Proxy Advisors as Private Regulators

Proxy advisory firms and large passive asset managers function as de facto regulators by shaping how institutional money votes and what counts as acceptable corporate conduct, effectively enforcing norms across markets even when beneficiaries lack direct input. That private governance can be as coercive as public law when market concentration and reliance on intermediaries standardize behavior. — If financial intermediaries can impose policy through voting and disclosure demands, debates about regulation, corporate governance, and democratic accountability must include these private actors.