In a more fragmented and uncertain world, stewardship and strong shareholder rights are essential to maintaining trust, discipline and long-term market stability.
You might say that 2026 has got off to a rocky start. War in Europe. War in the Middle East. Fissures appearing in the key Western defence alliance. Sidelining of international law in favour of strong-arm politics. From this vista, the post-financial crisis drive for ‘caring capitalism’ seems fanciful; we are in an era of distrust and insecurity.
This matters to investors. Markets function best when they rest on strong foundations, secure property rights, predictable policymaking, independent courts and institutions that command confidence. These are not abstract ideals. They underpin confidence, enabling companies to invest, build supply chains and plan for the long term. When those foundations weaken, business risk rises.
Through 2025, financial markets were buoyed by easier fiscal and monetary conditions and optimism that artificial intelligence could unlock a new phase of productivity growth. In 2026, however, the rose-tinted glasses appear to be coming off. With the US and Israel launching military strikes against Iran in February, choking off a third of global oil supplies and essential sources of fertiliser, geopolitical ructions are breaking through. As at the end of March, global market gyrations saw the VIX fear gauge peaking above 30 – a measure of high market volatility – and overall key equity market benchmarks down for the year.
Where does all this leave stewardship?
Stewardship grew as an investment philosophy following the financial crisis of 2007–08; an important moment of revelation for how short-termism can sow the seeds of economic pain, and – crucially – how investors are themselves key actors in delivering sustainable market outcomes.
Specifically, investors’ failure to hold bank executives accountable for excessive risk-taking in the years before the crisis contributed to systemic market failure. Stewardship, therefore, has at its heart an understanding of investors’ agency in delivering long-term prosperity.
Almost 20 years on, here we are again. Mirroring the erosion of global governance, structures that promote long-term responsible ownership are being dismantled in Western democracies. Responsible stewardship is being reframed as a ‘woke’ campaign, justifying steps that reduce shareholders’ voice and hand increasing power to executives. This risks sowing the seeds for the next crisis. Examples are not hard to find – while many have started in the US, the ripple effects are evident in the UK and Europe.
Voting rights under attack
In the US, Texas has been leading the charge. The law Texas SB 1057, adopted last year, allows firms to establish higher thresholds for shareholder proposals at AGMs than federal law. Compared with the SEC’s minimum ownership of $2,000 to $25,000, Texas now demands shareholders hold at least 3% of voting shares, or at least $1m, and solicit at least 67% of voting shares just to get a proposal onto the ballot.
Texas SB 29 permits pre-emptive court determinations of director independence and narrows shareholder books and records inspections. Others are following. Delaware – which has the largest number of US incorporations – passed SB 21 restricting shareholders’ books and records access and creating safe harbours shielding conflicted and controlling shareholder transactions from judicial scrutiny. Rather than defending investor rights, SEC Chair Atkins has indicated he will take the changes to a federal level.
The UK Government also seems intent on taking us back decades, abandoning core governance standards under the rubric of deregulation. In 2024, the premium listed market was abolished, and with it one-share one-vote, shareholder votes on significant transactions, rules governing related-party transactions, and mandatory written controlling shareholder agreements.
Emboldened by the anti-shareholder mood, corporates are flexing their muscles. Having pursued litigation against shareholders for filing a climate resolution in 2024, Exxon has gained SEC approval to automatically lock in retail investor votes in favour of management – insulating the board from shareholder pressure.
The chilling effect is palpable: according to Bloomberg, no shareholder resolutions were filed at Exxon in 2025, the first time in 25 years, and US shareholder resolutions were down 25%. In March BP set a new precedent for the UK by refusing to circulate a climate-related shareholder resolution for its 2026 AGM.
Back to the dark ages?
While voting rights are the means through which shareholders hold boards accountable, reliable reporting is the bedrock on which accountability is built. Here too, standards are slipping. While few were surprised the Trump administration revoked ESG disclosure requirements, it has gone further to define ESG factors as immaterial – whatever the truth. Companies are to keep quiet on potentially investment-relevant disclosures simply because they are labelled ‘ESG’. Under another rule change, ‘non-pecuniary’ ESG factors would be deemed contrary to federal pension fund obligations. Pension managers who account for climate risks will risk breaching fiduciary duty.
The EU has also been ‘streamlining’, removing about 80% of previously in-scope companies from the Corporate Sustainability Reporting Directive. To be clear, some of this represents an overdue recalibration – the EU’s reporting standards run to approximately 1,144 data points, an order of magnitude more than financial disclosure requirements. Globally, an alphabet soup of reporting frameworks like GRI, SASB, TCFD, CDP, ISSB, ESRS, or TNFD compete for attention with little consistency. The ESG industry has become a parallel universe, too rarely connected to decision-making on capital deployment. But replacing an ‘ESG’ tick-box regime with an ‘anti-ESG’ tick box regime is equally flawed. Efficient markets require reliable disclosures that enable an assessment of long-term value.
And what of audit protections?
One of the least visible but most important parts of an effective accountability system is rigorous independent audit. Years of progress in driving higher quality audit has been upended in recent months. In mid-2025, the US Government removed the federal audit regulator’s leadership, cut its funding and reversed key rules. There have been no enforcement actions since.
The UK Government announced in January that it will abandon a decade’s worth of reforms. Key casualties include enhanced capital maintenance protections and a new independent audit regulator with greater enforcement powers.
Unnoticed and unchallenged
The sustained attack on shareholder rights and good governance is largely going unchallenged, despite efforts by some such as the International Corporate Governance Network (ICGN). BlackRock, State Street and Vanguard – together managing trillions of dollars of assets – appear to be keeping their heads down.
In the 2024–25 proxy season, both BlackRock and Vanguard supported 99% of director re-election proposals at S&P 500 companies — near-blanket deference to management. Their support for shareholder resolutions has become almost a rounding error. Once an advocate for shareholder stewardship, BlackRock’s CEO’s 2026 letter to investors makes no mention of the profound changes afoot.
What to do?
Pendulums swing. They always have, and markets have proved remarkably resilient. The trouble is that what we are witnessing now is dangerous because it is characterised by the degradation of socioeconomic institutions that consumers and investors depend on. In today’s insecure world, the need for key market actors – including asset managers – to play a positive role is more important than ever. Responsible stewardship cannot answer all the world’s ills – but that should not be an excuse for paralysis.
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