Most Americans have never heard of ISS or Glass Lewis. But these two companies have spent years helping push woke politics into corporate America.
That’s why it’s great to see Congress making stopping these partisan institutions a top priority.
POLITICO recently reported that Congress is working on a bipartisan framework to crack down on the two firms, which quietly influence how major corporations are run and how trillions of dollars in retirement savings are voted.
The companies are called “proxy advisers,” but this wonky, technical-sounding label hides what they actually do.
In short, massive Wall Street giants own shares in thousands of companies, and whenever those companies hold shareholder votes, these giant investors often rely on ISS and Glass Lewis to tell them how to vote.
So, in essence, two obscure firms sitting behind the scenes are shaping the decisions at huge American companies.
According to the math of U.S. Republican Rep. Ann Wagner (MO-2), who chairs Congress’s Capital Markets Subcommittee, the two firms control about 97 percent of the proxy adviser market together, which is a problem because they routinely put partisanship over the interests of the investors and businesses they represent.
ISS and Glass Lewis push corporations toward politically fashionable activism instead of simply focusing on making money, creating jobs, and delivering returns for shareholders.
For example, they routinely recommend voting against company committee chairs when they don’t meet the various climate change benchmarks preferred by progressive policymakers, and, up until recently, heavily weighed racial, ethnic, and gender hiring considerations.
When push comes to shove, these companies are grifters. They sell “consulting” services to the very companies they rate and judge, creating what often feels like a blatant pay-to-play scheme where firms that hire them tend to get better scores and softer recommendations. At the same time, they keep moving the goalposts with ever-changing demands, ensuring corporations stay dependent on their advice and pay for constant compliance.
Little of their advice has anything to do with helping businesses grow, sell better products, or maximize returns. In fact, such ideology-driven policymaking often reduces value for shareholders, thereby reducing economic growth.
If wokeism is costing businesses money, then why is nearly every company in the country doing what ISS and Glass Lewis say?
Well, the truth is that if they do not fall in line with ISS and Glass Lewis’ approved priorities, they risk triggering negative vote recommendations from the two organizations, which could influence shareholder votes and corporate leadership decisions.
To make matters worse, both ISS and Glass Lewis are foreign-owned companies.
That’s right: while Washington has been busy warning about foreign influence in TikTok and other industries, foreign-controlled firms have been quietly helping shape the priorities of American corporations and influencing the retirement savings of millions of American workers.
Fortunately, the adults in the room in Congress are fighting back with legislation to — according to POLITICO — “bring clarity and consistency” back to the proxy adviser industry.
According to the news outlet, former U.S. Rep. Blaine Luetkemeyer’s American Consumer and Investor Institute deserves much of the credit for starting this bipartisan movement against ISS and Glass Lewis.
For years, many K Street trade groups and corporate organizations folded under pressure from activist politics. Instead of defending the businesses paying their bills, they often went right along with the ideological trends sweeping through corporate America. But Luetkemeyer’s ACII has taken a different approach. The group is standing up for businesses and their shareholders instead of the progressive proxy advisor mafia, challenging the broader activist corporate governance machine that has helped spread woke politics throughout American business.
Incredibly, that pressure is finally starting to work.
Over two dozen state attorneys general have launched investigations into ISS and Glass Lewis. President Trump recently directed the DOJ and FTC to examine whether these firms may pose antitrust concerns. And now, per POLITICO, Congress is stepping in as well.
Hopefully, this forthcoming framework will earn the full support and leadership of the House Financial Services Committee and the Senate Banking Committee.
Under the strong leadership of U.S. Republican Rep. French Hill (AR-2), Chairman of the House Financial Services Committee, and U.S. Republican Rep. Bryan Steil (WI-1), who chairs the key Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, the House is well-positioned to drive meaningful reform. So is the Senate, thanks to the courage of Sen. Tim Scott (R-SC), who chairs the Senate Banking Committee and has strong committee members like Sen. Bill Hagerty (R-TN) and Sen. Jim Banks (R-IN) standing by his side.
These members can also ensure strong oversight and coordination with SEC Chairman Paul Atkins, who regularly testifies before both committees on securities regulation and market structure. With these key leaders aligned, there is real momentum to finally rein in the proxy advisor duopoly and restore accountability to corporate governance.
American businesses exist to serve customers, workers, shareholders, and the economy. They don’t exist to be used as political pawns for activist agendas most Americans never voted for.
Businesses should focus on innovation, profits, growth, and jobs. Retirement funds should focus on helping Americans retire comfortably. And trade organizations claiming to represent businesses should actually fight for the interests of businesses instead of acting like a college progressive debate society.
For years, ordinary Americans watched major institutions drift further away from common sense while nobody in power seemed willing to push back.
At long last, that may finally be starting to change.
And not a moment too soon.
Dr. Brett M. Decker is the Endowed Chair of Leadership at Northwood University. He is a New York Times bestselling author, former Senior Vice President of Communications at Export-Import Bank of the United States, former Editorial Pager Writer for The Wall Street Journal, and former Senior Vice President, Foundation at Pentagon Federal Credit Union