Missouri Proxy Advisors 101
Missouri deserves to know if proxy advisors are using state investment funds to push Left-wing politics.
WHAT IS A PROXY ADVISOR?
Big institutional investors (like state pension funds) own shares in thousands of companies. They have a fiduciary duty to vote those shares in the financial interest of their beneficiaries.
The problem is simple. There are too many votes and not enough time to research every ballot item. Many institutions hire proxy advisor firms that sell recommendations or even cast votes on their behalf.
In the United States, two firms dominate this market: Institutional Shareholder Services and Glass Lewis. Their combined market share is over 90%.
They market themselves as helping investors to increase long-term value. In practice, they often blend in social and political agendas that are not tied to financial performance.
That was the basis for an investigation launched by Attorney General Andrew Bailey. The AG’s office is examining whether these firms misled investors about whether their advice was grounded in shareholder value or ideology.
REAL VOTES
This is not a theoretical problem. Proxy advisors have a history of voting their clients’ shares against the best interests of the company.
The firms:
- – Urged Boeing to report on whether its lobbying aligns with net zero goals, even though those goals call for flight taxes and bans on short flights.
- – Pushed Walmart to pay for an independent racial equity audit designed with input from activist groups, without tying the expense to shareholder value.
The problem is that proxy advisors represent their services as value-maximizing while often omitting a written financial analysis.
Investors and taxpayers deserve to know whether a recommendation is backed by a real analysis of costs, benefits, and expected impact on value, and they should be able to access that analysis when it exists.
TEXAS
In 2025, Texas lawmakers decided to take a closer look at proxy advisors and how much influence they really have over corporate decisions. After learning that these firms sometimes promote ideological agendas while claiming to act in the financial interest of investors, the Texas Legislature passed Senate Bill 2337, known as the Proxy Advisor Transparency Act. Governor Greg Abbott signed it into law this summer.
The idea behind the law is simple. If a proxy advisor makes a voting recommendation that is not based on financial analysis, it has to say so, clearly. That disclosure must go to the investors who pay for the service and to the company whose stock is being voted on. If a recommendation is based on financial analysis, the firm has to share that analysis with clients upon request and with the company’s board of directors.
WHAT’S NEXT FOR MISSOURI
This legislative session, the Missouri legislature must pass a Proxy Advisor Transparency Act. Proxy advisors should have to disclose when a recommendation is not made in the financial interest of shareholders, especially when it is driven by Left-wing environmental or social goals, DEI objectives, or social credit and sustainability scores.
Missouri already took the first step by opening an investigation into proxy advisors. Now let’s finish the job with simple, factual disclosures and real accountability so that every vote tied to Missouri pensions and investments reflects financial duty, not hidden politics.
Transparency is not partisan. If a proxy advisor wants to steer votes for non-financial reasons, fine. Just say it out loud, show the analysis when you claim there is one, and let Missourians decide for themselves.
Andy Bakker
Executive Director
Liberty Alliance USA