The legal gray zone of proxy voting policies

Dvir Aviam Ezra

No 494, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: Proxy voting policies are documents used by fiduciaries to outline how institutional shareholders use their voting power in corporate votes within their portfolio companies. These policies govern tens of trillions of dollars of assets under management (AUM) in the U.S. alone. 2 However, they occupy an unstable legal position. They are treated primarily as disclosure documents but operate as private regulatory instruments. This article develops the first doctrinal taxonomy of proxy voting policies, evaluating their functions as disclosure instruments, internal guidelines, contractual undertakings, and as private regulation. This analysis is supplemented by an empirical review of disclosures of proxy voting policies showing substantial heterogeneity in disclosure quality, presence of boilerplate language, reliance on proxy advisers, and uneven substantive guidance.3 This article argues that current law under-regulates PVPs because it focuses on discretionary disclosure while ignoring their norm-setting powers. It proposes a tiered regulatory model based on proportionality and democratic legitimacy to enhance disclosure, compliance and accountability.

Keywords: Disclosure Regulations; Proxy Voting; Corporate Governance; Financial Regulation; Behavioural Finance; Information Processing; Stewardship; Fiduciary Duties (search for similar items in EconPapers)
JEL-codes: D82 G23 G34 G38 G40 K22 K23 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:343536

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