House Antitrust Subcommittee Hears Competing Views on Proxy‑Advisor 'Duopoly' and Conflicts of Interest

The House Judiciary Antitrust Subcommittee heard bipartisan testimony on the influence of proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis, with witnesses and members debating whether the firms’ market concentration and bundled consulting services create conflicts of interest and anticompetitive conduct.

Chairman Fitzgerald opened the hearing by calling ISS and Glass Lewis a “foreign owned proxy advisor duopoly,” saying their recommendations can “erase millions of dollars in market capitalization overnight” and arguing that conflicts created when firms offer consulting alongside voting recommendations amount to “a coerced pay to play system.” He said he has introduced the Stopping Proxy Advisors Racketeering Act to bar proxy advisers from offering consulting services tied to the matters on which they issue voting recommendations.

Why it matters: Proxy advisers provide voting recommendations used by many institutional investors. Witnesses and members disputed how often those recommendations diverge from management, whether they reflect investor preferences, and whether the firms’ market share gives them outsized, unchecked influence over corporate governance. Republicans on the panel emphasized market concentration and foreign ownership; Democrats warned that the record does not show collusion and cautioned against chilling shareholder information and speech.

Sean Egan, cofounder and managing director of Egan Jones, urged legislative and…