Decisions, whether to vote for or against various resolutions by shareholders at the annual general meetings, are increasingly being driven by what the proxy advisors recommend. Also, voting is largely done by the custod

Proxy Advisory Firms are independent research outfits that weigh all the pros and cons of any decision and thus provide research and voting recommendations for their clients. Proxy advisory firms put out detailed reports that advise shareholders on how they can safeguard their interests. They also provide independent voting recommendations. In return, they charge fees from institutional investors for their services. Some of the functions of proxy advisory firms are given below: The major task is proxy advisory i.e. advising on the intricate matters of the company. They aid shareholders in exercising their voting rights in the company in significant decisions like the appointment of the directors, changes in the policies of the company, etc. They provide a report that is basically a scorecard or rating on the corporate governance of the entity. They also conduct the Environmental, Social, and Governance (ESG) analysis. ESG analysis is done to study all the factors (environmental, social, and governance) of the company to calculate all the prospective growth opportunities and threats. It helps the company and shareholders to prepare accordingly. They monitor risks and protect the interests of the investors. They ensure participation of investors in corporate decision making.