Here are three recent developments impacting ISS and Glass Lewis:
1. Florida Attorney General sues ISS and Glass Lewis – As noted in this article, the Florida Attorney General has sued ISS and Glass Lewis, alleging that both proxy advisors have violated Florida’s consumer protection and antitrust laws by deceiving investors. This lawsuit is similar to the one filed recently by the Texas Attorney General under Texas law.
2. Glass Lewis might register as an investment advisor – Per this Reuters article, Glass Lewis is mulling registering as an investment advisor, which would subject it to greater regulation from the SEC. Glass Lewis used to be registered as an investment advisor but deregistered twenty years ago. ISS has been registered as an investment advisor for the past 25 years.
3. Glass Lewis clarifies move away from a “House View” policy to four distinct sets – As I blogged about recently, Glass Lewis plans to transition from a single “house view” to providing four distinct sets of research and recommendations starting in 2027, with the goal to provide a broader perspective of views and to help investors customize their policies. To clarify its shift, Glass Lewis recently sent out an email that provided these hypos:
- A passive institutional investor or a hedge fund with a concentrated portfolio and a strong conviction toward stability and management’s operational capabilities would likely opt for the Management-aligned perspective and vote in support of the Board’s proposals unless egregious issues are present.
- A mid cap, U.S. asset manager that subscribes to corporate governance best practices but does not consider most environmental and social issues, including DEI, to be material will likely adopt a custom policy framework that aligns closely with the Governance Fundamentals research perspective and would therefore support proposals that reflect governance best practices but reject DEI and other E&S proposals unless egregious issues are present.
- A large cap, global asset manager that historically followed the Glass Lewis house policy will likely adopt a custom policy framework that aligns closely with the Active Owner research perspective and would therefore vote according to governance best practices including support for financially material environmental and social matters.
Authored by
Broc Romanek