Ernst & Young buys Proxy Governance assets

Global firm sets up governance team for market “in flux”

Ernst & Young, the global accounting and advisory services firm, has bought some of the remnants of Proxy Governance Inc. (PGI), the US proxy firm that withdrew from the market at the end of last year.
On the back of the acquisition, E&Y says it will set up its own corporate governance team – to advise companies.
The firm said the deal gives it a “corporate governance team, a research application, and a comprehensive database”. The deal closed in February but has only just been announced.
“These additions, which were completed in time for the 2011 proxy season, give Ernst & Young a unique ability to examine the governance and shareholder engagement needs facing boards and senior executives,” the firm said in a statement. Financial terms of the deal were not disclosed.
In December, rival proxy firm Glass, Lewis & Co. said it would take over PGI’s voting and advisory contracts. PGI was part of former SEC Commissioner Steven Wallman’s financial services and technology firm FOLIOfn.E&Y said the PGI deal gives it the “unique ability” to examine the governance and shareholder engagement needs facing boards and senior executives amid a corporate governance environment both globally and in the US that is “in flux”.
“More than ever, boards need to be aware of shareholder perspectives and meaningfully engage with them,” said Tom McGrath, E&Y’s Senior Vice Chair of Markets.
Its newly formed Corporate Governance Group includes unnamed members of the former PGI team and has already worked with clients on issues like executive pay, board composition, social and environmental shareholder proposals and institutional voting. E&Y will provide “pragmatic insights” to clients about the issues of interest to shareholders.
In a parting message on its website, PGI says its mission had been to bring “much needed” competition and innovation to the market. In June 2010 it had floated the idea of transforming itself into a non-profit entity called the Proxy Governance Institute, citing problems with the for-profit business model.