The 2025 proxy season reflected an inflection point in shareholder engagement — one shaped by shifting regulatory guidance, recalibrated investor priorities, and the continuing evolution of governance practices. I was honored to moderate a panel on the lessons from the 2025 proxy season at Barnes & Thornburg's Second Annual Public Company Shareholder Engagement Summit. The panel featured independent board member Sheila Bangalore; Jason Gray, chief legal officer at Mitek Systems; and Alfred Lumsdaine, chief financial officer at Ardent Health Partners. Our discussion yielded the following takeaways.
A Different Landscape for Shareholder Proposals
The Securities and Exchange Commission's (SEC) February 2025 bulletin effectively reinstated pre-2021 guidance, lowering the threshold for companies to exclude shareholder proposals. The practical impact was unmistakable:
- Roughly 400 proposals reached a vote at S&P 1500 companies, a 24% decline from 2024.
- 20% of proposals were omitted, double the prior year's rate.
- Overall submissions dropped by about 20%.
The decline was especially pronounced in ESG-related submissions, many of which failed to gain traction at the ballot. Governance-related proposals — such as annual director elections and the elimination of supermajority provisions — bucked the trend, receiving higher average support.
This recalibration illustrates a subtle but important shift. Shareholders are focusing less on broad social policy mandates and more on proposals tied directly to governance mechanics and board accountability.
Institutional Investors Reassess Their Approach
Another notable factor was the recalibration among the largest institutional investors. Several bellwethers in ESG engagement have signaled a more measured approach, pausing or scaling back support for prescriptive proposals. This moderation has downstream effects on issuers' engagement strategies, particularly as these investors continue to evaluate how engagement activity aligns with their filing obligations under Schedules 13D and 13G.
Engagement Requires Earlier and More Frequent Conversations
Our panelists underscored a lesson familiar to anyone who has weathered a contentious proxy season: do not wait until the annual meeting to secure support. Companies that engaged shareholders early and consistently fared better in building understanding, particularly around compensation issues and governance structures.
Looking Ahead
Taken together, the lessons of 2025 suggest a more pragmatic environment — one where boards must balance shareholder expectations with evolving regulatory standards. Governance proposals will likely remain a focal point, while ESG proposals may migrate outside SEC filings into sustainability reports and other voluntary disclosures.
For directors and executives, the mandate is clear: prepare early, engage meaningfully, and communicate transparently about the board's composition, priorities, and rationale. Proxy season is no longer a spring ritual; it is a year-round discipline.
You can watch the full panel discussion below.
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