Stewardship is evolving amidst regulatory changes and increased scrutiny. Shareholder voting is becoming more strategic and faces heightened expectations around ESG issues. Passive managers are defaulting to board-aligned voting policies, potentially prioritizing short-term performance over long-term resilience and shareholder engagement.

Passive managers are adopting pass-through voting mechanisms to allow investors to direct votes on underlying equities. Wealth management firms like LGT are leading the way in embracing this approach. The SEC saw a 35% increase in no-action requests in the 2025 proxy season, highlighting a potential imbalance in shareholder influence.

LGT Wealth Management implemented pass-through voting to align client values with voting decisions. In the first half of 2025, they voted on over 800 companies, diverging from delegated manager recommendations 17.5% of the time. Clients expect high standards in stewardship across all investment vehicles, driving banks to enhance their voting frameworks.

As markets shift towards passive investing, banks must prioritize stewardship to meet client demands. Robust voting frameworks, clear reporting, and thoughtful policy design are key differentiators in a competitive landscape. Pass-through voting ensures consistency, transparency, and alignment with client mandates, giving banks a commercial edge.

Siobhan Archer, global stewardship lead at LGT Wealth Management, discusses the importance of pass-through voting for banks in meeting client expectations. The rise of this voting mechanism signifies a shift towards more transparent and aligned stewardship practices in a rapidly evolving market.

Read more at Yahoo Finance: Reclaiming the vote. What the rise of pass-through voting means for banks