The Proof Is in the Proxy: Connecting Governance to Returns

Research continues to strengthen the case that governance quality and equity returns are closely connected. Studies from academia, index providers, and AllianceBernstein all indicate that companies with weaker governance structures have tended to lag better-governed peers over time. AB’s own proxy-voting analysis, covering roughly 12,000 shareholder meetings since 2019, found that firms where AB fully supported management outperformed those where it voted against management by several percentage points per year on average. This gap was evident in both absolute and risk-adjusted terms across most regions and sectors.

For advisors and investors, the findings position proxy voting as a powerful extension of fundamental research rather than a box-ticking exercise. Thoughtful votes—especially when paired with direct engagement—can both signal concerns about governance risk and potentially support better long-term outcomes for clients.