Shareholder-Advisory Firms Take Opposing Views on Racial Audits

Two of the leading shareholder-advisory firms are on opposing sides of a new investor proposal: racial audits.

Shareholder resolutions filed with Amazon.com Inc., Johnson & Johnson and some of the biggest U.S. banks request that the companies undergo independent racial audits to see if, and how, their business models cause, reinforce or perpetuate racial discrimination. Glass, Lewis & Co. recommends shareholders vote in favor of most of the proposals when they gather at annual meetings in coming weeks; Institutional Shareholder Services advises voting against.

Glass Lewis and ISS clients include managers of the largest pension plans and investment funds, ...