DOJ Changes Guidance on Corporate Proxy Advisers
DOJ Changes Guidance on Corporate Proxy Advisers
Updated at: August 8, 2026 at 04:00 AM
Department of Justice (DOJ) recently rescinded a 1987 letter that granted antitrust 'safe harbor' protection to Institutional Shareholder Services (ISS).
This 1987 guidance suggested the DOJ would not pursue antitrust action against the firm, provided it focused strictly on shareholder voting rights.
However, the DOJ now argues that the landscape has evolved drastically.
Today, ISS and Glass Lewis dominate over 90% of the proxy advisory market, and many firms now offer consulting services to corporations while simultaneously advising shareholders on how to vote—a model the DOJ considers a conflict of interest.
This regulatory move follows a 2025 executive order demanding closer scrutiny of proxy firms, which critics accuse of prioritizing ideological agendas like ESG over investor returns.
While the withdrawal of the 1987 letter is not a formal lawsuit, it ends a period of legal security, leaving the industry vulnerable to future antitrust investigations.
In response, major financial institutions like JPMorgan and Wells Fargo are increasingly opting to handle their voting processes internally to reduce dependence on these powerful advisory firms.
