Q&A with Ken Bertsch, Senior Advisor at Anteris

Ken Bertsch on the forces reshaping how proxy votes get decided

Ken Bertsch has spent more than three decades shaping and contributing to corporate governance: engaging as part of investment stewardship teams at TIAA-CREF and Morgan Stanley Investment Management, leading integration of corporate governance factors into credit ratings at Moody’s, and at the helm of leading both the Council of Institutional Investors and the Society for Corporate Governance.

In his role as Senior Advisor to Anteris, we enjoyed discussing the 2026 proxy season with Ken, including what has actually changed and what boards should be doing as they look toward 2027. We are pleased to share highlights from this discussion.

Q: “Fragmentation” has become the word of the season. We’d love to understand your perspective on what is shifting and the impact it is having?

Fragmentation is certainly the word du jour and it is real, but it’s structural rather than dramatic and affects the future more than the present. Nothing broke in 2026 as reflected by the headline outcomes being broadly consistent with recent years.

What has changed and will continue to change is (1) the predictability of those outcomes; and (2) the need to understand more actors, with less ability to rely on traditional guiderails. The old model gave companies more confidence that, if they understood the major institutions, their published policies, and the proxy advisors, they could build a reasonably clear map of the vote. That map has and will become harder to draw.

A few notable shifts I’d highlight:

Q: Activism is on the rise over the longer term (even if 2026 has been relatively quiet from a headline perspective). What does this fragmentation mean for companies in that context?

In an activist situation, the cost of not knowing who actually owns and influences the vote can be much higher. The rise in sophisticated activism makes shareholder mapping, issue identification and engagement increasingly part of preparedness, not just proxy-season execution.

AI is also raising the bar for preparedness. Activists and investors can analyze disclosures, ownership and voting patterns faster than ever, which means companies need to identify vulnerabilities and understand their shareholder base before a campaign forces the issue.

¹ U.S. Department of the Treasury, Report on Foreign Portfolio Holdings of U.S. Securities as of June 30, 2025 (released April 30, 2026). Foreign holdings of U.S. equities totaled $19,860 billion, or 18.3% of total U.S. equities outstanding.

Q: With the Executive Order, state attorney general investigations, the FTC inquiry, investors relying on AI-powered proxy voting tools, and Glass Lewis retiring its benchmark policy, the proxy advisory landscape is clearly changing. Does all of this mean the end of proxy advisor influence?

This is complicated. How ISS and Glass Lewis view corporate governance issues has heavily influenced their implementation of client custom policies, and ISS and Glass Lewis policies themselves historically reflect their clients, the institutional investors. But the proxy advisors forged versions of industry consensus in their benchmark policies. With the benchmark influence diminishing, I would expect votes to reflect more diversity of viewpoints and less the industry consensus.²

This does not mean ISS / Glass Lewis’ influence will go away, it’s more that their role is evolving. What is changing is the degree to which investors use proxy research as one input into a decision rather than as the decision itself. Therefore, it’s likely we’ll continue to see some erosion of the impact of their recommendations in 2027.

This makes engagement all the more important and we saw that play out this season as companies with strong engagement practices were able to achieve strong shareholder support for say-on-pay despite an ISS “against” recommendation.

The old rule of thumb was that an ISS “against” on say-on-pay would be associated with loss of support somewhere in the range of 20 to 30 points of support. In 2026, an adverse recommendation cost less than it used to; the average gap between an ISS “for” and an ISS “against” has narrowed over the past five years. Companies that had done the engagement work early and could point to clear rationale were more likely to absorb it, and that would have been a harder outcome in the past.

² Disclaimer: I have worked with Broadridge Financial Solutions, which is one of several firms that are not proxy advisors, and are seeking to give new tools to investor stewardship teams to vote genuinely custom policies. I see these new tools as tech-forward versions of the service that used to be offered by the Investor Responsibility Research Center, which never made any recommendations and did not have its own governance standards, but sought to help institutions implement their own policies, whatever those views might be.

Q: The SEC stepped back from substantive no-action review for most shareholder proposals in November 2025 and this month proposed to rescind Rule 14a-8 altogether. After a full proxy season, what actually changed?

Not what most people expected.

The bet was that companies would exclude more once the SEC was no longer refereeing. The opposite happened. Companies got more cautious, especially after proponents began suing over exclusions. By the SEC’s own count, about two-thirds of known proposals made it into the proxy.

The reason is simple. A staff letter used to take most of the risk out of an exclusion. Without one, a wrong call can turn into litigation, investor pressure, or questions about the board itself. Several large companies responded by explaining their reasoning in the proxy statement. I expect more of that in 2027.

The ballot got smaller and more selective. Fewer proposals overall, a larger share of them on governance, and support that still turned heavily on the specific issue.

Most of the real work moved into private conversations. Proposals were withdrawn before any public fight developed. Companies weighed the likely vote, the cost of excluding, and the litigation risk against simply putting the proposal to a vote.

Proponents also found ways around the SEC, and each carries new risk for companies: suing over exclusions, running “zero-slate” campaigns under Rule 14a-4, and running vote-no campaigns that recast an exclusion as a board oversight failure.

Q: What should companies expect as they plan for 2027?

More uncertainty, and it arrived sooner than the agenda suggested.

On September 16, the SEC proposed to rescind Rule 14a-8 outright. The stated reason is that the rule exceeds the SEC’s authority under Section 14(a) and intrudes on state law. The release adds policy reasons: the original justifications for the rule no longer hold up, and the existence of a federal rule has kept states from developing their own.

If it is adopted, whether a proposal has to go in the proxy becomes a question of state law and the company’s own charter and bylaws.

Comments are due 60 days after Federal Register publication, so nothing final is likely in time to change the 2027 season given the submission deadlines for spring meetings run this fall.

The debate will go on for a while. It is not a substitute for deciding each proposal under the rules in effect when it arrives.

The posture is the same as last season. Assume the exclusion decision is yours, assume it may be tested in court, and engage with proponents early enough to settle when settling makes sense. A proposal resolved in November will not become anyone’s litigation or governance test case.

We likely will see some proposals asking companies to provide shareholder proposal rights in bylaws. And in one form or another, companies will be under pressure again in 2027 to more or less follow the no-action precedents, even erring on the side of including some proposals that SEC staff in the past might well have seen as excludable.

One other observation: Some vocal pension funds are focusing more right now on company performance, targeting long-term underperformance. This “back to basics” approach may result in more votes against board members.

Q: Retail investors own roughly 30% of U.S. public company shares and vote a small fraction of them. Is that finally changing?

Not so far, but perhaps that will change. Retail voting participation actually has declined further (if marginally) in recent years. But the market is now experimenting with better ways to engage retail holders. This includes more thoughtful approaches to push out communications that generate stronger response rates, as well as efforts to make it easier for individual investors to vote.

In addition, ExxonMobil over the last year has pioneered its Retail Voting Program, involving standing vote instructions from retail holders. The SEC staff gave the green light to this new approach in September 2025, and ExxonMobil proceeded to gain standing voting instructions from holders of at least 10% of retail shares outstanding.³ One other company adopted such a program in spring 2026, and we can anticipate that some other companies will see if this approach can boost their retail participation going forward.

While mutual fund/ETF pass-through voting is a different development, the development of standing vote instruction programs and pass-through voting point in the same direction: the individual investor is becoming a more explicit participant in the voting architecture.

Retail holders have historically been more supportive of management than institutions on say-on-pay and director elections, so a company with a large retail base has an obvious interest in getting those shares voted.

For companies, the implication is not simply “get more retail votes.” It is to understand who your retail holders are, how they have voted historically, how much of the retail base is typically unvoted, and what new channels may make participation easier. More retail voting does not automatically mean more support for management. It means that a larger share of the register may actually express a view.

³ Disclaimer: Broadridge is an important service provider in enabling this program, and I consult for Broadridge and was on staff.

What does all of this actually mean for a board sitting down to plan its shareholder engagement calendar?

It means you cannot simply engage “the institution.” You need to understand who has the authority to make the decision and then engage that decision-maker on the issues that matter to them.

The first job is understanding your investors and how they vote: where does voting authority actually sit across your largest holders, by fund, strategy, stewardship team and pass-through program? That sounds basic, but many companies have not refreshed this map as their shareholder base and the voting architecture around it have changed.

The second job is timing. Even more than in the past, reactive outreach in-season is a losing strategy. You need to persuade more people over a longer runway, which means that now more than ever, the substantive conversations need to happen in the off-season. But when to engage during the off-season is also a consideration, taking into account company-specific factors such as potential management changes, anticipated compensation decisions, and the timing of board refreshment.

Companies need to understand where they are vulnerable to activists and their largest shareholders, and anticipate the issues and questions likely to arise in engagement. That means pressure-testing against investor expectations and preparing management and the board to address potential concerns before they become obstacles to support.

These shifts also change the traditional proxy season playbook, which was built around reacting to proxy advisory reports. A company could receive a negative recommendation, respond with a supplemental filing and try to move the vote. In a world of more customized policies and AI, the persuasion increasingly must happen earlier. By the traditional proxy advisor publication date (usually two weeks before the shareholder meeting), many investors will have already decided how to vote and moved on to other companies in their portfolio.

Anteris Advisors is a leading independent shareholder advisory firm partnering with public company management teams and boards to successfully navigate their most consequential votes and governance decisions. The firm supports companies on shareholder engagement and communications, activism preparedness and defense, corporate governance, executive compensation, and annual meeting preparedness.

Anteris Advisors has consistently ranked as a top Strategic and Financial Advisor in Global Activism Defense by Bloomberg, FactSet and LSEG. For more information, please visit www.anterisadvisors.com.

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