The US Securities and Exchange Commission's (SEC) Division of Corporation Finance has granted permission to Goldman Sachs to introduce a retail shareholder voting instruction programme, extending a governance model first approved for ExxonMobil in 2025 which creates potential risks for investors.

For shareholders, the main risk is that a convenient opt-in mechanism can become a durable pro-management default. Instructions may remain in place as circumstances change, investors may overlook annual reminders or meeting-specific materials, and votes may be cast with the board on contentious issues unless shareholders actively intervene.

These developments leave investors wondering: what happens if they become a routine feature of the US proxy landscape?

From Exxon precedent to emerging practice

Goldman Sachs' request relied heavily on the ExxonMobil precedent. The company described ExxonMobil's 2025 no-action letter as "an important advancement for retail investors" and proposed a substantially similar framework. The second green light from the SEC to introduce a retail voting programme may well encourage other companies to follow suit, whereas previously ExxonMobil’s case could have been viewed as a one-off.

Under the programme, retail shareholders may opt into standing voting instructions that apply across future shareholder meetings. Investors can instruct that their shares be voted in line with board recommendations, either on all matters or on all matters except contested director elections and major corporate transactions. Participants retain the ability to opt out or override those instructions for any individual meeting, but they need to actively do so.

The SEC's response to Goldman Sachs closely matched the conditions underpinning the ExxonMobil relief. Staff highlighted representations concerning continued delivery of proxy materials, annual reminders, straightforward opt-out rights, protections against employer pressure and public disclosure of the programme.

Goldman Sachs adds an employee dimension

While Goldman Sachs' proposal largely mirrors the ExxonMobil model, it contains a feature with potentially greater governance significance.

Goldman Sachs intends to promote participation among current employees, former partners and alumni who own shares in the company. According to its submission, current employees and partner alumni collectively held more than 7.6% of outstanding shares as of the record date for its most recent annual meeting.

The programme would allow current employees to enrol through internal Goldman Sachs systems alongside ordinary enrolment channels. The company argued that employee investors represent a distinct category of shareholder because of their familiarity with the company and pointed to SEC precedent recognising differences between employee shareholders and other investors.

The SEC's response paid particular attention to this aspect of the proposal. Staff specifically referenced Goldman Sachs’ representations that participation would not be linked to employment status, compensation or career progression and that measures would be implemented to prevent misuse of enrolment information.

That emphasis highlights a governance question largely absent from discussions surrounding ordinary retail participation. In most shareholder voting initiatives, the central concern is whether investors are sufficiently engaged. Here, the issue is whether a programme directed at shareholders with ongoing or historic connections to the company could reinforce support for management in a way that deserves closer scrutiny.

Although the safeguards described in the SEC correspondence are intended to address the risks of potential involuntary participation, concerns remain over whether a standing voting programme aimed at a shareholder base that includes employees and former partners alters the practical balance of influence in closely watched governance votes.

Participation versus power

Goldman Sachs presents the programme as a solution to low levels of retail voting participation. The company argues that standing instructions allow investors who trust management's judgement to ensure their shares are voted without repeatedly completing proxy forms, while preserving the freedom to vote independently whenever they choose.

Yet standing voting instructions are not neutral in their effects. For enrolled shareholders, the default position is alignment with board recommendations unless they take affirmative action to intervene. That may have little practical significance for routine resolutions, but becomes more relevant when votes concern director elections, executive remuneration, governance reforms sponsored by shareholders or strategic transactions where boards have a direct interest in the outcome.

As a result, the critical issue is not simply the number of shareholders who participate, but how participation is structured and whose interests are likely to benefit from the resulting voting behaviour.

What comes next?

The Goldman Sachs decision marks an important step in the evolution of standing retail voting instruction programmes. A single no-action letter can be treated as an exception. A second approval begins to look more like a precedent.

For stewardship teams, the key regulatory question is becoming less important than the governance one. As more issuers consider similar arrangements, scrutiny is likely to focus on adoption rates, the categories of shareholders most likely to enrol and the extent to which standing instructions influence outcomes when boards have a direct stake in the result.

Goldman Sachs approval does not end the debate that ExxonMobil started. It does, however, suggest that the discussion has moved beyond permissibility and towards consequences. The next phase will be defined not by whether these programmes can exist, but by how they affect the distribution of voting power across public companies.