And Then a Miracle Happens!: How Do Proxy Advisory Firms Develop Their Voting Recommendations?

Proxy advisory firms are independent, for-profit consulting companies that provide voting recommendations to individual and institutional investors. Research shows that these firms have significant influence on voting outcomes. Given this influence, it is important that investors ensure that the policies of these firms are “accurate” — i.e., that they successfully and reliably differentiate between good and bad future outcomes.