The BRT argues that since 1997, the number of public companies has declined, implying this is a sign that the proxy system is harming market vibrancy. But the BRT fails to mention that the total value of public equity available to investors has soared. In inflation-adjusted dollars, U.S. public market capitalization has tripled—from about $20.5 trillion in 1997 to more than $62 trillion at the end of 2024. Investors now have access to stronger, better governed, and more diversified firms than ever before.
These CEOs’ real concern is that today’s shareholders are speaking out. They’re using the proxy process to challenge management on climate change, labor standards, political spending, and other matters that create systemic risks and threaten long-term returns across the market. That’s uncomfortable for executives whose compensation depends on short-term stock performance at individual companies, but it’s exactly what public markets are supposed to enable: accountability.
The BRT’s claim that shareholder proposals are too “politicized” is sleight of hand: many of these shareholder proposals address systemic issues—such as climate risk, inequality, and political influence—that affect the entire market, not just a single company. Calling systemic issues “political” doesn’t change the fact that they’re financially material to investors. Shareholders need to ensure that their capital is not being used in a manner that threatens the systems that support the entire economy. Irresponsible practices may boost short-term profits and the value of executives’ stock options, but they threaten the value of the typically diversified portfolios held by retirement savers and other long-term investors.
One example of the one-sided nature of the BRT’s argument is its proposal to require that proxy advisors notify their clients when a company responds to a voting recommendation. Notably, they do not advocate for the same requirement when a shareholder proponent responds. This selective transparency speaks volumes: it’s not about fairness or balance, it’s about giving companies an advantage in shaping the narrative and suppressing dissent. It’s also about driving up the cost of proxy advisory services without adding any value—companies have entire investor relations departments dedicated to informing investors of the management perspective.
Another misleading argument from the BRT is its concern over so-called “robovoting”—the idea that asset managers are blindly following proxy advisor recommendations. This criticism ignores the practical reality of modern investing: large asset managers often hold thousands of positions across global markets. It’s simply not feasible to conduct bespoke analysis for every single vote at every single company. That’s why they hire expert proxy advisors—just as any client hires a financial professional—to apply their disclosed voting principles consistently and efficiently.
“Robovoting” is a misnomer. What we’re really talking about is professional delegation. If an investor instructs their advisor to prioritize long-term risk or systemic health, that’s not abdicating responsibility—it’s executing fiduciary duty at scale.
As for the cost of shareholder proposals, the panic is misplaced. In a $60 trillion market for capital stock, the cost of shareholder voice is not even a rounding error. And how much do companies spend, with shareholder money, on glossy investor reports and anti-proposal consultants?
Let’s not confuse inconvenience with inefficiency. A proxy system that gives shareholders a real voice isn’t broken. It’s doing exactly what it should. And let’s not forget: the U.S. Securities and Exchange Commission’s mission is to protect investors, not to safeguard CEOs from the legitimate systemic concerns of their own shareholders. Any reforms to the proxy system must strengthen investor oversight, not dilute it in the name of managerial comfort.
