Meredith recently noted on the Proxy Season Blog that, following the enactment of the Texas law last year that imposes regulations on proxy advisory firms, other states have enacted their own “copycat” laws, and those laws are now being challenged with lawsuits. The blog notes that Glass Lewis recently announced that it has commenced litigation against Indiana, while ISS filed a lawsuit against Kansas challenging its copycat law. These laws are scheduled to take effect July 1, 2026. Bloomberg Law reports:

The state laws also ignore a crucial fact, ISS said in its complaints against Kansas and Indiana: Many issues that come up at annual meetings don’t lend themselves to financial analyses, such as whether to reelect a board member who has missed too many meetings.

Glass Lewis cited a similar concern in its litigation: “There is no obvious way to assign a dollar figure to a vote for one director over another, a vote to ratify or reject a particular auditor, or a vote for or against a nonbinding shareholder proposal,” according to its Indiana complaint.

The two firms said they aren’t only concerned about a compliance hassle—though Glass Lewis said the burden would likely be overwhelming. They’re concerned about what compliance actually means.

Terms of the state laws are too vague, ISS and Glass Lewis both said.

Note that only members of the TheCorporateCounsel.net can access the Proxy Season Blog. If you are not a member, email info@ccrcorp.com to sign up today or call us at 800.737.1271.

– Dave Lynn