I would venture that most Americans have never heard of Institutional Shareholder Services (ISS) or Glass Lewis. That is not an accident. These two firms have spent years shaping how trillions of dollars in shareholder votes get cast while staying out of the spotlight, and yet if you have a 401(k), a pension, or own a mutual fund, there is a good chance your investments have been influenced by recommendations you never approved and likely never saw.
For decades, I fought in Congress to protect Main Street investors. I never expected one of the biggest blind spots in that system to be run, in large part, by firms that are not even American-owned.
ISS and Glass Lewis describe themselves as neutral referees. The evidence emerging from courtrooms across the country tells a different story, and it is worth calling these firms what that evidence increasingly suggests: grifters who built a lucrative business on the backs of investors who have no idea they are paying for it.
My home state of Missouri and the state of Florida were among the first to act, opening investigations and filing suit against both firms last year, before Texas, Nebraska, Iowa, and West Virginia followed with their own suits alleging the firms deceptively marketed their recommendations as objective while letting ideology drive the advice.
The Nebraska complaint includes an internal ISS communication worth reading twice. Discussing how a recommendation would appear to outsiders, a senior analyst wrote: “I would prefer not to look like we are following the agenda of a proponent just because they brought the proposal. I would rather frame it as something we agree would be good for shareholders.” ISS has denied the allegations and says its recommendations are based on the proxy voting policies its clients have selected. What that analyst was worried about was not whether the recommendation was sound, but whether it looked independent.
They should be worried. In addition to issuing vote recommendations, ISS and Glass Lewis sell consulting services to many of the same companies they are supposed to evaluate “objectively.” Nebraska’s lawsuit compares their business model to a health inspector selling cleaning services on the side. They are essentially con men disguised as neutral analysts.
Elon Musk found this out when Tesla shareholders weighed in on his compensation package and both firms urged investors to reject it. In response, Musk called ISS and Glass Lewis “corporate terrorists” who “have no freaking clue.” Tesla shareholders agreed and 75 percent voted to approve the package.
Earlier this year, ExxonMobil decided to relocate its corporate headquarters to Texas and both firms opposed the move. Exxon’s SEC filing states plainly that Glass Lewis “failed to disclose an obvious conflict of interest” stemming from its own litigation against the Texas Attorney General over a law regulating proxy advisors. Shareholders were not fooled; 71 percent voted for the move and against ISS and Glass Lewis.
Congress has not been silent. Rep. Bryan Steil (R., Wis.) has introduced legislation to rein in the duopoly and require the disclosure and accountability that should have existed from the start. Sen. Bill Hagerty (R., Tenn.) has been a vocal critical of proxy advisors referring to their business model as a “racket.”
The FTC has opened an antitrust investigation, the House Judiciary Committee has launched its own inquiry, and four state attorneys general have filed coordinated lawsuits. President Donald Trump issued an executive order in December naming both firms directly, SEC Chairman Paul Atkins has signaled plans to revisit the rules that allowed this system to take root, and JPMorgan Asset Management has cut ties with both firms entirely.
ISS and Glass Lewis control roughly 97 percent of the proxy advisory market. Public companies face extensive SEC disclosure requirements, and investment advisors face strict fiduciary standards. The two firms deciding whether boards get elected and major corporate decisions succeed face almost none of that same oversight, and almost no consequence when they get it wrong. The people who pay for that are retirees, teachers, and small investors whose 401(k)s and pensions are steered by recommendations they never asked for, and it is their returns that suffer when ideology drives the advice instead of financial merit.
Congress has both the authority and the obligation to fix this by giving the SEC clear statutory power to regulate proxy advisory firms the way it already regulates everyone else in this system, with real disclosure, real accountability for errors, and conflict-of-interest rules with actual teeth. The executive order pointed in the right direction, and the lawsuits are building the record. Permanent legislation is what is missing.
Right now, this system serves ISS, Glass Lewis, and the activists who depend on them. It does not serve the millions of Americans whose retirement security depends on well-run, well-governed companies. That needs to change.
Blaine Luetkemeyer is CEO of the American Consumer and Investor Institute. He represented Missouri’s 3rd Congressional District from 2009 to 2025 and served as chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.
