Proxy Advisers - how are they selected?

I want to leave the question of whether or not the cost of employing proxy advisory firms can be justified for another day. But more importantly I would like to raise this point: on what substantive basis are investment institutions selecting a proxy firm. Surely it cannot be on price alone and must be somewhat related to the policies and rules a specific firm applies before it makes its recommendations. So hopefully there are major and detectable differences in the yardsticks each proxy firm applies - if not, why are there different firms, and can their different governance policies stand up to scrutiny? Which leads to the question: how do the investment firms justify the choice of a proxy advisory firm?
(29 May 2014)