Staff Reports
The quiet men and women who say how big companies should vote have finally been dragged into the light. Nebraska Attorney General Michael Hilgers and a coalition of state attorneys general are suing Institutional Shareholder Services (ISS), accusing the proxy advisory giant of pushing climate and DEI agendas while pretending to be neutral. This fight is about your 401(k>, your town pension, and who gets to decide what “good corporate governance” really means.
The Nebraska lawsuit: what it says about ISS and proxy advisory firms
The suit says ISS, which along with Glass Lewis controls roughly 97 percent of the proxy-advice market, pushed political positions on climate and diversity without telling the investors whose money they were voting. Nebraska and at least 17 other states claim ISS coordinated with activist groups and even sold consulting services to the companies it rated — a classic conflict of interest. Internal emails quoted in the complaint show staff worried their data “probably isn’t accurate.” That’s not a typo. It’s a smoking gun.
Why this matters to your retirement and corporate governance
Most Americans don’t know proxy advisory firms exist, but they decide how giant funds vote your retirement money all the time. If a foreign-owned firm is quietly telling pension funds to oust board members over politics, that can affect stock prices, dividends, and jobs. The complaint even points to ISS urging caution on reelecting Warren Buffett despite Berkshire Hathaway’s strong returns — and no analysis of the financial impact. That should worry anyone who cares about stable returns over political fashion shows.
Foreign ownership, secret politics, and conflicts of interest
ISS is majority-owned by Deutsche Börse. That matters because the complaint frames these firms as foreign-owned players shaping American corporate policy, often with activist groups whispering in their ear. Add alleged side deals — consulting to companies they rate — and you’ve got a “health inspector selling cleaning services” problem. If true, it’s not just bad policy; it’s bad business and bad for investors.
Hold them to account: let markets decide, not activists
Good corporate governance should protect shareholders and workers, not push a political agenda. The states are right to demand transparency and to stop firms from acting like unelected overlords over American boardrooms. With President Trump’s executive order pushing regulators to look at proxy advisors, this battle won’t be settled quietly. If the states win, it won’t just be a win for Nebraska— it will be a win for anyone tired of having their retirement turned into a voting block for someone else’s causes. Time to put Americans, not activists or foreign-owned firms, back in the driver’s seat.
