Glass Lewis Defends Proxy Advice as GOP Probes Concerns (1)

Glass Lewis CEO Bob Mann on Tuesday said the proxy adviser works in its clients’ best interests, without an ideological agenda, dismissing the latest round of Republican scrutiny over its shareholder voting guidance.

Mann’s remarks came in a letter to Senate Banking Committee Chairman Tim Scott of South Carolina and other Republican senators. The lawmakers asked Glass, Lewis & Co. and fellow proxy adviser Institutional Shareholder Services Inc. in May to explain how they develop recommendations, avoid conflicts of interest, and apply voting policies, raising concerns the firms improperly influence how companies are run.

Republicans and companies long have said Glass Lewis and ISS have too much power over annual meeting votes on board directors; environmental, social, and governance proposals; and other matters. Glass Lewis and ISS are the main providers of voting advice to pension funds and other big investors, which pay for the firms’ services.

“These criticisms are often exaggerated, unsupported by evidence, or rely on highly selective and distorted readings of our policies and other statements,” Mann said in his letter.

A Senate Banking Committee spokesperson told Bloomberg Law on Wednesday the panel is reviewing the letter.

It wasn’t immediately clear whether ISS also replied to Scott and other Republican senators. Scott, as well as Sens. Mike Rounds of South Dakota and Bill Hagerty of Tennessee, asked ISS and Glass Lewis to respond to their questions by Tuesday.

“ISS is cooperating with the Senate Banking Committee’s inquiry,” a spokesperson for the firm told Bloomberg Law on Wednesday.

The senators’ scrutiny of ISS and Glass Lewis comes as a business group is fighting in court to save curbs on proxy firm operations imposed in the first Trump administration.

A federal judge in 2024 tossed 2020 proxy firm rules that ISS sued to scrap. The Securities and Exchange Commission regulations had anti-fraud and public filing requirements that placed proxy firms in a regulatory regime for activist investors and company managers looking to sway the results of annual meeting votes.

The National Association of Manufacturers appealed the decision to the US Court of Appeals for the District of Columbia Circuit. The court questioned the logic of the proxy firm limits in May amid its review of the group’s appeal.

The DC Circuit is expected to reach a decision in the case in the coming months.