five priorities for directors: PwC
Regulatory shifts are rewriting the rules of engagement between companies and their shareholders. In 2025, the SEC took two significant steps that altered this relationship. First, it revised its guidance on beneficial ownership reporting to clarify that large investors conditioning their support on specific company actions could be deemed active (rather than passive) investors. Then, for the 2026 proxy season, the SEC announced that a company may exclude certain shareholder proposals by relying on prior SEC determinations, without needing a fresh review in each case. Meanwhile, proxy advisory firms have signaled they are moving away from one-size-fits-all voting policies. Most recently, a new White House executive order put both proxy advisors and the shareholder proposal process in the crosshairs, directing regulators to reassess whether current proxy voting practices provide sufficient transparency and investor protection. In the near term, these developments could make voting outcomes more varied and less predictable than in the past.
Over the longer term, the implications are far-reaching. Investors who once relied on non-binding shareholder proposals to voice views on governance and sustainability issues will need to find new ways to communicate their priorities. A board and management team that was accustomed to semiannual investor check-ins and gradual relationship-building will also have to recalibrate its approach to gathering shareholder feedback. Traditional engagement playbooks may no longer apply.
As shareholder–corporate engagement continues to evolve, boards will need to be more agile and proactive in demonstrating responsiveness to investor perspectives. In a volatile economic environment, directors should double down on the strong relationships they have built with major investors. Open, constructive dialogue—and a willingness to adapt based on investor input—will be essential to maintaining investor confidence and heading off potential conflicts. A board that stays attuned to these regulatory shifts and adapts its engagement strategy accordingly will be better positioned to earn investor trust.
Takeaways for the board:
- Establish clear coordination between management, investor relations, and the board on engagement and proxy voting objectives. Arrange for directors to receive regular briefings not only on what investors are saying but on where the company is (and is not) getting meaningful feedback.
- With fewer traditional touchpoints, look beyond proxy season to engage investors. Consider third-party forums—conferences, roundtables, or other curated gatherings—to create additional opportunities for ongoing shareholder dialogue.
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