Executive Summary
- What's new: Glass Lewis announced it will stop offering its standard benchmark proxy voting guidelines in 2027, transitioning clients to differentiated, client-specific voting frameworks reflecting individual investment philosophies and stewardship priorities.
- Why it matters: As the proxy voting landscape becomes increasingly fragmented, companies may face greater uncertainty around voting outcomes in key shareholder votes, including contested board elections.
- What to do next: Public companies should consider (i) monitoring proxy advisor developments, (ii) mapping shareholder voting approaches and proactively engaging, (iii) preparing their boards and (iv) reassessing activism vulnerability with counsel.
__________
Overview
Major proxy advisory firm Glass Lewis announced that it will stop offering its standard benchmark proxy voting guidelines in 2027, and transition clients to differentiated client frameworks.
Glass Lewis’ change comes amid a broader reshaping of the proxy voting ecosystem — alongside regulatory shifts, stewardship restructuring by major index funds and the rise of pass-through voting — reflecting a continued move toward more investor-specific and diversified approaches to proxy voting. As the proxy voting landscape becomes increasingly fragmented, companies may face greater uncertainty around voting outcomes in key shareholder votes, including contested board elections.
Glass Lewis Change and Its Rationale
Starting in 2027, Glass Lewis will no longer publish a single set of “benchmark” voting recommendations. Instead, it will create voting frameworks that reflect individual client investment philosophies and stewardship priorities. Glass Lewis will also move away from providing research and recommendations based on its benchmark policy, in favor of offering multiple perspectives that would capture the varied viewpoints of its clients. According to the firm, most of its clients already use custom or thematic voting policies, and the goal is to enable all clients to vote according to tailored policies by 2027.
Broader Context: Evolving Stewardship and Regulatory Landscape
Glass Lewis’ policy follows several broader trends in shareholder voting and stewardship:
New SEC guidance on 13D/G “passive” investors. Earlier in 2025, the SEC staff issued interpretive guidance narrowing the scope of activities investors may undertake while preserving “passive” status under Securities Exchange Act of 1934 Sections 13(d) and 13(g). Under this new guidance, passive investors can continue to share their views and voting policies with management and how those may inform their voting decisions, but if investors condition their support for a director nominee or proposal on the company implementing their views, they risk having to file a long-form Schedule 13D in place of the abbreviated Schedule 13G. As a result, many passive investors have become more cautious when engaging with companies and in publicizing their voting policies.
“Big three” asset managers splitting voting teams. The largest index fund managers are revisiting how they approach proxy voting. BlackRock, Vanguard and State Street are now dividing their proxy voting functions into distinct teams, each with separate decision-makers, policies and approaches. BlackRock’s stewardship team has split into BlackRock Investment Stewardship and BlackRock Active Investment Stewardship. State Street’s team has split into Asset Stewardship Team and Sustainability Stewardship Service. Vanguard is expected to initiate a split in 2026. As a result, a single manager may vote differently on the same issue across funds. Glass Lewis’ upcoming shift mirrors these broader market trends, aligning the firm’s approach with how major institutional investors have diversified their voting practices.
Pass-through voting programs. Recently, some passive fund managers have introduced “voting choice” or pass-through voting programs, allowing investors to select from various voting policies (including from third-party advisors such as Institutional Shareholder Services (ISS) or Glass Lewis) or indicate preferences for how their votes should be cast. These programs are in pilot stages and can further fragment the voting blocs among institutional investors.
Pressure on proxy advisors and ongoing litigation. State-level initiatives and other political pressures have put proxy advisory firms under the microscope. In June 2025, Texas enacted SB 2337, requiring proxy advisors to disclose when recommendations rely on “nonfinancial” factors such as environmental, social and governance (ESG) or diversity, equity and inclusion (DEI) considerations. ISS and Glass Lewis sued the Texas attorney general and other state officials responsible for enforcing the law, and in August 2025, a federal judge issued preliminary injunctions blocking enforcement, with trial set for February 2026. The elimination of Glass Lewis’ central benchmark policy can be viewed partly as a response to this pressure, with the firm aiming to transition to a neutral platform for providing proxy advice that is tailored to client input and thereby less vulnerable to political scrutiny.
These developments all point to a clear trend: greater variability in voting behavior among institutional investors. Where proxy advisors once issued recommendations influencing broad investor blocs, voting policies are now becoming more varied and discretionary.Proxy fights add an additional layer of uncertainty. In contested elections, both ISS and Glass Lewis currently issue situation-specific reports with voting recommendations based on the facts and dynamics of each campaign. How Glass Lewis will handle these reports once its benchmark policy is eliminated remains unclear — whether the firm would issue multiple versions aligned with different client frameworks, or continue producing a single campaign-specific analysis. Either scenario could significantly affect how investors interpret and act on proxy advisor guidance in activism situations.
Implications and Practical Considerations for Public Companies
For companies, these changes carry important practical implications. The assumption that securing one proxy advisor’s support would help ensure a predictable outcome of a shareholder vote is becoming more uncertain. Voting outcomes will depend on multiple and sometimes overlapping investor policies and internal stewardship divisions.
To navigate this environment effectively, public companies should consider:
- Monitoring proxy advisor developments. Track how Glass Lewis implements its new structure and whether ISS or others follow suit, including the potential for multiple report formats or AI-enabled recommendations.
- Mapping shareholder voting approaches. Identify how key investors that historically followed Glass Lewis plan to select among its new customized frameworks, and monitor whether other investors that have traditionally relied on ISS are considering migrating to Glass Lewis as it offers more tailored options.
- Engaging early and strategically. Build relationships during calm periods to understand investors’ evolving decision frameworks and avoid surprises ahead of critical votes.
- Customizing messaging. Tailor communications to investors’ differing priorities — financial, sustainability or governance-driven — rather than rely on a single narrative.
- Planning for uncertainty and educating the board. Help directors understand how evolving proxy advisor policies and investor voting trends may affect future outcomes. Set expectations that historical support levels may less accurately predict voting results, and prepare contingency strategies for contested or close votes so the board is informed and ready to respond effectively.
- Reassessing activism vulnerability with counsel. In light of the company’s specific shareholder base and evolving investor voting patterns, work with legal and financial advisors to evaluate how these changes may affect the company’s exposure to activist campaigns and potential defensive readiness.
Bottom line: Glass Lewis’ move toward client-specific frameworks and the broader shifts in institutional voting mark an evolution toward more differentiated proxy-voting practices. Companies should plan ahead, reassess activism vulnerability with counsel and educate their boards on how evolving proxy advisor policies may reshape engagement and voting dynamics. Companies that stay proactive and adaptable will be best positioned to navigate an increasingly unpredictable proxy landscape.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.