A proxy firm (also a proxy advisor, proxy adviser, proxy voting agency, vote service provider or shareholder voting research provider) provides services to shareholders (in most cases an institutional investor of some type) to vote their shares at shareholder meetings of, usually, quoted companies.
The typical services provided include agenda translation, provision of vote management software, voting policy development, company research, and vote administration including vote execution. According to their websites, not all firms provide voting recommendations and those that do may simply execute client voting instructions.
The votes executed are called "Proxy Votes" because the shareholder usually does not attend the meeting and instead sends instructions - a proxy appointment - for a third party, usually the chairman of the meeting to vote shares in accordance with the instructions given on the voting card.
Firms in the industry include:
- Glass, Lewis & Co (USA)
- Institutional Shareholder Services (USA) 
- Institutional Investor Advisory Services India Limited (IiAS) (IN)
In 2013, the US Securities and Exchange Commission fined ISS $300,000 for revealing non-public information in respect of clients proxy votes
Conflicts of interest
A potential conflict of interest identified by the Government Accountability Office is that some owners of proxy firms do business with both issuers and investors. Analysis of executive remuneration, or executive pay, is a notable feature of the work of shareholder voting research. Some policymakers believe that increasing competition in the industry may improve service quality. For example, in 2010 a Securities & Exchange Commission consultation document asked whether certain issues in the proxy advisory industry, including conflicts of interest, are affected by limited competition.
Code of conduct
Following a number of regulatory reviews by securities regulators, including the Canadian Securities Administrators and the European Securities and Markets Authority (ESMA) a number of firms have published a Code of Conduct: the Best Practice Principles for Shareholder Voting Research. The Code was developed with an independent chairman, Dr Dirk Zetsche, Propter Homines Chair for Banking and Securities law at the Institute for Financial Services of the University of Liechtenstein and Director of the Center for Business & Corporate Law at Heinrich Heine University in Duesseldorf/Germany.
- Part of Egan-Jones Ratings Company,Harris, Roy (2007-05-30). "Proxy Firms Fire Back at Critics". CFO.com.
- J. de la Merced, Michael. "Vestar to Buy I.S.S., an Influential Shareholder Adviser". New York Times. Retrieved 14 June 2014.
- Alistair Barr & Jonathan Burton (2007-06-11). "Controversy ignites competition among proxy firms". Marketwatch.
- Dent, George W. (2014-01-01). "A Defense of Proxy Advisors". Rochester, NY: Social Science Research Network. SSRN 2451240. Cite journal requires
- "SEC.gov | SEC Charges Institutional Shareholder Services in Breach of Clients' Confidential Proxy Voting Information". www.sec.gov. Retrieved 2016-10-17.
- "The influence of proxy advisory firms on executive remuneration". Guerdon Associates. 2007-01-10.
- Zac Bissonnette (2008-01-15). "Proxy firm questions Tyson chief's pay".
- "Proxy Plumbing Concept Release" (PDF).
- "Canadian Securities Administrators Publish Guidance for Proxy Advisory Firms".
- "ESMA LIBRARY". www.esma.europa.eu. Retrieved 2016-10-17.
- "Best Practice Principles for Shareholder Voting Research". 2014.
- "Best Practice Principles for Proxy Advisors and Chairman's Report". corpgov.law.harvard.edu. Retrieved 2016-10-17.