Back to Global Corporate Governance Trends for 2026
As predicted, there were significant attempts to redefine the relationship between public companies and their shareholders in 2025. Amid political and regulatory climate changes, efforts to shift the balance of power toward company management and away from shareholders and their proxy advisors were remarkable. Most of those proposals are unresolved, which could cause observers to believe that 2026 will herald the end of the modern era of investment stewardship in the United States.
Those beliefs are misguided. While the relationship between companies and their owners – particularly their passive owners – will continue to evolve, investors and other experts told us that there remains important work for investors in support of generating return on investment and minimizing risk to their portfolios and asset owners. Those changes that do occur may turn out to be “careful what you wish for” moments for companies that already have less clarity about what to expect in proxy voting recommendations and votes than in prior years. Companies that build meaningful, non-transactional relationships with their investors stand to gain, while others face continued risk.
Recent regulatory developments have reinforced this shift. Earlier in 2025, the FTC and DOJ issued a joint statement making clear that, while engagement on certain governance-related topics (e.g., board size, compensation, reporting) is permissible under investors’ “passive” antitrust exemption, activities crossing into operational coordination or strategic direction could expose investors to antitrust scrutiny. More recently, in November, the SEC announced that it would no longer respond to no-action requests or express views on exclusion of most shareholder proposals. And in December 2025, the White House issued an Executive Order aimed at increasing oversight and curbing proxy advisor influence. These moves collectively reduce the predictability of the shareholder proposal and proxy-voting ecosystem while shifting more discretion – and responsibility – onto both investors and companies.
The market has already begun evolving in response. Even prior to the White House’s announcement, ISS and Glass Lewis each announced significant changes to their proxy voting approaches, shifting away from standardized “benchmark” voting recommendations toward more bespoke, client-specific policy frameworks for the 2026 proxy season. The desire to uncouple proxy administration from proxy voting recommendations has also led other organizations to offer new services to investors.
Despite hopes in some quarters that these policy dynamics will chill investors’ interest in pushing for preferred behaviors that they believe will increase the value and decrease the risk of their investments, experts reject the notion that shareholder engagement will subside completely. As one interviewee commented, “The perception that [investors and issuers] are not talking is wrong. The engagement is very helpful.” Although developments in 2025 introduced a period of short-term uncertainty, we observed that engagement has largely resumed along familiar lines.
While there has been a meaningful shift away from heavy engagement on environmental and “social” topics, the level of interest in core governance issues has not waned. In the first half of 2025, governance-related proposals submitted to companies among the Russell 3000 received 38% support, whereas environmental and “social” proposals received only 10% and 12% support, respectively. Interest in board composition, CEO succession planning, and capabilities related to AI oversight will be important for companies and their owners in 2026. In this environment, companies should be careful before diminishing their engagement on governance issues and with institutional investors. Companies that underinvest in those efforts or are seen as taking too much advantage of the more pro-company environment may come to regret it.
Passive investors have long expressed interest in the mix of backgrounds, skills, and experience represented in their investments’ boardrooms. Language from BlackRock’s 2026 Benchmark Proxy Voting Policy highlights this belief: “Companies whose boards are comprised of appropriately qualified and engaged directors, with professional characteristics relevant to a company’s business, enhance the board’s ability to add long-term financial value and serve as the voice of shareholders in board discussions.”
More active investors also care about board composition, recognizing both its importance to business success and its utility as an issue that can sway passive investor support to their proxy contests. This interest is not new; however, some tools are—most notably the Universal Proxy Card (UPC). As we predicted, the UPC era encourages investors and other stakeholders to evaluate board members both collectively and individually, pushing voters to identify the “weakest” directors on the basis of proxy disclosure.
Echoing our previous recommendation: boards should proactively assess their own potential vulnerabilities before someone else does. Highlighting the importance of evaluating composition director-by-director, activists have been more successful recently. As noted in a recent Sidley Austin memorandum, the probability of a campaign winning at least one seat has risen from 39% to 48%, suggesting that activists have become more adept at targeting directors whom they view as lacking the right future-focused skills – and swaying voters accordingly as they pit their nominee against the board’s weakest incumbent.
Against this backdrop, boards are increasingly choosing to settle early, rather than risk a targeted loss at the ballot box, with settlement rates peaking at 92% in the first half of 2025. Settlements may involve expanding the board to include one or more activist directors or replacing incumbent members through refreshment, though contests typically give activists only one additional seat. The high levels of settlement suggest that when forced to evaluate the potential weakness of a board versus the strength of an activist campaign, directors see their boards clearly.
The message from the experts we spoke with was clear: boards should actively manage their own composition before they lose the right to do so. Outsized attention and risk remains for nominating and governance committee members, chairs, and independent board leaders. Indeed, the number of Russell 3000 nominating and governance chairs receiving less than half of the vote rose 45% from 2024. While the primary focus of board composition discussions remains finding the right people who have demonstrated experience and expertise, we also expect growing focus on how directors augment their skills to become more effective. As one expert explained, with business complexity outpacing the speed at which boards can refresh, high-quality ongoing education is also necessary.
Activists were busy in 2025, with the number of campaigns jumping 23%, compared to 2024. Barclays found that a 60% majority of the 141 campaigns were at companies between $500M and $5B in market capitalization, but 22% of campaigns were at companies valued at more than $10B. No company is off limits. While the number of campaigns may dip modestly from the near historic highs this year, we expect activity levels to remain elevated – demanding sustained attention from boards and C-suites.
Board composition is far from the only topic of interest to activists—they’re interested in C-suite needs as well. Explicit demands for management change were much less common – occurring only 5% of the time – but this masks the reality that CEO departures both are caused by and may cause activist campaigns. A record 32 US CEOs resigned within a year of an activist campaign, an increase of 60% compared to the four-year average, reinforcing a widely held concern among executives that activist campaigns are referenda on CEO performance. At the other end of the timeline, 18% of US campaigns were initiated following a CEO resignation, highlighting the importance of proactive oversight of CEO performance and rigorous succession planning.
Although activist tools and tactics are becoming more sophisticated, it’s harder than ever to confidently predict activist activity. While the bulk of activist campaigns are driven by a handful of well-known firms, a growing universe of first-time and emerging activists – often more aggressive as they seek to establish a track record – adds to the unpredictability. Taken together, these dynamics mean that ignoring business or governance vulnerabilities until an activist emerges is no longer viable. Boards need thoughtful, clear-eyed vulnerability assessments so as to avoid unwanted and costly distractions, and to maximize the chances of success if a campaign materializes.
When we predicted an “emerging spotlight” on governance of AI in 2024, only 12% of S&P 500 companies identified AI as a material risk in their public disclosures; two years later, 72% do. While individual companies and directors are at different places in their AI learning and utilization journeys, 2025 saw a major shift in raising the level of awareness and conversancy in AI, and 2026 will see many more companies and boards look to leverage that learning while investors will look for proof of their success.
Risks and opportunities will vary widely from business to business, and an industry-specific review of both upsides and downsides is an important step for every board. In the energy sector, for example, one expert we spoke with described working with a board exploring AI systems to consolidate global operating data and surface safety incidents faster, moving toward real-time alerts. In consumer and services businesses, boards are reviewing generative tools for customer-facing channels where efficiency gains must be weighed against brand risk. As one asset manager said, “It’s not just on the balance sheet; it’s also reputational.”
Across industries, one very common topic of concern is how companies are thinking about AI impacts to workforce design. As we have previously written, investors are more frequently engaging on human capital issues. The potential for rapid efficiency gains, risk of reputational harm from workforce reductions, and longer-term concerns about creating a sustainable talent pipeline for the future make these ripe topics for disclosure and shareholder engagement.
AI is also directly affecting governance topics important to directors and executives, including:
These shifts suggest that boards are moving from AI awareness to accountability. In the coming year, directors will be expected not only to understand AI’s potential, but to demonstrate clear oversight structures, informed decision-making, and credible evidence that AI deployment aligns with strategy, values, and long-term value creation.
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