The World’s Biggest Banks Just Fired the Proxy Voting Industry

Two of America’s largest banks—Wells Fargo and JPMorgan Chase—are quietly making one of the biggest governance pivots in years: bringing proxy voting back in‑house. Wells Fargo has cut ties with ISS and built an internal proxy‑voting service, and JPMorgan is centralizing voting decisions under custom, internally controlled frameworks instead of relying on advisory templates. For public fiduciaries, this isn’t a routine operational update. It’s a signal that proxy voting—long treated as an administrative task—is now a front‑burner fiduciary risk and reputational flashpoint.

The timing is critical. With ballots going out in March, the question in every treasury office and pension boardroom should be: What does this mean for us, and how quickly do we need to move?

Wells Fargo’s move away from ISS marks one of the clearest institutional acknowledgments that advisory defaults can create misalignment with fiduciary objectives. By building its own proxy‑voting infrastructure and relying on custom guidelines, the bank reduced its dependence on a third‑party framework whose recommendations have become politically contentious.

JPMorgan Chase is making similar shifts. It has strengthened internal ownership of its voting processes and increased reliance on customized frameworks tailored to materiality, not politics. These changes parallel another trend we’ve documented: JPMorgan and Wells Fargo were two of the three most significant large banks to withdraw from climate‑activist alliances—a notable course correction toward governance neutrality.

These developments amount to a major vindication for red‑state financial officers aligned with the State Financial Officers Foundation (SFOF). For years, these officials led the national push to challenge the oversized influence of proxy advisory firms, issuing open letters and engaging directly with the firms—engagement in which our team has been active since the very beginning.

And yet, for all this progress, the moment is raising the stakes for public fiduciaries.

Proxy voting is about to be under extreme scrutiny. Media outlets are already tracking how public funds vote on ESG, DEI, and climate proposals. If a state treasurer or pension board has loudly criticized ESG or DEI in public statements, but reporters find records showing votes in favor of those proposals, the reputational fallout could be immediate and severe.

Fiduciaries who act before proxy season begins in March can seize a rare opportunity. The wins are substantial:

• You audit the system.
• You uncover misalignment.
• You correct the problem before it hits the press.
• You protect beneficiaries and ensure that votes reflect fiduciary duty.

Our forthcoming “Clexit” research shows JPMorgan Chase and Wells Fargo as top performers among large U.S. banks in withdrawing from climate‑activist alliances. This does not mean their public communications are fully depoliticized.

Our engagement with JPMorgan has been constructive and often candid. They have provided significant clarification around coal‑related activities, enhanced‑review categories, and other items that matter most to red‑state fiduciaries. Governance posture is visibly trending toward viewpoint neutrality.

However, JPMorgan’s public‑facing website still maintains a substantial amount of legacy ESG‑themed content. From a reputational standpoint, the governance shift is ahead of the communications shift. This discrepancy matters.

Wells Fargo’s decision to build its own internal proxy‑voting team is one of the strongest market signals that large institutions can, and increasingly must, own their voting frameworks. This was bound to happen.

The Proxy‑Advisor Shifts Were Real, But Not Enough

Responsiveness Has Been Slow for Years

We have been engaging ISS and Glass Lewis personnel since 2019. Despite years of input, the proxy‑advisor duopoly only began making significant changes after the Trump Administration’s December 2025 Executive Order, Texas’s anti‑ESG framework, and state attorney‑general investigations.

What Actually Changed

• ISS shifted several major environmental and social proposal categories (including climate‑disclosure proposals) to case‑by‑case evaluation.
• The services used that flexibility to somewhat decrease support for ESG and DEI somewhat.
• ISS halted its U.S. policy of considering board gender/racial/ethnicity quotas.
• Last year, ISS began offering Bowyer Research guidelines, the only anti-ESG system, as an option.
• Glass Lewis began offering them this season.

But almost all of this happened after severe pollical pressure was brought to bear on them. So, the question is, is this the end of the proxy advisory services?

What might really disrupt the system:

• The political onslaught against ISS and Glass Lewis is intense and growing. The Trump administration’s Executive Order on this topic was not the end. It instructs several government entities to launch serious investigations and policy changes which can make life very difficult for proxy advisory services.
• States are also ramping up, not just legislatively but also in regulation and law. All of this disruption causes opportunities for innovation.
• Various market-based innovations, not new proxy advisory services, but alternatives to that business model, are in the pipeline.
• At some point, if political leaders want to see reform, they will have to move beyond an exclusive focus on what’s wrong with the current system and toward clear rules for what could replace it.

What Public Funds Should Do Now

• Intentionally focus attention on this issue rather than continue to acquiesce to facile assurances from staff and unaligned consultants. Elected officials and the board members they appoint are not children to be patted on the head and told ‘there there, it’s all taken care of’. They are both legally and politically accountable. They work for the people, and in our system, the people are the boss.
• Review your investment policy statements and RFPs for any services related to proxy voting including proxy advisory services, asset managers and consultants. Make sure that your documents require what you actually want. You’re the customer.
• Audit 2024–2025 votes. Get ready for a shock. But don’t panic. You can turn this around.
• Adopt voting guidelines that actually reflect your views, which in the case of most red-state fiduciaries, will mean voting against pro-ESG and pro-DEI measures, whether they come from shareholder activists or activists in the board room. Vote for proposals to roll back the non-fiduciary commitments of the past.
• Get the messaging out ahead of time and control the narrative. Proxy voting just went from chore to risk. Now is the time to turn it from risk to reward.

With banks moving to internal control over proxy voting—and advisory firms making partial course corrections—this proxy season presents a rare chance to align voting with fiduciary duty before it becomes a headline risk. But you do not have much time. Careers will be made and careers will be lost based on how those responsible for public assets respond to the wave of attention being directed at proxy voting.