5 Key Takeaways from the 2025 Proxy Season
In the first half of 2025, rapid market shifts, new regulations, including updated SEC guidance on Schedules 13D/13G – and changing activist tactics pushed boards, investors and advisors to rethink how they operate. It’s been the most disruptive proxy season in years – and the impact is far from over.
Based on insights from Diligent Market Intelligence’s Proxy Season Review 2025, here are five things you need to know.
1. Engagement is no longer business as usual
Faced with new regulations and heightened scrutiny, many institutional investors have pulled back on active outreach and are reassessing how they engage with companies with new SEC guidance narrowing the definition of “passive” investors. The White House’s executive order on diversity, equity & inclusion has also upended many stewardship teams’ voting policies.
That silence is creating new challenges for issuers. Without the usual dialogue, companies are left to interpret how shareholders might vote based on historical behavior and policy documents, guesswork that adds friction, reduces transparency, and increases the risk of being caught off guard. Proactive planning, data tracking, and year-round monitoring of shareholder trends are now essential to stay aligned and avoid surprises.
2. ESG proposals are losing steam, but governance still matters
With tougher rules for no-action relief, the volume of shareholder proposals advanced saw a notable dip. Support for environmental and social proposals continued to fall in the first half of 2025, averaging just 11% while investor backing for anti-ESG proposals fell to a record low of 1.4%.
Governance-focused proposals told a different story. Thirty-three passed with majority support in the first half of the year, reinforcing that investors still care deeply about board structure, accountability, and transparency. That sustained traction suggests governance remains the most reliable path for investors seeking impact, and the most likely area where boards may face real pressure.
3. Activists are picking their battles, and winning them
Activist campaigns may be down in volume, but they’re hitting harder than ever. In the first half of 2025, activists secured 112 board seats, the highest since 2022, even as formal demands for board representation dipped. Over 90% of those seats came through settlements, highlighting a growing preference for quiet, efficient victories.
But the playbook has evolved. Today’s activists often run high‑conviction campaigns that use “vote no” or “withhold” tactics instead of mounting full proxy fights. These targeted efforts are cost-effective and quick, but still carry real pressure.
What this means for boards: You might not see a full-blown proxy fight, but activist pressure is still very real, just quieter. Whether through settlements or vote‑no campaigns, these moves can shift board composition, governance, or strategy without the same level of public fanfare. Being prepared means recognizing threats early, even when the spotlight appears off.
4. Agility and anticipation are now table stakes
This year proved that traditional engagement strategies aren’t enough. Shareholder behavior is shifting quickly, driven by regulation, political pressure, and market volatility, and companies that can’t adapt risk getting caught flat-footed.
Activists are using a wider range of tactics, from quiet settlements to vote-no campaigns. Investors are dialing back engagement and tweaking policies, forcing issuers to make decisions with less direct input. And governance teams are under pressure to respond in real time, even when they don’t have all the information.
Boards need to be flexible and fast-moving. That means understanding the players, anticipating emerging risks, and having a plan ready, not just for the proxy vote, but for everything that might happen before and after it.
5. Data-driven engagement is the new gold standard
With fewer direct conversations happening between shareholders and companies, gaps in communication are growing, and so is the risk of being surprised. In this environment, access to timely, reliable data isn’t a luxury. It’s how governance teams stay grounded when visibility is limited.
Past voting trends, policy updates, and investor behavior are all critical signals when engagement slows. But they only work if boards are tracking them consistently, not just at proxy time, but year-round. Without that foundation, companies are left guessing at what matters most to their shareholders, and often finding out too late.
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