Proxy Advisors Face New Antitrust Scrutiny—What Companies Need to Know

The Justice Department has withdrawn a 1987 Business Review Letter issued to Institutional Shareholder Services (ISS), signaling increased antitrust scrutiny of the proxy advisory industry. The move does not establish that ISS or other proxy advisors violated antitrust law, but it could affect how public companies, institutional investors, and boards approach proxy voting and corporate governance matters.

What Changed

On August 5, 2026, the DOJ's Antitrust Division withdrew a Business Review Letter it issued to ISS in 1987. The original letter stated that the Division did not then intend to challenge ISS's proposed proxy advisory activities under the antitrust laws. DOJ now says the letter no longer reflects ISS's current business practices or the Division's view of those practices.

Why the DOJ Is Taking Another Look

DOJ pointed to changes in ISS's business model, including its expansion into corporate consulting services. It also highlighted market concentration, stating that ISS and Glass Lewis together control more than 90% of the proxy advisory market.

Why This Matters for Public Companies

Proxy advisors can play an influential role in shareholder voting on director elections, executive compensation, governance proposals, and other corporate matters. Increased government scrutiny could affect how proxy advisors develop recommendations, interact with companies, and operate during future proxy seasons.

What Boards Should Consider Now

The DOJ's action does not create new compliance requirements for public companies. Boards and legal teams should nevertheless monitor developments involving proxy advisors, document independent governance decisions, and maintain direct communication with significant shareholders rather than relying exclusively on proxy advisory recommendations.

Prepare Early for Contested Votes

Companies facing significant shareholder proposals, director elections, or other contested matters may benefit from reviewing proxy advisor policies early and communicating directly with institutional investors about the company's position.

What to Watch Next

The withdrawal itself is not an enforcement action, but it signals that the DOJ is paying closer attention to competition in the proxy advisory industry. Public companies should monitor potential investigations, regulatory developments, litigation, and changes to ISS and Glass Lewis policies as future proxy seasons approach.

How SJKP Can Help

SJKP's corporate attorneys can assist public companies, boards, and investors with corporate governance, shareholder matters, securities compliance, and proxy-related issues. Companies facing significant shareholder votes or changing regulatory requirements can work with counsel to evaluate governance risks and prepare an appropriate strategy.