Press Releases

Today, the House Financial Services Committee is holding a Capital Markets Subcommittee hearing, led by Subcommittee Chair Ann Wagner (MO-02), to examine the role and influence of proxy advisor firms, particularly Institutional Shareholder Services (ISS) and Glass Lewis, in shaping corporate governance and shareholder voting outcomes.

Read Subcommittee Chair Wagner’s opening remarks as prepared for delivery:

"Good afternoon. I want to thank our witnesses and all those in attendance for joining us for today’s hearing on a critical yet underexamined issue in our capital markets: the outsized influence and unchecked power of proxy advisory firms—particularly Institutional Shareholder Services (ISS) and Glass Lewis.

"This hearing is part of an ongoing effort by this Subcommittee to shine a light on how the proxy process is functioning, and in many ways,  failing, today’s markets.

"The purpose of this hearing is to examine the role, practices, and market influence of proxy advisory firms on corporate governance practices, investor returns, and broader market outcomes. We will also use today’s hearing to assess transparency, accountability, potential conflicts of interest, and the overall impact of proxy advisory firms on the functioning and fairness of capital markets.

"Two firms—ISS and Glass Lewis—control 97 percent of the proxy advisory market. That concentration alone would warrant scrutiny.

"But more troubling is how their influence goes far beyond research—they now routinely dictate outcomes of shareholder votes. When ISS or Glass Lewis recommends voting against a director, their clients are over 30 percent more likely to follow suit than non-clients.

"Their platforms even prepopulate voting recommendations, contributing to what has become known as “robo-voting”—a troubling abdication of fiduciary responsibility.

"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.

"ISS, for instance, simultaneously rates and advises companies on its own ESG metrics. Last year, after ExxonMobil sought judicial relief from an activist campaign that included Glass Lewis as a member, Glass Lewis then recommended that its clients vote against one of ExxonMobil’s own directors.

"Let’s be clear: this is not about silencing shareholders. It's about ensuring the proxy process advances long-term investor value—not narrow political agendas. We’ve seen a surge in shareholder proposals that are ideological in nature but marginal in economic relevance.

"Costs associated with responding to these proposals—both direct and indirect—are climbing into the hundreds of millions of dollars annually and ultimately fall on ordinary investors.

"The SEC must reassert its role in ensuring this system is fair, transparent, and accountable.

"That is why, last month, Chairman Hill and I sent a letter to then-Acting Chairman Uyeda commending the Commission for rescinding Staff Legal Bulletin No. 14L—but also urging the SEC to go further by restoring the original intent of Rule 14a-8, eliminating the significant policy exception, and enhancing oversight of proxy advisory firms.

"These reforms are critical to safeguarding retail investors, refocusing the proxy process on long-term value creation, and restoring trust in our capital markets.

"Our capital markets work best when participants are guided by economic rationale, not political pressure. I look forward to a robust and thoughtful discussion today on how we can bring greater accountability to proxy advisors and strengthen the integrity of the shareholder voting process."