Governance Playbook
From compliance to confidence: Proxies that win trust and votes
In this special report, Governance Intelligence provides actionable advice for successfully developing a proxy statement
The 2025 proxy season brought with it a series of emerging practices in proxy reporting. From changing ESG and DE&I references to added cybersecurity and AI considerations, the needs of shareholders and their advisors continue to evolve with greater demands for transparency, detail and clarity.
The proxy statement has always been a critical tool for communicating with shareholders but its significance is even more pronounced amid the sweeping 2025 reporting changes. In a time of heightened scrutiny and shifting priorities, a well-crafted proxy statement can be both a compliance necessity and a strategic asset.
This playbook delivers a comprehensive, actionable guide for companies to enhance next year’s proxy statement by showcasing what stakeholders want and how companies are successfully communicating these key aspects through their disclosures.
What investors and proxy advisors expect for 2026 and how requirements are changing
Case studies that demonstrate award-winning governance
How to balance and prioritize proxy advisors, investors and company needs
Key compliance risks, expected regulatory changes and proactive mitigation strategies
AI tools and technologies governance leaders are leveraging for developing their proxies.
Over the past 12 months, shareholder expectations have shifted notably, reflecting broader global trends and economic pressures. Investors are increasingly demanding transparency, not just in financial performance but in ESG practices too.
Keith Dolliver, associate general counsel, legal and corporate affairs and assistant secretary of Microsoft Corporation, says that these changes are expanding ‘particularly the S part of ESG’.
‘When social and political issues that are not just national, but global, impacting how and where we do business, it has this wide-ranging effect,’ he adds. ‘If you look at last year's proxy, we had a few of those points come up around how we make decisions, on citing data centers or how our technology is used.’
These topics form part of a wider cultural conversation that in some ways has been now expanded to include all sides of the discussion.
‘In general, our philosophy has been to engage where we think that it makes sense and where we think there's a possibility of reaching a conclusion that would satisfy both Microsoft and the proponent,’ says Dolliver.
Keith Dolliver, Microsoft Corporation
Daniel Kim, Fortive
Similarly, Daniel Kim, associate general counsel and corporate secretary at Fortive, says that from an ESG and DE&I standpoint ‘the overall environment has shifted from companies following private ordering and strict regulatory disclosure demands to companies thinking about the aspects of their sustainability and DE&I efforts that are really material for their shareholders.’
Jessica Jarvi, Western Alliance Bancorporation
Jessica Jarvi, chief legal officer and secretary at Western Alliance Bancorporation, says that her company adopts ‘a multi-faceted approach’ that emphasizes ‘sound governance, a robust risk management framework and a compliance-driven ethos’. In doing so, she says that disclosures grounded in these values consistently satisfy shareholders.
‘Rather than altering tactics to chase trends, we focus on articulating how our governance practices and risk oversight support sustainable performance and responsible leadership,’ she explains.
On the topic of cybersecurity and AI, Kim says managing cybersecurity is becoming more complex with the SEC's disclosure requirements.
‘I think you are seeing a lot of companies being more transparent in disclosing their cyber security risk program and prior incidents,’ he notes. For Kim, AI disclosure is where ESG was in the early days, with companies feeling pressure to report on their AI program just to keep up.
‘I think what you are seeing is shareholders and the SEC pushing back and saying, “Tell us where you guys are really playing on artificial intelligence and focus the disclosure on how the company's leaning in and how AI is relevant to your specific company”.’
As some of the largest passive investors have recently scaled back their emphasis on strict diversity quotas, the responsibility for setting and communicating board composition priorities has shifted more squarely back to the nominating and governance committee chairs.
This change raises important questions about how companies are now approaching board diversity in their proxy statements. Has this shift altered the tone, focus or depth of disclosure, for example?
Over at American Water Works Company, Jeffrey Taylor, vice president, chief SEC counsel and secretary, says it hasn’t. ‘As a general rule it hasn't changed how we think about diversity,’ he explains. ‘If you look at our proxy statement and you look at the disclosures that are related to director representation on our board, our disclosures in that regard have not changed.’
American Water’s investors have said they want more information about who its directors are – not just their backgrounds, nor just their resumes or bios – and they want to be able to see that our board is inclusive and representative of the communities that it serves.
Taylor says that the company did a holistic review ‘that led us to rewrite certain elements of our proxy statement to better align and describe what we do with our operations, strategy and values’.
‘In terms of director diversity, how we think about that has not changed in that regard,’ he adds. ‘The nomination and governance charter is reflective of director diversity in all its elements and in its many forms.’
At a time of heightened investor scrutiny and evolving governance standards, companies are receiving increasing feedback from both investors and proxy advisors regarding their proxy disclosures.
Michael Hill, director, corporate counsel at Prologis, says that the proxy statement is not just a compliance document, but a strategic tool used to reflect values, reinforce trust and provide a platform for clear, meaningful engagement with shareholders.
‘To ensure it remains user-friendly and responsive, we conduct regular outreach with investors and proxy advisors and incorporate their feedback into our disclosures,’ he explains.
During the 2024–2025 proxy cycle, Prologis investors asked for a more streamlined compensation discussion and analysis. ‘We cut the length nearly in half while maintaining the robust disclosure and transparency that our investors value,’ says Hill. ‘We also heard calls for more insight into executive succession planning.’
Over several years, Hill and the rest of the Prologis team expanded these disclosures, resulting in the 2025 proxy statement with ‘clear detail on our planned CEO transition in 2026’.
Companies are increasingly looking for effective ways to gather and incorporate shareholder input into their proxy statement development process.
Dolliver reminds us of a couple of things: first, there’s the required disclosures in the proxy statement and a set of rules that corporates must follow.
‘Second, we also think of it as an opportunity to communicate with our shareholders and stakeholders more broadly, because we know that not just shareholders read the proxy,’ he adds.
For Microsoft, the priority is to consider how the business has changed. It is an opportunity for Dolliver and his team to talk about where they’ve seen success, where they’ve encountered challenges and how the company is evolving.
‘We also do so with our other documents, like the 10-K the 10-Qs, over the course of the year [but the proxy is a unique format]. We’ll also talk about how our board of directors engaged in issues that have come up in connection with the evolution of the business and how they think about risk across those businesses,’ he adds.
‘All of this starts with management, but we share with the board on a very regular basis, getting feedback from the board throughout the course of the preparation of the materials.’
Investor expectations are broadening beyond financialsShareholders now seek greater transparency on ESG and DE&I, especially the ‘S’ component tied to global social and political issues.
ESG & DE&I disclosures are becoming more strategicCompanies are moving from compliance-based to materiality-driven disclosures that align with shareholder interests and business impact.
Cybersecurity and AI are emerging disclosure prioritiesFirms face pressure to be transparent about cybersecurity programs and provide clear, tailored insights into their AI strategies.
Board diversity remains a focus – but on company termsDespite reduced investor pressure, companies continue to prioritize inclusive board composition aligned with core values and community needs.
Referencing the most recent 2025 proxy season, Taylor says American Water considered its ESG and DE&I disclosures ‘holistically’ with one eye on reviewing them.
‘We started with the 10K, and we did make some changes in how we described our DE&I and ESG efforts,’ he says, adding that the company is talking about ESG ‘more in the terms of sustainability’ and in line with their wider reporting.
‘At the same time, we see that the term ‘DE&I’ has become somewhat of a lightning rod right now,’ Taylor explains.
‘And what those letters and acronyms mean to some people may not mean the same to others and might not be the descriptor of what we are doing.’
So instead of using a term that could be ‘misunderstood or misread’, American Water used terms that better describe the company’s mission and actions.
Over at Fortive, Kim and his team were intentionally focused on what they are trying to accomplish through ESG and DE&I programs.
‘For ESG, especially sustainability, the products that we manufacture play such an important part in the sustainability efforts of our customers that sustainability is specifically relevant to our company and to our financial results,’ he explains.
Considering DE&I, he says they were not focused on what disclosures special interest and governance activists were pushing for, but on ‘what really matters for our culture’, describing an environment that is inclusive and centered on making Fortive a great place to work.
One of the challenges around creating effective ESG and DE&I reporting is balancing narrative versus data-driven content.
Dolliver’s approach is to adopt a philosophy which is ‘very thoughtful about our principles on a particular topic that we want to articulate’.
He recognizes it ‘sometimes can mean we are not going to take a public position at all, because it is not always our place to do so’. On the other hand, if it has an impact on Microsoft employees, its shareholders or its business ‘then we may take a public position’.
In the case that the company decides to speak to a subject ‘then we try to articulate the principles by which we come to decisions and public action, business decisions or public statements,’ he adds. ‘We articulate that from the position of those principles and then explain how those principles have been applied to the decision we've made’.
This methodology helps the company avoid the more contentious discussions and get people to engage in a more constructive way, Dolliver explains.
However a company chooses to approach its reporting, aligning ESG and DE&I disclosures with stakeholder expectations comes with its share of challenges.
Hill says balance is key. ‘With so many evolving frameworks and diverse stakeholder expectations, it’s easy to get caught up in trying to do everything at once,’ he adds.
‘We’ve found that staying grounded in our mission – focusing on what’s good for our business and stakeholders – keeps us from oversteering. That approach has helped us align disclosures in a way that is both transparent and practical.’
Leveraging the right tools and technologies has become essential for streamlining the process and enhancing the quality of the proxy statement. At Microsoft, they use AI across their preparation process. ‘You can absolutely use it for research,’ says Dolliver. ‘For example, [Microsoft’s AI tool] Copilot can pull up stock price performance or remind me of revenue growth at any given time. It can also help in drafting documents.’
He stresses they would never take a Copilot-generated draft and put it directly in the proxy, but it can provide a good first draft or suggest different framing. To date, Dolliver and his team have not used AI for proxy design but he ‘can certainly see us using it to create better graphics like graphs and displaying some of the data.’
Taylor also sees the potential for technology to help. ‘We have an SEC filing software package that we use across the board for all our SEC reporting, not just the proxy,’ he notes. ‘It’s very helpful.’ They also use DFIN as their financial printer to prepare and print all proxy materials.
Similarly, Sylvia Kim, assistant general counsel at Fortive, used DFIN’s ActiveDisclosure software for the first time this year. She describes the process as a ‘heavy lift at first,’ getting all the data and disclosures into the program and learning the new interface. But, once implemented, it streamlined the process by eliminating middlemen who had previously marked up PDFs and manually exchanged revisions.
‘We still use spreadsheets for collecting data, but thanks to the interface with DFIN’s ActiveDisclosure we could import data much more smoothly than in past years,’ says Kim. Her team also used Smartsheet for planning and team check-ins.
Jarvi and her team at Western Alliance Bancorporation also use ActiveDisclosure to draft their proxy statement.
‘ActiveDisclosure has evolved and our team finds it easy to use and the ability to collaborate within the tool is efficient,’ she notes. ‘In addition, we partner with DFIN’s creative design team to enhance the visual impact of our data-driven content.’
For Hill and the Prologis team, AI – particularly their in-house PLDGPT platform – along with data analytics and design tools have been key for compiling their 2025 proxy. ‘AI is a top priority for Prologis’ he adds. ‘Our legal department includes AI in performance goals and requires everyone to take AI training to prepare as architects of the future.’
The role of the board and executive team in shaping disclosure strategy is crucial, with varying levels of involvement depending on the company.
According to Dolliver, the board isn't directly drafting the proxy statement, but their feedback is vital: ‘We send them drafts...and they are very much encouraged and invited to give us feedback.’ The board then helps to refine topics and ensure the right areas are highlighted.
Taylor echoed this sentiment, noting that while the executive leadership team (ELT) is involved at several touchpoints during the proxy preparation process, the ‘right cadence of review and approvals needs to be appropriate for your company.’
Hill stresses that their leadership team views the proxy as a strategic platform to engage with investors. ‘We are fortunate to have leadership that views the proxy statement not merely as part of our disclosure and stockholder voting process, but as a strategic platform,’ he adds.
Kim emphasizes the importance of strategy guiding disclosure. ‘Strategy must come before disclosure,’ she says. ‘We want our disclosure to be dictated by strategy.’
Planning for the proxy statement starts earlier than one might expect. Dolliver shares that his company begins discussions about the upcoming proxy in February, even though their year-end is June 30. ‘We have the first conversations about who will be part of the working group...what do we initially think will be topics or focus areas we are going to have this year,’ he explains.
Taylor says that American Water’s proxy process has become almost a year-round affair. ‘We start talking about the next proxy statement, right after we complete the annual meeting for the current year,’ he adds. ‘It's really becoming a 12-month process.’
Similarly, Jarvi says that for Western Alliance Bancorporation this is also a year-round process. ‘We research and observe trends and patterns throughout the year, which informs our planning and drafting process,’ she adds. ‘Drafting begins in earnest during January each year and is tied to our Annual Report and 10-K.’
Hill echoes this thought. ‘Proxy season never really ends,’ he adds. ‘We regularly review our compensation programs...this mindset helps us stay nimble, capture relevant developments and keep our proxy message fresh.’
Fortive begins preparations as early as October, reviewing prior year action items and planning for the upcoming year. ‘We start getting the team together around the October time frame and start thinking about the action items,’ says Kim.
Cross-departmental collaboration is essential for the proxy statement preparation process, though – as Taylor highlights – each company approaches this differently.
At American Water, the SEC team leads the process for the proxy except for the CD&A, which is led by the executive compensation team. ‘You need somebody at the top,’ Taylor adds. ‘You cannot run the proxy statement process by committee.’
Hill shares that at Prologis, preparing the proxy is a ‘deeply collaborative, cross-functional effort’ with legal, HR, and accounting teams working together to align messaging and ensure compliance. ‘It is paramount that our proxy fully complies with all disclosure requirements but also recognizes the value of the proxy as a strategic communications tool,’ he adds.
Design and presentation play a significant role in the effectiveness of the proxy statement. Hill says that at Prologis the design process reflects the company’s commitment to clarity and excellence. ‘Through this structured and cross-functional process, we produce a proxy statement that not only meets disclosure requirements but also serves as a model for clarity, design excellence and company-wide alignment,’ he explains.
Kim says that Fortive prioritizes making the proxy statement user-friendly and representative of the company’s philosophy, with board involvement in every stage of both strategy and disclosure. ‘As we formulate the disclosure, we try to distill the strategy...into disclosure in the proxy statement that is user friendly,’ he adds.
Ensuring that the proxy statement addresses shareholder concerns requires ongoing engagement and responsiveness. Dolliver says that his board’s experienced feedback helps shape the content, making sure no important topics are missed. He regularly asks his team: Did we leave something out? Did we put too much emphasis on a particular topic?
Taylor notes that feedback from both the board and the executive leadership team (ELT) is incorporated into the review process, ensuring the final document aligns with investor interests. ‘We give them time to review, think about the disclosures and give us comments,’ he explains.
Hill says that Prologis’ leadership team continuously refines the process to align with investor priorities. ‘Their feedback ensures we address the issues investors care about most while staying true to our company’s philosophy,’ he adds.
Balancing regulatory compliance with strategic messaging is a delicate task. Kim says his company carefully tailors its disclosure process to reflect both company strategy and regulatory needs: ‘The board is heavily involved in all aspects of our business strategy, sustainability strategy, compensation strategy and governance strategy.’
Taylor says the proxy statement is an important communication tool, so striking a balance between compliance and message clarity is key. ‘You need to develop the logistics and have a fully represented team... but you need somebody who is serving as the quarterback,’ he adds.
You need to develop the logistics and have a fully represented team... but you need somebody who is serving as the quarterback
Managing feedback and revisions is critical for a timely and effective proxy statement. For Taylor, this requires an organized approach where key stakeholders receive targeted review points. ‘We seek approval of the proxy statement in mid-February before we file it towards the end of March,’ he notes. Hill echoes this sentiment, saying a structured approach to revisions helps ‘ensure messaging is consistent throughout the proxy.’
Dolliver emphasized the importance of providing ample time for review. ‘The most valuable thing is to get them the draft fairly early in the process, so they are involved as we're setting the topics.’
Emerging trends often require companies to adapt disclosure strategies quickly. Kim says that staying aligned with evolving corporate strategies keeps disclosures relevant. ‘We don’t want strategy to be dictated by disclosure; we want our disclosure to be dictated by strategy,’ he notes.
Dolliver echoes the importance of responsiveness, saying early involvement of the board and ELT allows him to address emerging concerns with agility. Taylor also stresses the importance of ELT and board reviews and having a clear process to measure disclosure effectiveness. ‘You need somebody who is serving as the general, who is making sure all the elements are coming together on time and on target,’ he says.
We don’t want strategy to be dictated by disclosure; we want our disclosure to be dictated by strategy
As we approach the 2026 proxy season, what advice do our governance experts have for corporate issuers?
Dolliver says that key regulatory changes, particularly the ongoing efforts to regulate proxy advisory firms, such as ISS and Glass Lewis, are important to bear in mind. ‘The downstream impacts of that will be on the proxy process and how they interact with corporate issuers,’ he adds, also noting that there is potential for the SEC to allow companies to exclude certain shareholder proposals. ‘It will be interesting to see how proponents change their approach,’ he summarizes.
Kim reiterates the importance of regulatory changes, especially regarding executive compensation disclosure. ‘It seems like there's a lot of desire to update and modernize the executive compensation disclosure rules,’ he notes, though he adds that changes may not come soon enough for the upcoming season.
He also mentions the push for enhanced sustainability disclosures, particularly from European investors, despite setbacks in the US. ‘Balancing disclosures to satisfy different stakeholders will be an interesting challenge,’ he notes wryly.
When it comes to boosting clarity and effectiveness, Taylor has some contentious advice: redesign the proxy twice. ‘The proxy statement is now in a good state...it took about eight years in total to complete,’ he explains. But it is important to compare your current proxy with where you want to be and soliciting shareholder feedback, he notes: ‘Ask your shareholders if there’s anything we can improve in terms of clarity or content.’
Hill recommends focusing on straightforward, data-driven proxies. ‘What core messages do you want readers to take away?’ he asks. Potential focuses include aligning key themes with strategy and performance or explaining ‘why it matters.’ He also emphasizes the power of design, where headers, graphics and clean organization can make complex topics accessible.’
Kim suggests conducting annual shareholder engagements to improve proxy disclosures. ‘We reach out to our top shareholders and get feedback on what they liked or didn’t like,’ he says, adding that this engagement helps guide improvements for next year’s disclosure. Direct engagement with governance and stewardship teams is also a crucial source of inspiration for incremental changes which, combined with peer learning, ensures that disclosures evolve in line with investor expectations.
Dolliver agrees, saying that investor input should shape the development of the company’s proxy. ‘We ask our shareholders if there’s anything we can improve in terms of clarity or content.’ Recent specific requests, like the addition of a director skills matrix, have now become core parts of the process.
Jarvi adds that professionals should ‘engage with your proxy statement partners (such as DFIN and your proxy solicitor) and have a clear vision of what your company’s strategy is,’ adding that ‘when disclosures are tied to strategy the message becomes clear’.
For Hill, it always comes back to listening to your stakeholders. ‘Do regular outreach to understand shareholder needs, evolve your programs accordingly and then clearly show in the proxy what you heard and how you acted,’ he advises.
Do regular outreach to understand shareholder needs, evolve your programs accordingly and then clearly show in the proxy what you heard and how you acted
