Subsequent to President Donald Trump’s executive orders to roll back diversity, equity, and inclusion (DEI) considerations, top proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis have both undertaken swift responses to this new regulatory change.
ISS: In a February press release, ISS indicated that for shareholder meeting reports published on or after February 25, it will no longer consider the gender and racial and/or ethnic diversity of a company’s board when making vote recommendations with respect to directors at U.S. companies under its Benchmark and Specialty voting policies.
Glass Lewis: In early March, Glass Lewis conveyed its decision to implement a bifurcated approach to issuing voting recommendations on board elections and DEI-related shareholder proposals at U.S. companies. Beginning March 10, Glass Lewis will apply its U.S. Benchmark and thematic policy guidelines as initially published for the 2025 proxy season. However, all proxy papers for U.S. companies with a director AGAINST vote recommendation due to diversity will carry a “For Your Attention” (FYA) flag pointing clients to a supporting rationale they can leverage if they prefer to vote differently.
At this stage, proxy advisors have not indicated changes to their proxy voting guidelines pertaining to the Canadian market. Nevertheless, leading institutional investors Vanguard and BlackRock have already relaxed their proxy voting guidelines with respect to diversity for both U.S. and Canadian markets. For example, Vanguard’s 2025 Proxy voting policy for Canadian portfolio companies removed its prior language: “a board should also, at a minimum, represent diversity of personal characteristics, inclusive of at least diversity in gender, race, and ethnicity on the board.” Furthermore, the fund also removed its supporting language for “requests for disclosure of the company’s approach to board composition, inclusive of board diversity,” “the company’s adoption of targets or goals related to board diversity,” as well as DEI-related shareholder proposals. BlackRock’s 2025 Proxy voting guidelines for Benchmark Policies – U.S. securities no longer require diversity targets on boards nor disclosure on approach to board diversity. In its revised policy, BlackRock may consider voting on a case-by-case basis against the nominating/governance committee members if “an S&P 500 company board is an outlier and does not have a mix of professional and personal characteristics that is comparable to market norms.” Similarly, BlackRock’s 2025 Proxy voting guidelines for Benchmark Policies – Canadian securities adopt the same approach to the S&P/TSX Composite company boards. Looking forward, we expect proxy advisors will engage in further consultations with the Canadian institutional investors after the 2025 proxy season to determine if any changes to their Canadian proxy voting guidelines regarding diversity are warranted.
About The Author
Anqi Xu, Consultant
Prior to joining Southlea Group, she worked as Associate Vice President at a global proxy advisory firm, producing independent and objective shareholder meeting research reports with voting recommendations for institutional investors. She is also the Canadian research team’s E&S lead with in-depth expertise in the E&S shareholder proposal focus area,
Anqi also worked as Vice President at a Canadian strategic advisory firm, advising boards and committees on complex corporate governance matters. She provided strategic advice to public issuers on executive compensation and played an instrumental role in multiple successful Say on Pay turnarounds,
Anqi has experience supporting and evaluating executive compensation structures and disclosures of public-traded companies, the S&P/TSX Composite Index issuers in particular, across various sectors.
Anqi has a Bachelor of Arts in Economics and Art History from the University of California, Los Angeles (UCLA) and a Master of Financial Accountability degree from York University. She also holds a Chartered Financial Analyst (CFA) designation.