Institutional Shareholder Services (ISS), a proxy advisory firm that provides voting recommendations to institutional investors, sued to block an Oklahoma law requiring proxy advisors to provide additional financial analysis when recommending votes against company management.
ISS filed the lawsuit against Oklahoma Attorney General Gentner Drummond (R) over HB 4429, which Gov. Kevin Stitt (R) signed in May. The law is scheduled to take effect Nov. 1. ISS is seeking a preliminary injunction to prevent the state from enforcing it.
HB 4429 requires proxy advisors recommending a vote against company management to provide written financial analysis supporting the recommendation. ISS argues the requirement violates the First Amendment by imposing requirements based on the viewpoint expressed in its voting advice. The firm also argues the law would increase compliance costs.
ISS said in its filing, "HB 4429 singles out proxy advisors for special regulation; the law does not apply to other speakers who also advise on votes, including company boards, shareholders, those who solicit proxy votes and charities."
The Oklahoma attorney general's office, which would enforce the law under the state's Consumer Protection Act, denied ISS's allegations in an initial court filing.
The Oklahoma lawsuit is the latest in a series of cases in which ISS and fellow proxy advisory firm Glass Lewis have sued states over laws regulating their voting recommendations. Federal judges have temporarily blocked similar laws in Texas, Kansas, and Indiana while litigation continues.
The Oklahoma law — like the Kansas and Indiana laws — imposes additional requirements when a proxy advisor recommends voting against company management. In June, federal judges blocked the Kansas and Indiana laws on First Amendment grounds. In the Kansas case, U.S. District Court Judge Holly Teeter wrote that the law "regulates speech based on whether the expressed opinion is for or against company management."
More than a dozen states considered legislation regulating proxy advisory firms in 2026, making the court challenges relevant beyond Oklahoma. ISS and Glass Lewis together account for more than 90% of the proxy advisory market and provide voting recommendations to institutional investors on issues including director elections, executive compensation, and shareholder proposals.
Oklahoma House Speaker Kyle Hilbert (R) authored HB 4429, and Stitt signed it in May 2026. The legislation is similar to model legislation promoted by Consumers Defense, a nonprofit organization that opposes ESG investing.
The legal challenges began in Texas, where ISS and Glass Lewis sued in July 2025 over a state law regulating proxy advice involving environmental, social, and governance (ESG) and other nonfinancial considerations. A U.S. district court judge temporarily blocked parts of the Texas law in August 2025.
Kansas and Indiana enacted similar proxy advisor disclosure laws in 2026. Federal judges temporarily blocked both laws in June, finding that the firms were likely to succeed on their First Amendment claims.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.
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