FRC publishes research on impact of proxy advisers and ESG ratings agencies on companies and investors

News types: Generic Announcement

Published: 15 June 2023

The FRC has today published detailed research into the impact of proxy voting advisors and ESG ratings agencies on actions and reporting by FTSE350 companies and investor voting decisions.

Annex 1- Online Survey Questions 
Annex 2 - Interview Guides and List of Interviewees 

The research, conducted by Durham University and Morrow Sodali, was commissioned in early 2023 to help progress the conversation on this complex and challenging topic.

The FRC was pleased to see the number of its stakeholders who agreed to participate in this research which it believes will be a valuable tool for the various consultations underway about the impact of proxy voting agencies’ activities on corporates, particularly on key issues such as remuneration policies.

Mark Babington, Executive Director of Regulatory Standards at FRC, said:

“There’s an ongoing debate on the role of proxy advisors and increasingly ESG ratings agencies and it’s clear from the research we’re publishing that the topic is a more complex and nuanced one that some have led us to believe.
 
“Proxy advisors, voting agencies, and ESG ratings agencies are an important resource for fund managers; however, there are always ways to improve engagement, stewardship, and shareholder communications for a better, more efficient, and competitive market.
 
“This is a timely piece of research which provides some interesting insights from our stakeholder universe on this important topic. We’re grateful to our many stakeholders for their contributions.”

The research will also be shared with the FCA and CMIT to aid their ongoing consultations on how proxy voting agencies interact with corporates and investors as part of corporate governance programmes.

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