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 regulatory changes to increase competition and end what he described as conflicts of interest. “Unlike our foreign owned competitors, Egan Jones proxy services is owned and operated in the United States,” Egan said, and he told the committee that ISS’s voting platform restricts access for competing advisers and withholds necessary data such as voting deadlines. Egan summarized remedies as the “four P’s”: platforms (make them neutral), purse (ban firms from serving two masters by offering consulting and advisory services), policies (expand access to alternative methodologies), and practices (end robo‑voting).

Professor Caleb Griffin of the University of North Carolina School of Law described the industry’s risks in academic terms: concentration, weak competition, and conflicts of interest. He said the two largest firms control roughly 90% of the market and that research shows favorable recommendations from ISS or Glass Lewis measurably increase shareholder support for proposals. Griffin noted the absence of direct fiduciary duties from proxy advisers to ultimate investors and likened the conflict created when an adviser sells consulting to a company while issuing recommendations that affect that company’s ballot items to earlier regulatory fixes in other industries.

Charles Crane, managing vice president of policy at the National Association of Manufacturers, told the committee manufacturers perceive pressure to purchase consulting services after receiving negative recommendations. “When companies get a negative vote recommendation they’ll immediately get a solicitation from the consulting service side of the business,” Crane testified, and he urged Congress to adopt statutory guardrails such as the draft bill from Chairman Fitzgerald.

Nell Minow, chair of ValueEdge Advisors and a former ISS executive, disputed allegations of collusion or exclusionary practices. When asked whether there is evidence that ISS and Glass Lewis collude, Minow answered plainly: “There is none.” She also noted proxy advisers support management recommendations the vast majority of the time and cautioned against government intervention that would constrain market solutions and shareholder access to independent research.

Members pressed witnesses on several factual claims cited in the hearing. Committee members and witnesses variously cited: a combined market share figure for ISS and Glass Lewis between about 90% and 97%; claims that the duopoly can influence roughly one‑third of votes on a given proposal; and a frequently cited asset total under management of institutional investors measured in the trillions (witnesses referenced figures such as $20 trillion). Witnesses also pointed to examples where proxy recommendations helped pass shareholder proposals (for example, a 2022 New York City pension fund proposal concerning Starbucks and a McDonald’s civil‑rights audit proposal).

Not all panelists agreed on remedies or diagnoses. Democratic members including Ranking Member Nadler and Representative Raskin said the record shows no evidence of antitrust collusion and cautioned that aggressive Committee action could chill shareholder speech or increase costs for public pension funds that rely on proxy‑advice services. Republicans emphasized ownership (ISS’s ownership ties to Deutsche Börse were mentioned), market concentration, and the potential for platform gatekeeping to limit new entrants.

No formal votes or regulatory actions were taken at the hearing. Several members asked the Department of Justice and the Federal Trade Commission to study the industry; witnesses and members also referenced SEC rulemaking history, including a 2020 SEC rule to increase proxy adviser transparency that has been subject to litigation and later revisions.

The hearing record will remain open for five legislative days for additional submissions, and members signaled they expect further briefing from the SEC, DOJ and FTC and potential legislative follow‑up.

Sources and quotes in this article are from testimony and exchanges at the House Judiciary Antitrust Subcommittee hearing on proxy advisers. Witnesses who testified include Sean Egan (Egan Jones), Professor Caleb Griffin (University of North Carolina School of Law), Charles Crane (National Association of Manufacturers), and Nell Minow (ValueEdge Advisors). Committee participants included Chairman Fitzgerald and members who identified themselves as ranking members and committee leaders during the hearing.