Proxy advisory firms have arisen due to market failures underlying voting and the broader system of corporate governance. However, proxy advisory firms, which are not subject to mandatory regulation, reflect market failures of their own. This analysis highlights the underlying frictions, such as the scale economies and public goods aspects to information production, the import of incentive conflicts faced by the advisory firms, the power of the proxy advisory firms, and the implications of the recommendations of the advisory firms and votes by different types of investors. Asset managers who emphasize stewardship are more supportive of management than are the proxy advisory firms. This paper also highlights the limitations of one-size-fits-all recommendations.