JPMorgan Chase’s JPM-N asset-management unit is cutting all ties with proxy advisory firms effective immediately, the Wall Street Journal reported on Wednesday, citing an internal memo.
This coming proxy season, which usually starts from March and continues through June ahead of annual shareholder meetings held by corporates, the bank will start using an internal artificial-intelligence-powered platform, it is calling Proxy IQ, to assist with U.S. company votes, the report said.
Proxy advisory firms such as Glass Lewis and ISS review shareholder proposals and corporate governance concerns and issue voting recommendations to institutional investors ahead of annual shareholder meetings.
Their advice can sway outcomes on board elections, executive pay decisions and environmental or social resolutions.
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Both firms have long faced criticism, often from corporate executives, over the influence of their recommendations, but their guidance is widely sought by institutional investors.
A spokesperson for the bank, Glass Lewis and ISS did not immediately respond to Reuters’ requests for comment. Reuters could not independently verify the report.
Conservatives and some business leaders have for years raised a range of complaints about proxy advisers and large fund managers, arguing that they often recommend votes against boardroom decisions or directors and place too much emphasis on climate and social issues. In December, U.S. President Donald Trump signed an executive order aimed at increasing oversight of the proxy advisory industry, on the grounds that top firms often “advance and prioritize radical politically-motivated agendas.”
Glass Lewis and ISS have repeatedly denied any wrongdoing on the allegations.