Lawmakers hear competing views on proxy‑advisor disclosure bill

The Judiciary committee heard testimony on Senate Bill 375, the Proxy Advisor Transparency Act, which would require proxy advisors to disclose when a recommendation against company management is not based on a written financial analysis and to provide disclosures to clients and boards; the attorney general would be authorized to investigate and enforce through the consumer‑protection law.

Proponents said the bill is a narrow, nonpartisan consumer‑protection measure that improves transparency. Matthew Dumis (Fusion Law), representing Consumers Defense, said the bill only requires advisors-for‑pay to disclose whether their recommendation against management is based on a written financial analysis and that the measure is intended to inform fiduciaries and clients making voting decisions.

Opponents urged caution and narrower drafting. Noah Taber, general counsel for United Church Funds, said the bill's definitions could sweep in stewardship work by faith‑based investors and chill nonprofit engagement. Kathy Becker, Responsible Finance Campaign director at Green America, warned the bill singles out recommendations "against management," creating an asymmetry that a Texas court found constitutionally problematic; she urged a carve‑out for nonprofits and even application to both for and against recommendations to avoid First Amendment risks.

Committee members questioned whether the asymmetry (only requiring disclosure when advising against management) raises constitutional risk and whether nonprofits should be carved out. Proponents said clarifying that the bill applies only to compensated proxy advisory services and limiting the disclosure to whether there is a written financial analysis would narrow the scope.

The committee closed the hearing on SB 375 without action and adjourned for the day.