Ray Garcia is a Leader, Matt DiGuiseppe is a Managing Director, and Ariel Smilowitz is a Director at the PricewaterhouseCoopers (PwC) Governance Insights Center. This post is based on their PwC memorandum.
The flurry of activity coming out of the Trump Administration is ushering in a new paradigm for investment stewardship of environmental, social and governance (ESG) considerations. Over the course of a few weeks in February 2025, the SEC issued significant new guidance on topics ranging from shareholder proposals to investor engagement and communication. In some ways, this shift in approach raises questions about how business priorities and voting outcomes will be impacted during this year’s proxy season, while in other ways it may provide additional clarity.
As the market responds in real time, we anticipate that investors’ engagement and proxy voting strategies will evolve to address potential legal and regulatory risks. We foresee the return of “quiet diplomacy,” in which investors take less public credit for the impact of their stewardship activities and surreptitiously articulate their positions on governance issues related to specific companies. That said, investors will also seek to understand how boards are overseeing relevant business risks if company policies, practices or disclosures are modified. Here, we outline how these developments may unfold, along with steps boards and management teams can take to successfully navigate through proxy season.
