UAO Fiduciary · The Stewardship Ledger
The proxy advisors are stepping back from one-size-fits-all guidance. The vote, and the responsibility, return to the owner.
For years, the proxy-voting season ran on a quiet outsourcing. Two firms — ISS and Glass Lewis — supplied benchmark recommendations, and a large share of the market voted with them. That arrangement is now unwinding. From February 2026, ISS is moving away from blanket ESG voting policies, including default support for many climate and diversity disclosure proposals. From 2027, Glass Lewis will stop publishing a single benchmark policy altogether, offering clients tailored policies instead.
The stated reason is divergence: investors no longer agree on what good stewardship looks like, so a single recommendation satisfies no one. The effect is to hand each owner back a responsibility it had partly delegated.
More power, less cover
This is often read as a retreat from stewardship. It is closer to the opposite. When the benchmark vanishes, every vote a large owner casts carries more weight and less cover. You can no longer point to the advisor's recommendation as a default; you have to decide, and defend the decision, on your own analysis.
When the benchmark vanishes, every vote carries more weight and less cover. The owner has to decide — and defend it.
For a universal owner with a coherent view of systemic risk, that is an opportunity. The funds that have done the work — that can articulate why a given resolution protects long-term portfolio value — gain influence precisely as the crowd loses its script. The funds that outsourced their thinking are the ones now exposed.
Building a voting spine
The practical task is to convert principles into a voting framework specific enough to apply under pressure. What is the fund's position on say-on-climate, on board accountability for systemic exposures, on the trade-off between management discretion and beneficiary protection? Those questions used to be answered by a third party. Now they have to be answered in house, written down, and applied consistently across thousands of meetings.
Proxy Season Live, the recurring feature here, will track how the largest owners vote once the benchmark is gone — where they converge, where they split, and which of them turn the end of outsourced guidance into a sharper, more accountable form of ownership.
The counter-case · the strongest opposing view
Some see the proxy-advisor retreat as healthy. A single benchmark policy gave two firms outsized sway over thousands of votes, and returning judgment to owners is arguably more accountable, not less. Others worry it does the opposite — that without a default, smaller owners will defer to management or vote inconsistently, weakening the stewardship the change is meant to strengthen. There is also a competition critique: bespoke per-client policies may entrench the advisors' role rather than reduce it. Whether fragmentation empowers owners or just adds noise is unresolved.
UAO Fiduciary sets out the argument and the strongest counter-argument so allocators can weigh the evidence themselves. We report the debate; we do not pick a side.
The Stewardship Ledger — Proxy voting, engagement, escalation and the upheaval at the proxy advisors — the mechanics and outcomes of ownership. · Weekly. Part of UAO Fiduciary.
Researched and edited by the UAO editorial desk.