Corporate boards devote substantial attention to the views of their largest shareholders, and understandably so. Those investors have traditionally made up the most active and engaged segment of the corporate shareholder base, with established stewardship teams, formal voting policies and reliable processes for casting ballots. But companies face emerging governance questions that are becoming increasingly hard to ignore:

• Does the current shareholder vote reflect the company’s complete ownership base, or primarily the segment of that base that has the time, infrastructure and familiarity to participate consistently?
• If voting is not representative, what are the implications for companies, and what can boards do to address the problem?
• And finally, can new approaches like Standing Vote Instruction programs serve as a constructive part of a broad strategy to increase shareholder participation and deliver a more representative vote?

Why the participation question matters now

The proxy environment is growing more complex and less predictable, making it all the more critical to engage shareholders on a consistent basis by meeting them where they are.

• Retail investors own 29 percent of public company shares but vote only 28 percent of those shares, while institutional investors vote 76.6 percent. As a result, institutional investors may be disproportionately represented in voting outcomes.
• Cross-border ownership adds further complexity, and investors are increasingly using director elections to signal dissatisfaction when other opportunities to express their views are limited.
• Regulatory developments may create new ways to address these challenges. The SEC’s proposal to make electronic communications the default for many investor communications could prompt companies to rethink how they engage retail shareholders.
• Innovation is already underway in the shareholder engagement space. A Standing Voting program can build on existing tools like pass through voting, social media outreach, and targeted communications.

The governance risks of an episodic voting model

Most proxy voting processes are still event-driven. Materials are distributed, a voting deadline approaches and shareholders must act. The process is familiar, but it assumes a level of repeated engagement that is easier for some owners than for others. This model can create governance challenges:

• Crisis-driven engagement: Retail outreach begins only after an urgent vote or controversy.
• Under-representation: Willing shareholders may be absent.
• Uneven impact: Frequent voters can wield influence beyond economic ownership.
• Limited visibility: Outcomes may reflect sentiment, turnout or both.
• Board distraction: Late-cycle mobilization can divert focus from governance, strategy and risk.

These risks vary. Companies with limited retail ownership or high turnout may need no action. Where retail ownership is material and participation remains low, boards should assess the gap.

What a useful management and board discussion should cover

Corporate boards should be pressing their management teams to conduct a comprehensive governance audit to assess whether proxy voting is truly representative of the ownership base. Boards should ask management to quantify retail ownership, historical participation and the potential impact of unvoted shares in a consequential meeting. Based on that assessment, boards should determine whether the participation gap is material enough to merit a structured response and how that response would fit the company’s broader governance strategy.

If the board concludes that the participation gap does warrant a response, it should start by trying to pinpoint the cause of the problem. Low turnout has multiple causes, and there are many remedies boards should consider. Clearer proxy disclosures, more accessible digital communications, investor education, thoughtful outreach, improved account-level experiences and better coordination across intermediaries can all play a role. Strong governance and a credible corporate narrative remain essential; participation tools cannot compensate for weak performance, poor disclosure, or an unconvincing response to investor concerns.

When considering how to address the gap, boards should keep in mind the critical difference between making it easier for shareholders to participate and attempting to influence how they vote. Higher participation does not necessarily increase the chances of any particular outcome. Shareholders may hold different views, and their choices should be respected. The objective is to create a process that gives shareholders a clearer and less burdensome path to express those choices.

One potential part of the answer

For companies experiencing a meaningful participation gap, Standing Voting Instructions deserve consideration as a viable new alternative. These programs allow a shareholder to establish an ongoing voting preference that can apply to eligible future ballots, subject to the terms of the program and the shareholder’s ability to review, revise, revoke or override the instruction.

The value of Standing Voting Instructions is not that it tells shareholders how to vote. It does not. Instead, it reduces the repeated friction of asking shareholders who have already formed a voting preference to start again from the beginning at every meeting.

Management teams that determine whether this program is appropriate for the company should be able to explain to the board how the program would preserve shareholder choice, what information shareholders would receive and how they could change, revoke or override an instruction. The board should also understand which categories of matters may be eligible, which proposals may require special treatment, and how unusual or consequential circumstances would be escalated.

Equally important, management should present Standing Voting Instructions as one component of a broader participation strategy. Clear disclosure, accessible communications, shareholder education and sound governance remain fundamental.

Guardrails for a thoughtful program

If a board chooses to implement Standing Voting Instructions, the resulting program should be voluntary, and shareholders should receive clear, plain-language information about how an instruction operates and how it may be modified, revoked, or overridden. The program should have a defined scope, recognize that certain consequential or unusual matters may warrant different treatment, and include a process for escalating exceptions.

Periodic review can help prevent instructions from becoming stale, while regular reporting gives the board or an appropriate committee visibility into implementation, participation patterns and material issues. Legal, compliance, communications and operational review should inform the program’s design from the outset.

Conclusion

Corporate boards that determine low participation levels warrant a direct, structural response should consider a range of solutions, including enhancing proxy disclosures, digital communications, investor outreach and education, account-level experiences and coordination across intermediaries. They should also consider individualized voting approaches, including Standing Voting Instruction programs. The programs are not a substitute for good governance, shareholder engagement or careful board judgment. But when designed around shareholder choice, defined scope, transparency and active oversight, they can offer boards a practical way to address avoidable participation friction and support a more representative shareholder vote.