Subcommittee Ranking Member Nadler’s Opening Statement at Hearing on Proxy Advisors
Washington, D.C. (June 25, 2025)—Today, Rep. Jerrold Nadler, Ranking Member of the Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, delivered opening remarks at a hearing on Republicans’ demonization of responsible shareholders they disagree with.
Below are Ranking Member Nadler’s remarks, as prepared for delivery, at today’s hearing.
WATCH Subcommittee Ranking Member Nadler’s opening statement.
Ranking Member Jerrold Nadler
Subcommittee on the Administrative State, Regulatory Reform, and Antitrust
Hearing on “The Proxy Advisor Duopoly’s Anticompetitive Conduct”
June 25, 2025
Thank you, Mr. Chairman, and thank you to our witnesses for being here today.
Yet again, our Republican colleagues are pushing baseless allegations of antitrust violations at the expense of American consumers. Today’s hearing alleges collusion between the two largest proxy advisors—consulting firms that provide analysis and recommendations to institutional investors, such as pension funds and employee benefit plans, on how to vote their shares at company shareholder meetings.
The Republicans’ theory? That these two companies, Institutional Shareholder Services, or ISS, and Glass Lewis, work together to push ideological goals over financial return.
They allege that these proxy advisors advance socially liberal policies at the expense of their investors, their customers’ return on investment, and their own businesses.
But, like so many of the flawed antitrust theories the Republicans have brought before this committee, it simply does not hold water.
Proxy advisors are a vital tool for investors. While deep-pocketed companies or clients can bring assessments of proxy materials in-house, retail investors and mutual funds rely on expert independent advice from large proxy firms like ISS and Glass Lewis.
Proxy advisors inform their customers about the hundreds—and sometimes thousands—of complex proposals they may be called upon to consider, helping them to fully exercise their rights as shareholders of publicly traded companies. They do this by providing independent assessments of company proxy materials and shareholder proposals.
Anyone in the financial services industry understands the value of trusted information. Customers pay ISS and Glass Lewis, and sometimes both companies, or even a third service, for independent assessments of company proxy materials and shareholder proposals. To be clear, no one is forcing these customers to pay for their services. And no investor is bound by their subscription to ISS or Glass Lewis to follow their recommendations.
The fact that companies generally do follow their advice is a reflection of the hard work proxy advisors do to ensure that their recommendations are in line with the goals and values of their clients. They do not leverage their market power over their clients’ independent determinations. If their customers do not like their information or their advice, they can stop subscribing to ISS or Glass Lewis at any time. And we should remember that it is the investor, not the proxy advisor, that casts the ultimate vote at shareholder meetings.
Proxy advisors can be particularly beneficial to pension funds by allowing them to maximize returns for their beneficiaries by reallocating resources that would otherwise go to analyzing the vast quantity of shareholder proposals they face.
Take New York, for example. As of 2018, it was the third largest public pension plan in the nation and held $207.4 billion in assets. These assets are overseen by the New York State Comptroller's office and are held on behalf of more than one million members of the New York State and Local Retirement Systems (NYSLRS). The Comptroller’s office, like its counterparts in other states, takes advantage of proxy advisory services to be better informed about the companies in which they have invested public employees’ funds.
The Majority’s baseless attacks on the proxy advisor market may force New York’s and other pension funds to expend unnecessary resources conducting their own shareholder analyses, which could undermine their ability to deliver strong returns for their beneficiaries.
Once again, the Majority has invented a flawed antitrust theory to justify its attacks on an industry it does not like. Although the vast majority of investor proposals are uncontroversial—such as uncontested board elections or the approval of company-nominated slates of directors—there are a tiny fraction of initiatives concerning social governance that the Majority labels “DEI” or proposals that quite reasonably consider the risks of climate change in making responsible investment decisions.
In each case, proxy advisors conduct an independent analysis and offer their best advice to their clients, who are free to make their own independent judgment on how to vote. But Republicans do not like some of the recommendations that these two proxy advisors have made and therefore, as has become commonplace in this committee, they have launched another unfounded antitrust investigation designed purely to intimidate and harass their opponents.
Last Congress, the Republicans launched a fatally flawed antitrust investigation targeting investment groups that consider environmental, social, and governance, or ESG, strategies. Now the Majority is following the same playbook and arguing that ISS and Glass Lewis are conspiring to advance pro-ESG and pro-DEI recommendations, despite a lack of evidence. This fact-free investigation is all part of the Republicans’ larger goal of entrenching corporate interests and conservative political preferences.
The Republicans’ focus on alleged collusion between ISS and Glass Lewis not only furthers their culture-war campaign, but it also allows them to target and dilute shareholder rights that would otherwise threaten the interests of their corporate allies.
The Majority alleges collusion between ISS and Glass Lewis because they often issue similar recommendations. But this reflects incredibly shallow analysis. If you go to multiple doctors and they each diagnose you with cancer, that is not evidence of collusion. In this case, a fair and impartial analysis of market conditions and best practices are yielding similar conclusions. There is nothing nefarious about it.
Proxy advisory firms empower shareholders to exercise their own judgment and expertise. The market is working as it should—yet Republicans are trying to meddle in it for their own political purposes.
I urge my colleagues to end this fishing expedition and to focus on the real issues our constituents face. I look forward to hearing from the witnesses, and I yield back.