Boards Enjoy Increased Investor Support as Markets Deliver and DEI Pressure Fades

According to Diligent Market Intelligence (DMI) Voting data, average support for director elections at U.S.-based companies during the 2024-2025 proxy season was 94.2%, up from 93.7% on the previous year, and 93.4% in the 2022-2023 season.

For companies in the Russell 3000, average support for director elections in the 2024-2025 season was 95%, up from 94.7% the previous year, and 94.3% in 2022-2023 season. In the S&P 500, support averaged at 96.3% this season, up from 96% the previous year, and 95.6% in the 2022-2023 season.

“It’s not surprising to see director votes increase. Companies deserve credit for doing a better job,” said John Wilson, executive director of corporate engagement for Calvert Research and Management.

Big Three backing

The record wave of support was also evident at the Big Three.

At the S&P 500, BlackRock backed 98.72% of director reelection proposals, up from 98.55% the previous season. The world’s largest asset manager also recorded increased support for directors at Russell 3000 companies to reach 95.07%. Vanguard saw director support in the S&P 500 reach 99.3%.

Out of all three, State Street saw the biggest jump in backing with S&P 500 director support reaching 95.35%, up from 92.68 the previous season while recording a similar jump in the Russell 3000.

Almost all major asset managers had reviewed or modified their diversity policies in the months that followed the January release of the Trump administration’s executive order to curtail DEI programs at the federal and private level.

BlackRock made changes to the use of DEI terminology in its 2024 annual report, removing mention of its “three pillar DEI strategy.” State Street removed a target of 30% female board members at key indices and wording that suggested it would vote against S&P 500 or FTSE 100 boards without at least one ethnic or racial minority director. Vanguard removed a line from its policy which had previously stated that as well as having diversity of tenure and skills, boards should also, at a minimum, “represent diversity of personal characteristics, inclusive of at least diversity in gender, race and ethnicity.”

Yet even before such policy shifts, the momentum behind board diversity had already begun to slow. DMI Governance data show that the share of newly appointed women directors fell from 37% in 2022 to 32% in 2024, declining further to 26% in the first half of 2025.

For some investors, this retreat in DEI expectations has reduced the incentive to cast protest votes. “Investors will look at whether it is as worthwhile to vote against a director because of a DEI policy, compared to some of the other good attributes that the company and the director might have,” Steve Balet, formerly of FGS Advisors, told DMI. “I think there’s been a more balanced and thoughtful weighing of those decisions in this market than we’ve had in the past.”

However, many boards had already been working to build stronger board composition long before the DEI reset, according to Wilson. “They’ve become more diverse and more independent, so it’s not surprising to me that director support has increased. You have to give companies credit for genuinely doing better here.”

Policies around environmental and social issues – once a common trigger for votes against directors – are now also being approached with more nuance.

Balet added that investors who may previously have voted against directors they disagreed with over a company’s policy around environmental or social issues, are also now taking a different approach.

“Governance-related standards remain largely unchanged, but E&S-related voting decisions are much more flexible now,” he said. “Previously, institutions often felt that voting against directors was the right response. Now they’re reevaluating whether those protest votes actually add value for their own investors.”

Rewarding performance

As well as lifting company valuations, rising markets have also given investors greater confidence in the incumbent boards steering them. With the Russell 3000 delivering nearly 24% total shareholder return in 2024 and the S&P 500 seeing returns of 25%, shareholders appear more willing to reward directors who oversaw that growth.

“The expectation that director votes should correlate with company performance is actually more normal than what we’ve seen in some past upward-trending markets. This is more aligned with what you’d expect in a strong market,” noted Balet.

But performance isn’t the only driver. Issuers are also seen to have noted the growing importance of ongoing, substantive engagement to ensure concerns are heard and addressed. “Dialogue between companies and shareholders has become more routine and constructive. Companies now have systems and teams dedicated to engagement, and they tend to welcome conversations, especially when investors bring real expertise,” said Wilson.

Managing the message in uncertain times

Still, the path ahead is far from straightforward. The sweeping regulatory changes seen in 2025 have reshaped the engagement landscape, and lingering market uncertainty is forcing boards to rethink how and with whom they communicate.

“One challenge is knowing who to communicate with. Algorithmic traders and index funds are less open to engagement, while the share of active institutional investors is shrinking,” said Balet. “Boards may struggle to get their messages out to shareholders.”

That challenge extends to both ends of the investor base: crafting communication that resonates with retail investors while finding a way to address engagement barriers on the institutional side.

“The landscape has become more complex and navigating it requires deeper engagement between shareholders and companies,” said Wilson. “This work can’t be done on autopilot anymore, and the demand for thoughtful, expertise-driven dialogue continues to grow.”

* N-PX data featured in this article is based on DMI’s 90% threshold view. Methodology focuses on the shares actually voted and excludes shares on loan.