(The Center Square) – A Congressional subcommittee discussed Tuesday how to oversee proxy advisory companies that tell investors how to vote in corporate elections.
U.S. Rep. Ann Wagner, R-Mo., led the House Financial Services Subcommittee on Capital Markets. The hearing was titled “Exposing the Proxy Advisory Cartel: How ISS & Glass Lewis Influence Markets.”
“This hearing is part of an ongoing effort by this subcommittee to shine a lot on how the proxy process is functioning and, in many ways, failing today’s markets,” she said in her opening remarks. “The purpose of this hearing is to examine the role, practices and market influence of proxy advisory firms on corporate governance, investor returns and broader market outcomes.”
Wagner noted that two firms – Glass Lewis and Institutional Shareholder Services – control 97% of the market for such services.
“That concentration alone would warrant scrutiny,” she said. “But more troubling is how their influence goes far beyond research; they now routinely dictate outcomes of shareholder votes. … These firms are not neutral observers, they are for-profit businesses that often sell consulting services to the very companies they evaluate – sometimes with clear conflicts of interest.”

U.S. Rep. Ann Wagner, R-Mo., leads the House Financial Services Subcommittee on Capital Markets on Tuesday, April 29, 2025.
Wagner said the effort had nothing to do with silencing shareholders, but was focused on ensuring the proxy process advances long-term investor value “rather than narrow political agendas.”
U.S. Rep. Brad Sherman, D-Calif., said the hearing was pointless.
“These firms have clients who pay them. Those are the investors, the capitalists who make our capitalism work,” he said. “The question is whether we are going to deprive them of the advice that they want and that they pay for. … And so we have before us bills that would require proxy advisory firms only provide advice on what maximizes profit and tell the eco-investors to go to hell.”
Sherman said Republicans want to deny liberal investors the right to get advice on how to invest in companies with safe labor practices and companies that protect the environment.
“They should be able to invest in mutual funds that seek to maximize profit or to maximize profits, but no fossil fuels,” he said.
Sherman said investors who put up the money should control how firms on Wall Street operate, not the managers who run the companies.
“How dare anyone who is just a mere owner of the company suggest a change in company policy, let alone demand a vote on it, let alone get advice on how to vote,” he said. “This is not a war on the proxy advisors, this is a war on the idea that the people’s whose money it is get to make the decisions.”
Sherman said investors should be able to select goals other than simply boosting profit, but also people who want to invest to help the planet.
The hearing comes a week after Jamie Dimon, CEO of JPMorgan Chase, called for Glass Lewis and Institutional Shareholder Services to be eliminated.
“They are incompetent,” Dimon said at a BlackRock retirement summit. “They should be gone and dead, done with.”
In March, Florida Attorney General James Uthmeier launched an investigation into Glass Lewis and Institutional Shareholder Services for “potential misrepresentations related to their Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) investing policies in violation of the Florida Deceptive and Unfair Trade Practices Act and possible unlawful collusion in adopting and enforcing these policies in violation of the Florida Antitrust Act of 1980.”
“We won’t allow ESG goals to handcuff Florida businesses and threaten Floridians investments,” Uthmeier said at the time. “If these proxy advisors use their overwhelming market power to advance partisan political agendas rather than maximizing shareholder value, we will hold them accountable.”
In Texas, state Sen. Bryan Hughes, a Republican, recently introduced a bill that would block ISS and Glass Lewis from making recommendations based on ESG or DEI considerations.
Glass Lewis is discussing ending its practice of making recommendations on proxy votes, Semafor reported Tuesday. The company could stop weighing in on ballot measures, Semafor reported, citing sources close to the matter. The move is partly in response to conservative backlash, they said.