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. 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. 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.
SAFE Working Paper No. 494
