JPMorgan abandons proxy advisers and turns to AI

Core Viewpoint - JPMorgan Chase's asset-management division has decided to end its relationship with proxy advisory firms and will now manage shareholder voting internally using AI technology, amidst increasing regulatory scrutiny in the proxy advisory sector [1][3]. Group 1: Company Actions - The asset-management unit will utilize an internally developed AI platform named Proxy IQ to manage and analyze voting at over 3,000 annual meetings of US companies [2]. - JPMorgan is the first major investment firm to completely eliminate the use of external proxy advisers, opting to rely solely on its internal stewardship team and technology for voting decisions [3]. Group 2: Industry Context - Proxy advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis assist investment institutions with proxy voting complexities [4]. - Recent regulatory developments have prompted ISS to clarify that it does not set corporate governance standards, allowing clients to retain full discretion over their decisions [5]. - Glass Lewis has announced plans to cease offering widely distributed benchmark recommendations by 2027, shifting focus to tailored advice for individual clients [5].