Texas’ New Proxy Advisor Law Regulates Speech, Not Securities

Texas’ high-profile fight with proxy advisory firms is often described as another skirmish in the ESG wars. That framing misses the point and obscures the real governance risk now facing Texas-incorporated and Texas-based public companies.

The US District Court for the Western District of Texas is considering a challenge to a recent Texas statute regulating proxy advisory firms. Senate Bill 2337, passed in 2025 and codified in the Texas Business Organizations Code (Chapter 6A), requires firms that advise institutional investors how to vote their shares to make state-mandated disclosures.

In particular, the disclosures should come when recommendations diverge ...