Don't be afraid of the critic: How proxy advisors help Indian shareholders make better decisions
As long as the management's judgments are legitimate and the governance guidelines are followed, PAs have no need to question their judgment. They attempt to remain objective in a world that is focused on results.
Proxy advisers come to light when resolutions are rejected based on their advice, as was the situation with Nestle's royalty payout, or when opinions differ, as was the case with the demerger of the ITC Hotels. When proxy advisors (PAs) are not split and investors have supported the proposal, it is uncommon, nevertheless, and some are still opposing it, as with the Tata Motors DVR proposal and the delisting of ICICI Securities.
It seemed like PAs were all powerful when a recent report about JP Morgan Chase CEO Jamie Dimon raised worries about the "undue influence of proxy advisors." That might be the case in other nations, but it doesn't appear to be the case in India.
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