JP Morgan (JPM.US) has ended all partnerships with external consultants and is instead using its own AI platform for decision-making.

According to a report on Wednesday, citing the content of an internal memo, JPMorgan's asset management department has immediately cut off all contact with all proxy advisory companies. The upcoming proxy season usually starts in March and lasts until June, until companies hold their annual shareholder meetings. During this period, the bank will begin using an internal artificial intelligence-driven platform called "Proxy IQ" to assist in handling voting matters for U.S. companies. Proxy advisory firms, such as Glass Lewis and Institutional Shareholder Services (ISS), play the roles of "voting brain" and "governance gatekeepers" in the capital markets. Their core function is to provide independent research and voting recommendations on agenda items at listed company shareholder meetings for large institutional investors such as mutual funds, pension funds, and insurance companies. Their recommendations can influence the results of board elections, executive compensation decisions, and environmental or social resolutions. The two companies mentioned above have long been criticized. Critics, mostly corporate executives, accuse these two companies of having too much influence with their recommendations. However, institutional investors widely seek their guidance. Spokespersons for JPMorgan, Glass Lewis, and ISS did not immediately respond to requests for comment. Conservatives and some business leaders have criticized proxy advisors and large fund management companies for often advising against board decisions or directors and focusing too much on climate and social issues. In December of last year, U.S. President Donald Trump signed an executive order aimed at strengthening regulation of the proxy advisory industry, citing that large companies often "advance and prioritize radical political agendas." Glass Lewis and Institutional Shareholder Services (ISS) have repeatedly denied these accusations.