Investors' Expectations: Navigating the Governance Landscape

In early 2026, a structured survey was conducted among global institutional asset managers representing approximately USD 17.40 trillion in assets under management (AUM). The research provides a rare window into the evolving stewardship priorities, voting policies, and governance expectations that will define the upcoming proxy season. As shareholder engagement increasingly influences corporate strategy and board accountability, this report serves as a critical roadmap for boards and governance professionals.

Key Report Findings

1. Governance as a Primary Investment Driver

Governance is no longer a "secondary" consideration. While 71% of surveyed investors maintain a long-term horizon (>5 years), 100% of respondents stated that governance factors have either a "strong" or "moderate" influence on their portfolio construction. Notably, no investor suggested that governance has only a minimal impact, highlighting its central role in modern asset management.

2. The Shift to Skills-Based Board Oversight

Investors are moving beyond demographic diversity to demand explicit evidence of board competence in specialized risk areas.

• Skills Matrices: Most investors now rely on board skills matrices and detailed director biographies to assess oversight capabilities.
• AI Oversight: 57% of investors favor a hybrid approach where AI expertise is represented at both the board level and within operational committees.
• Competency Training: While basic training is currently the minimum expectation for directors, hands-on experience is becoming a stronger requirement for companies in sectors highly exposed to AI risks.

3. Executive Pay: The "Pay-for-Performance" Mandate

Remuneration remains a top-tier priority for 2026.

• P4P Alignment: 71% of investors identify Pay-for-Performance (P4P) alignment as the most critical factor in their evaluation of compensation.
• ESG Integration: Investors view ESG-linked pay as a "best practice" when these metrics are financially material, measurable, and clearly linked to long-term strategy.
• Global Standards: 64% of investors believe companies should treat local law as a baseline but apply higher governance standards where investor expectations are more stringent.

4. Stewardship Stability Amidst Political Headwinds

Despite localized political pushback against ESG and DEI themes, institutional stewardship remains remarkably stable.

• Policy Continuity: A large portion of respondents report no significant change in their stewardship practices, continuing to uphold their internal voting guidelines regardless of external political pressure.
• Reporting Preferences: Investors show a strong preference for globally harmonized reporting standards, with the ISSB (IFRS S1 & S2) and TCFD recommendations remaining the gold standard for climate-related disclosures.

5. 2026 Voting Outlook: Assertive Continuity 

While no "structural shifts" are expected for the 2026 proxy season, investors signal a more assertive stance on specific governance items:

• Overboarding: Stricter limits on director commitments are anticipated.
• Hybrid AGMs: There is a strong, consistent preference for hybrid meetings over "virtual-only" formats to preserve shareholder rights and board accountability.

Explore the full report for an in-depth analysis.