The Mississippi Secretary of State’s Office announced Thursday that its security division will investigate two of America’s largest proxy advisory firms for potentially neglecting their fiduciary duties.
As proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis help large investors like pension funds or mutual funds decide how to vote on corporate issues, such as board elections or environmental policies.
Large investors like these rely on proxy advisory firms for guidance since they often own stock in thousands of companies and are unable to research every corporate shareholder vote.
Secretary Michael Watson’s office says they will investigate whether ISS and Glass Lewis are steering votes for climate-related shareholders in a way that does not enhance or protect shareholder value in line with the firms’ legal obligation. A press release noted that the “promotion of environmental, social, and governance factors would be in direct violation of their fiduciary duty.”
“Accountability, and transparency have remained core functions of my public service tenure, and we must protect Mississippi investors from any companies who breach trust and fail to uphold stated goals of enhancing and protecting shareholder value,” Watson said. “In Mississippi, we will hold those accountable who willingly neglect their fiduciary responsibilities.”
Together, ISS and Glass Lewis hold an estimated market share of more than 90%, giving them significant influence on decisions that shape the U.S. and global economy. According to Watson, ISS alone serves more than 4,200 institutional clients and executes 14.1 million shareholder ballots.
