2026 proxy season preview: PwC

The 2026 proxy season is shaping up to be one of the most structurally different in recent years. While headline governance topics such as board composition, executive pay, and shareholder proposals may feel familiar, the mechanisms that drive voting outcomes are shifting.

The role of proxy advisors is evolving as some major institutional investors build or expand in-house technology-enabled voting and analytical capabilities. Investor bases are also fragmenting, with some large managers splitting stewardship responsibilities across different strategies. At the same time, companies are investing more in retail shareholder engagement. In parallel, SEC staff recently revisited several aspects of the proxy system, including the shareholder proposal process and the use of certain public filings related to ‘exempt solicitations’ (shareholder messages shared outside the company’s proxy statement). Together, these developments are influencing how perspectives are formed, how votes are cast, and how outcomes are determined.

For boards, the implications are significant. Voting decisions may be less predictable and less anchored to third-party benchmarks. Engagement strategies that once focused primarily on proxy advisor policies and a handful of large shareholders may no longer be sufficient. Regulatory changes are placing more discretion and more responsibility on companies navigating shareholder proposals and proxy-related communications. In this environment, success during proxy season will depend less on reacting to established playbooks and more on anticipating shifts in the governance landscape.

The changing role of proxy advisors

Proxy advisors have long played a central role in shaping proxy season outcomes, providing benchmark policies and voting recommendations that many investors have incorporated into their voting process. That influence is now being recalibrated. Several large asset managers have announced changes that reduce reliance on proxy advisory firm recommendations. Some investors are also deploying in-house platforms and analytics to support voting decisions, supplementing or replacing the custom voting policy support offered by proxy advisors.

Proxy advisors are also facing renewed policy and regulatory attention. In December 2025, an Executive Order directed the SEC, Federal Trade Commission (FTC), and Department of Labor (DOL) to review aspects of the proxy advisory ecosystem. To date, the FTC has opened an antitrust investigation into the two largest proxy advisors. The near-term implications are still unfolding, and the long-term regulatory trajectory remains uncertain.

Why it matters for boards

The board should not assume that alignment with proxy advisor benchmarks alone will meaningfully de-risk outcomes across its shareholder base. While adverse recommendations still matter, particularly on say-on-pay and director elections, many investors are applying customized frameworks informed by proprietary data, engagement history, long-term strategy, and internal policy nuances.

This shift creates greater unpredictability, but also greater opportunity. Direct engagement and clear, company-specific disclosure will carry more weight in this context.

How companies can adapt

Deepen insight into top shareholders’ voting frameworks. Boards and management teams should understand how the company’s largest investors are structuring their stewardship functions, including the use of AI-enabled tools or proprietary analyses, and how they apply company-specific judgment in voting decisions. Together, they should periodically review where key investors’ approaches diverge from proxy advisor benchmarks and how qualitative factors, such as engagement history or strategic execution, may influence voting outcomes.
Stress test key ballot items. Boards and management teams should evaluate potential voting outcomes under different scenarios, including varying levels of support from top shareholders, retail participation, and proxy advisor recommendations. Particular attention should be paid to items that have historically received marginal support (e.g. say-on-pay, director elections, or governance amendments) and areas where targeted engagement could meaningfully affect results.
Align disclosure and engagement messaging. Boards and management teams should confirm that proxy disclosures and engagement messaging clearly articulate strategic rationale, long-term value creation, and oversight effectiveness. In partnership, they should equip directors and senior leaders to explain governance and compensation decisions in language that resonates with long-term investors, rather than relying solely on alignment with external benchmarks or proxy advisor guidelines.

The continued fragmentation of the investor base

Differences within a company’s shareholder composition are becoming more pronounced. Large asset managers are increasingly segmenting stewardship and proxy voting functions, sometimes separating policy development, engagement, and vote execution across different teams or strategies. In some cases, index, active, and sustainability-focused funds within the same institution may apply distinct voting lenses. This internal differentiation is occurring alongside the growth of pass-through or client-directed voting programs, which give eligible fund investors and asset owners the ability to select voting policies that determine how their proportionate shares are voted.

At the same time, companies are placing a renewed focus on retail shareholder engagement. Advances in proxy technology platforms, digital outreach, and direct-to-investor communication are making it easier to reach individual investors. While retail turnout remains variable, in closely contested votes or high-profile governance situations, retail participation can influence outcomes, particularly as institutional voting becomes less monolithic.

Why it matters for boards

For the board, understanding the company’s top ten shareholders is no longer sufficient to predict proxy season outcomes. Voting decisions may vary within a single institution, and stewardship priorities may differ across asset classes and investment strategies. This makes the shareholder base more nuanced than in prior years when a relatively small group of centralized decision-makers drove results.

Fragmentation also heightens the importance of sustained, tailored engagement. Investors increasingly expect discussions to address company-specific strategy, risk oversight, and performance. Boards that rely solely on reactive outreach during proxy season may find themselves at a disadvantage.

How companies can adapt

Develop greater visibility into ownership and engagement dynamics. Boards and management teams should have a clear understanding of where voting authority resides within the shareholder base, including differences across funds, strategies, and stewardship teams within the same institution. Together, they should periodically review how various investor segments (index, active, sustainability-focused, or pass-through programs) approach governance decisions and assess whether engagement priorities reflect this increasingly diverse ownership structure.
Enhance oversight of retail communication strategy. While management typically leads outreach, the board should maintain visibility into how proxy materials, investor websites, and digital communications are accessible and compelling for individual investors. Together, they should consider how key governance and compensation messages are translated into plain language, whether supplemental materials (such as FAQs or short-form summaries) could improve clarity, and how retail participation trends might influence outcomes in closely contested votes.
Coordinate board participation in engagement thoughtfully. In this more decentralized voting landscape, boards and management teams should be deliberate about when and how directors participate in shareholder engagement. In PwC’s latest Annual Corporate Directors Survey, 57% of directors reported that a board member other than the CEO had direct engagement with investors in the past year. Director involvement is particularly valuable where credibility and judgment are most critical. Boards and management teams should clarify roles in advance so that directors and executives present a consistent narrative and are prepared to address investor questions that reflect differentiated voting policies or strategy-specific priorities.

The SEC’s evolving approach to the proxy system

SEC staff have reconsidered several aspects of the proxy system, reshaping the mechanics of how investors communicate with companies and each other. Most notably, for the 2026 proxy season, the staff have announced that it generally will not provide substantive responses to most ‘no-action’ requests, except when the request involves a conflict with state law. Historically, a company could ask SEC staff to confirm that it would not pursue regulatory action if the company excluded a shareholder proposal from the proxy statement. As a result of the change, companies and their counsel may have less advance insight into staff’s interpretation of emerging policy issues, requiring greater independent judgment when navigating novel and contested proposals.

At the same time, the SEC updated its guidance on exempt solicitations, which are certain types of shareholder communications made outside the company’s proxy statement. These voluntary filings have become a common way for smaller shareholders and advocacy groups to publicize their views on pending votes. The staff has said it intends to object to voluntary submissions when the rules do not require a filing, which is generally the case unless the shareholder owns more than $5 million of the company’s stock.

Together, these developments place greater responsibility on boards and management to exercise sound judgment, anticipate investor scrutiny, and navigate proxy decisions without the same level of regulatory signaling as in prior years.

Why it matters for boards

Thus far, SEC staff has not granted or denied any of the 137 no-action requests submitted and has issued a ‘no view’ stance on 69 of those requests. Shareholder proposal activity has also declined compared with the prior year.¹ For boards, the reduced availability of substantive SEC relief means less regulatory backstop in close judgment calls. Decisions about whether to exclude a proposal—and how to justify that decision—may face heightened attention from investors, even if SEC staff does not weigh in directly. The shift has also begun to play out in the courts, with some investors turning to litigation to challenge companies’ exclusion decisions.

More broadly, the changes to shareholder communications also alter the flow of information during proxy season. While some shareholder campaigns may receive less formal visibility, proponents are likely to continue engaging investors through direct outreach, media, and other channels. Boards should anticipate that public debate on key governance issues may develop outside traditional regulatory filings.

How companies can adapt

Revisit shareholder proposal oversight frameworks. Boards and management teams should have clear visibility into, and confidence in, the company’s approach to evaluating and potentially excluding shareholder proposals. Against a backdrop of less predictable regulatory guidance, leaders should aim to understand not only the legal rationale for exclusion but also potential investor reactions and reputational implications.
Strengthen disclosure and narrative discipline on contested matters. Boards and management teams should anticipate when proposal exclusions, governance structures, or compensation decisions may draw scrutiny and proactively align on the company’s rationale. They should be comfortable that proxy disclosure clearly reflects the board’s deliberative process, oversight role, and responsiveness to shareholder input, particularly in situations when regulatory guidance is limited.
Monitor shifts in shareholder communication channels. Boards and management teams should recognize that limits on certain filings may push proponents toward alternative avenues, including coordinated investor outreach, media engagement, or digital campaigns. Together, they should confirm that the company has processes in place to track emerging campaigns and assess whether additional engagement or clarifying disclosure is warranted.

^{1 Data from Proxy Analytics as of February 28, 2026.}

Looking ahead

For boards, the 2026 proxy season will be defined not by a single headline issue but by the need to operate effectively within a more complex and decentralized governance system. As investor influence diffuses and regulatory guardrails shift, voting outcomes may reflect a wider range of perspectives and a greater premium on company-specific context.

This environment places higher expectations on board judgment. Directors will need to be conversant not only in governance fundamentals, but in how the company’s strategy, risk oversight, and compensation philosophy resonates across a diversified shareholder base. Close votes will increasingly be decided at the margins through engagement quality, clarity of disclosure, and the credibility of the board’s oversight narrative.

Ultimately, boards that are best positioned for 2026 will treat proxy season not as a compliance exercise but as an extension of long-term governance stewardship supported by ongoing board evaluation and effectiveness efforts. By strengthening oversight of shareholder engagement and maintaining disciplined, transparent communication, directors can help build durable investor confidence, even as the proxy landscape continues to evolve.