A major shift in how shareholder votes are handled is taking shape at one of the world’s largest financial institutions.
JPMorgan Chase’s asset management arm has decided to discontinue the use of proxy advisory firms in the United States, according to an internal memo cited by a news report on Wednesday. The bank described the move as an industry first.
Proxy advisers play a key role in corporate governance by reviewing shareholder proposals and board-level decisions. They provide voting recommendations to institutional investors ahead of annual general meetings. However, these firms have faced criticism for years from conservatives and some business leaders, who argue that they often recommend votes against management and place excessive focus on climate and social issues.
In the memo, JPMorgan said it no longer requires third-party data collection or external voting recommendations in the US. Instead, it will rely on a newly developed in-house, AI-powered tool called Proxy IQ. The system aggregates and analyses proprietary data from more than 3,000 annual company meetings, allowing the bank to manage voting decisions internally.
Responding to the development, a spokesperson for Institutional Shareholder Services said in an emailed statement, “We are proud of our four-decade record serving the global institutional investor community with independent and high-quality governance research, recommendations, and voting solutions, and will continue to do so.”
Another major proxy advisory firm, Glass Lewis, did not immediately respond to a request for comment. The development was first reported earlier in the day by a financial newspaper.
The move comes at a time when proxy advisers are under increasing scrutiny in the US. Donald Trump and several senior corporate executives have repeatedly criticised the influence of proxy advisers on shareholder voting. In December, Trump signed an executive order to tighten oversight of the proxy advisory industry, arguing that leading firms often “advance and prioritize radical politically-motivated agendas.”
JPMorgan CEO Jamie Dimon and Elon Musk have both been vocal critics of the proxy advisory sector, questioning its impact on corporate decision-making.
At the same time, corporate governance experts and legal professionals have warned that increased regulation could weaken shareholder rights. Both ISS and Glass Lewis have consistently denied accusations of bias or misconduct.
JPMorgan’s decision signals a growing push by large asset managers to take greater control over governance decisions, while also intensifying debate over the future role of proxy advisers in the US market.
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