Board oversight of AI is emerging as the defining theme of the 2026 proxy season, reflecting how quickly the technology has moved from an operational tool to a core governance priority. According to Glass Lewis, ‘AI governance and related disclosures will likely be top of mind for issuers and investors’ as companies face growing pressure to demonstrate effective oversight, risk management and transparency. The findings form part of Glass Lewis’ 2026 Proxy Season Preview: Notes on North America report, which sees boards increasingly expected to strengthen governance frameworks, expand director expertise and provide clearer disclosure around how AI risks are managed.
This focus on AI sits within a broader shift in governance expectations, where investors are demanding more rigorous oversight across evolving risk areas. Companies are likely to formalize board-level responsibility for AI and invest in director education or recruitment to ensure sufficient expertise. The expectation is not only better governance structures but also more detailed disclosure, signaling to shareholders that boards are actively engaged with both the opportunities and risks associated with AI adoption.
Another governance issue gaining traction is reincorporation. While still limited in volume, proposals have increased in recent years, driven in part by legal developments and state-level competition for corporate registrations. Glass Lewis notes that 29 such proposals were reviewed in 2025, up from 17 in 2024. Activity has continued into 2026, with companies weighing jurisdictional benefits against long-term shareholder interests. This trend is expected to remain under close scrutiny as investors assess whether such moves enhance or weaken shareholder protections.
Diversity disclosure remains a complex and evolving area, particularly in the US. Regulatory and legal developments have led many companies to scale back diversity-related disclosures and initiatives, while investors recalibrate their expectations. Despite a decline in some disclosures, diversity reporting remains widespread and companies must balance litigation risk with ongoing shareholder demand for transparency. In Canada, by contrast, disclosure requirements remain more stable and companies are expected to continue providing demographic information aligned with investor expectations.
Executive compensation trends also reflect a changing environment. One notable development is the anticipated increase in the use of upward discretion in pay decisions, particularly in response to external shocks such as tariffs. Companies are expected to justify these decisions with clear rationale and safeguards, including caps on payouts and detailed explanations of how outcomes align with performance. Where disclosure is insufficient or outcomes appear misaligned with shareholder experience, scrutiny is likely to intensify.
At the same time, the use of ESG metrics in incentive plans is declining. Among S&P 500 companies, adoption fell from 72 percent in 2024 to 68 percent in 2025, with a sharper drop expected in 2026. Diversity-related metrics have seen the most significant reduction, falling from 73 percent of companies using such metrics in 2024 to around 30 percent in 2025. While some companies will retain ESG measures, they are likely to provide more quantitative justification to demonstrate their materiality.
CEO succession planning and retention continue to be a key focus, particularly as high-profile leadership transitions highlight the importance of board preparedness. Investors are paying close attention to the structure and rationale of related compensation packages, especially ‘make-whole’ awards. Companies are expected to demonstrate that such awards are appropriate and aligned with forfeited incentives.
On the shareholder engagement front, changes to the SEC’s approach to no-action requests are reshaping the proposal landscape. The decision not to respond to such requests in 2026 has introduced uncertainty, with some companies excluding proposals on technical or substantive grounds and some investors pursuing legal challenges. At the same time, restrictions on exempt solicitations for smaller shareholders may limit the ability to organize vote-no campaigns, potentially altering the dynamics of shareholder activism.
In Canada, environmental disclosure is under increasing scrutiny due to new greenwashing rules. Companies face significant penalties for misleading environmental claims, prompting a need for stronger governance and substantiation of disclosures. While some critics warn of a chilling effect, the overall direction points toward more rigorous and credible climate-related reporting.
Aaron Wendt, Glass Lewis’ senior director of research, features in our latest Governance Playbook – Proxy design: Beyond compliance, written in association with The Nuvo Group. The report explores how modern proxy statements have evolved from compliance documents into strategic shareholder communications
As these trends converge, boards and investors alike face a central question: are current governance frameworks evolving quickly enough to keep pace with the risks and expectations shaping the 2026 proxy season?