Institutional Shareholder Services (ISS) and Glass Lewis filed lawsuits in April 2026 challenging state laws in Indiana and Kansas that require the proxy advisory firms to disclose when their voting recommendations differ from management’s recommendations on shareholder votes.

ISS sued Kansas on April 29 in the U.S. District Court for the District of Kansas. Glass Lewis sued Indiana on April 30 in the U.S. District Court for the Southern District of Indiana, and ISS filed a separate lawsuit against Indiana on April 13. Both states' laws take effect July 1, 2026.

The lawsuits allege the laws violate the First Amendment because they compel speech in certain situations, illegally regulate interstate commerce, and impose unconstitutionally vague provisions. The firms said the laws require them to provide disclosures to shareholders and on websites when their advice differs from management recommendations and is not supported by written financial analysis.

Glass Lewis and ISS account for a combined market share of more than 90% of the proxy advisory industry, according to a September 2025 Congressional Research Service report. At least a dozen states had legislation regulating proxy advisory firms as of February 2026, according to Bloomberg Law.

Glass Lewis stated Indiana's law represents "a fundamental misunderstanding of the nature of corporate governance issues and how proxy guidance informs investor decision-making." The firm also wrote that the law "creates friction for investors that rely on our insights to fulfill their fiduciary duties."

ISS wrote in its Kansas suit that "it is hard to imagine a more plainly viewpoint-discriminatory law" and that "the law's goal is to force ISS to walk the line that corporate executives want — even if ISS and its clients believe that course of action is wrong."

Indiana lawmakers said the law would “ensure proxy advisors prioritize their fiduciary duty by providing clear justifications for their recommendations.”

The lawsuits expand a legal strategy the firms launched in July 2025 over a similar Texas law, SB833. That lawsuit is pending. That law required disclosure when proxy advice is based on non-financial factors like diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG). In 2023, Kansas Attorney General Kris Kobach (R) said, "These proxy advisory companies and their ESG driven agenda threaten the hard-earned pensions of generations of Kansas workers. ... Those pension funds must be invested to maximize their return, not to advance any particular political agenda."

President Donald Trump (R) issued an executive order on Dec. 11, 2025, directing the Securities and Exchange Commission to expand oversight of Glass Lewis and ISS. The order instructs the SEC to revisit and potentially rescind rules for proxy advisors that implicate DEI and ESG policies.

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.