewardship tool because it:

• lends strength to corresponding engagement activity, acting as a normal means of communicating expectations rather than purely as a form of escalation;
• helps to hold corporate boards accountable;
• acts as an information signal, especially if accompanied by disclosure of voting rationale linked to an investor’s voting principles;
• provides proof of alignment between an asset owner’s objectives and the investment manager’s implementation (e.g. we observe that asset owners’ analysis and assessment of their investment managers is becoming more granular, with more attention in particular being paid to external managers’ proxy voting records, alongside other stewardship factors. The proportion of asset owners evaluating the proxy voting approaches of external investment managers has increased from 74% in 2023 to 81% in 2024).⁴

When evaluating how to employ voting, a responsible investor could consider the following questions:

• Is it necessary to update (or establish) public voting principles that make it clear how they will exercise their right to vote?
• Do their voting principles reflect material sustainability issues and maximising overall portfolio value as well as client and beneficiary interests?
• Are they engaging with relevant companies for a vote, and is the voting and engagement approach aligned, where possible, for consistency?
• If someone votes on their behalf, how are they being monitored for continued engagement and alignment?
• Are there other voting avenues when shareholder resolutions aren’t possible, e.g. management proposals, director votes, disclosing (pre and/or post) voting rationales, or even AGM statements/questions?

Voting continues to be a key stewardship tool for responsible investors; but it’s not the only tool in an investor’s broader stewardship toolkit.

Filing shareholder resolutions is a stewardship tool

Where it is possible to do so, filing carefully considered shareholder resolutions provides investors with a mechanism to raise key concerns publicly to an investee company’s board and other shareholders. Resolutions act as an important tool for information exchange and can strengthen an investor’s engagement efforts.

Specifically, investors can:

• focus efforts on a single, concrete ask to the investee company, drawing a clear connection between the ask and the company’s business;
• understand the likely support from other shareholders for the ask, and consider whether market education is needed, especially for novel proposals;
• express those views clearly and concisely, with a strong evidentiary basis, in a way that resists mischaracterisation by companies, other shareholders or commentators, and provides clarity to clients and beneficiaries.

You can find out more about current trends in shareholder resolutions in our article; Trends and challenges in sustainability-related shareholder resolutions, as well as more information on the PRI’s resolution database in our recent proxy season webinar.

We will continue to highlight the importance of stewardship with corporate leaders, regulators, and policy makers, regardless of barriers, new or old. Supporting shareholder rights has been a core priority since our inception in 2006 and we will continue to do so on behalf of our signatories. We continue to monitor developments closely and support signatories with guidance and other tools where we can.

What can responsible investors do?

1. Stay up to date with legal and regulatory changes, for example by signing up to our monthly policy newsletter, to inform how you exercise your shareholder rights and implement your broader stewardship strategy.

2. Be nimble with the stewardship tools at your disposal. When voting, consider the points raised above; explore its compatibility and consistency with your use of other stewardship tools such as engagement with investment managers and investees. Investors can use the PRI Resolution Database to monitor and engage with sustainability-related shareholder resolutions and votes.

3. If you’ve filed a resolution this proxy season, consider your post-filing plans, such as a communication strategy (that could involve both public and private avenues) to help maintain its momentum.

4. Get in touch with your contact at the PRI – we are here as a resource for signatories, large and small, around the world. We want to better understand your challenges and successes in this environment to help promote best practice responsible investment. Reach out to [email protected] if you’re not sure who to contact.

 

The PRI blog aims to contribute to the debate around topical responsible investment issues. It should not be construed as advice, nor relied upon. The blog is written by PRI staff members and occasionally guest contributors. Blog authors write in their individual capacity – posts do not necessarily represent a PRI view. The inclusion of examples or case studies does not constitute an endorsement by PRI Association or PRI signatories.