Proxy advisor regulation heats up 

Congress, the SEC, business groups and individual states continue to try to curb the influence of proxy advisory firms, such as Institutional Shareholder Services (ISS) and Glass Lewis. Most recently:

• The Trump administration is considering an executive order that might include a broad ban on voting recommendations or a more limited prohibition on issuing recommendations with respect to companies that use the firms’ consulting services (see White House explores rules that would upend shareholder voting, WSJ reports ).
  
• The FTC launched an investigation into ISS and Glass Lewis for possibly violating antitrust laws through vote recommendations involving climate and ESG (see FTC probes ISS and Glass Lewis for potential antitrust violations - WSJ By Investing.com ).
  
• Florida investigated ISS and Glass Lewis for antitrust violations involving ESG and DEI in March and Texas announced it would investigate  ISS  and  Glass Lewis for potential violations of consumer protection laws by issuing voting recommendations that advance political agendas.
  
• Texas passed a  law  that would require proxy advisors providing voting advice regarding Texas companies to make detailed disclosures to shareholders and affected companies, and on the proxy advisors’ public website, when the proxy advisors’ advice: (1) isn’t based solely on shareholders’ financial interests (e.g., ESG and DEI), (2) is inconsistent with the board’s recommendations (even if based solely on shareholders’ financial interests) unless the proxy advisor provides a written economic analysis, or (3) is “materially different” from advice given to the company or to different clients on the same proposal. A judge temporarily blocked the law and set a February 2, 2026 trial date.

• Beginning in 2027, Glass Lewis will stop offering its standard benchmark proxy voting guidelines and begin transitioning clients to differentiated, client-specific voting frameworks reflecting the clients’ individual investment philosophies and stewardship priorities (see The end of Glass Lewis “benchmark” voting recommendations ).
  
• ISS has indicated it will maintain its benchmark policies but has announced new products for investors that don’t include voting recommendations. These products will allow institutional investors to leverage governance data from ISS STOXX (a provider of comprehensive and data-centric research and technology solutions) to inform their independent vote decisions.