Opinion: JPMorgan is Ditching Shareholder Advisory Firms in Favor of AI. This is a Reckoning
Corporate governance is entering a new era that will test the principles that underpin shareholder democracy.
JPMorgan Chase’s JPM-N asset management unit, which oversees more than US$7 trillion in client assets, has made a consequential move. It has severed ties with proxy advisory firms and will now entrust shareholder voting recommendations to a proprietary AI platform, Proxy IQ.
This isn’t a routine operational change. It’s the latest salvo in a proxy power shift.
For decades, proxy advisers such as Institutional Shareholder Services and Glass Lewis & Co.—whose research and voting recommendations are used by institutional investors—have helped shape decisions on voting outcomes at public companies.
Criticism of Proxy Advisers
Critics have long argued that these firms wield disproportionate influence, with limited visibility into their methodologies and potential conflicts of interest across their business lines.
Influential policymakers in the United States agree. A recent White House executive order directs federal regulators to reassess the proxy adviser industry’s role in shaping corporate governance and to consider heightened transparency and fiduciary standards.
Given that JPMorgan chairman and CEO, Jamie Dimon, has consistently criticized proxy advisers over the years, one might reasonably ask why it took so long to make this move and whether there is a cost advantage.
The Implications of AI in Proxy Voting
Regardless, when AI begins to influence the votes that shape the future of companies and trillions of dollars in assets under management, difficult questions follow:
- Who is accountable when an AI-driven vote produces unintended consequences from hallucinations?
- How do beneficial owners (the pensioners and everyday investors whose shares are being voted) know whether these systems are free from bias, resilient to cyber-risk, transparent in their logic, and reliable in their conclusions?
Market pressure will likely force greater disclosure around how AI-driven proxy voting systems are trained. Until then, the likely outcome is reduced transparency and further fragmentation in proxy voting outcomes.
For issuers, life will become harder, not easier.
While JPMorgan’s AI move is only for the U.S. proxy voting process, the implications are equally urgent for Canada.
Canadian securities regulators have made clear that existing fiduciary obligations apply if and when asset managers use AI systems.
The Importance of Proxy Voting
Proxy voting shapes decisions on mergers and acquisitions, sustainability commitments, board composition, and executive compensation. These are issues that define capital markets activity, corporate purpose, and societal impact.
Guiding Principles for the Transition
Three principles must guide any transition:
- Clear standards for accountability, bias mitigation, and cyber-resilience are essential when algorithms vote on behalf of beneficiaries.
- Firms using AI must disclose their approach to the public, whose capital they steward or seek to attract. Shielding AI-driven proxy voting systems from scrutiny risks simply replacing one black box with another.
- Boards must engage proactively to navigate the current state of ambiguity.
In the 2025 proxy season, AI governance proposals on Canadian ballots increased from zero the year before to double digits. Though none passed, and average support remained modest, the trend is clear. Shareholders want oversight and accountability around AI deployment in the governance process.
At the same time, we should recognize the risk of unintended exclusion.
A wholesale retreat from external expertise could leave smaller investors at a disadvantage, particularly where internal resources for governance research are limited. A thoughtful transition must preserve access to high-quality analysis across the market.
JPMorgan’s decision will not be the last. The proxy advisory model is under strain, and AI will accelerate its transformation.
The question is no longer whether AI will reshape corporate governance. It is how, and at what cost.
The stakes are clear. The proxy revolution has begun.
Done right, AI can fortify governance for generations. Done wrong, it could dismantle the very foundations of shareholder democracy.
