Outsourcing Corporate Governance

With ever growing institutional shareholdings and recent regulatory reforms to enhance shareholder rights, proxy advisory firms, ISS and Glass Lewis in particular, have a large influence on shareholder votes. It is thus critical that these independent advisory firms issue unbiased recommendations and be free of potential conflicts of interest. My article, Outsourcing Corporate Governance: Conflicts of Interest within the Proxy Advisory Industry, publicly available on SSRN, provides the first study on whether and when conflicts of interest can arise from serving both shareholders and issuers.