Show-Me State Times

Missouri Attorney General Andrew Bailey has initiated legal actions against two proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS). The move aims to ensure these companies comply with demands for information regarding their promotion of environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) agendas. Bailey accuses the firms of using their influence to push these agendas under the guise of impartial investment advice.

"Missourians deserve answers as to why the unseen power brokers, controlling much of corporate America, are pushing a leftist worldview at the expense of millions of honest investors," said Attorney General Bailey. "Glass Lewis and ISS have evaded scrutiny for too long. Missouri is using every tool under the law to force compliance."

Glass Lewis and ISS dominate over 97 percent of the U.S. proxy advisory market. They provide voting recommendations to institutional investors on various corporate matters including board elections and company policies. Their influence extends significantly as many large investment funds follow their recommendations automatically.

Both firms have been accused by Bailey's office of advancing ESG and DEI priorities that may conflict with shareholder value. These include proposals on race- and gender-based hiring quotas and climate activism policies. Previous attempts by state attorneys general to investigate these firms have faced noncompliance.

In response, Attorney General Bailey has launched a formal investigation under Missouri’s Merchandising Practices Act (§ 407.020, RSMo) alongside filing lawsuits in Cole County Circuit Court to enforce cooperation with Civil Investigative Demands (CIDs).

The legal actions are part of broader efforts by Bailey's office to protect consumers from what they see as politicized investing practices. "We are going after the source," concluded Attorney General Bailey. "These proxy advisors have held corporate America hostage with their radical ideologies."