Proxy Power: How ISS and Glass Lewis Quietly Took Control of Corporate America

In a world dominated by billion-dollar funds and corporate titans, two firms with no capital of their own became kingmakers: ISS and Glass Lewis. These proxy advisors don't manage money, but they shape how trillions are voted—impacting board elections, CEO pay, mergers, ESG resolutions, and more.

ISS began in 1985 as a scrappy research firm helping pension funds make sense of increasingly complex shareholder votes. Glass Lewis entered the scene in 2003, positioning itself as an agile counterweight with a stronger activist and governance-driven bent. By the late 2000s, they had a near-duopoly on proxy guidance.

And then, the stakes rose.

As passive investing ballooned—led by BlackRock, Vanguard, and State Street—these firms outsourced much of their proxy voting logic to ISS and Glass Lewis. With index funds on autopilot, ISS and Glass Lewis became the “governance stack”—pushing reforms, flagging misaligned incentives, and, increasingly, championing ESG.

But not everyone cheered.

Critics, including Bill Gurley and Senator Bill Hagerty, argue these firms operate with too little oversight. With ~97% combined market share, they act as unregulated regulators—driven not always by shareholder value but by opaque agendas. Both firms are now majority foreign-owned. Both operate behind closed doors. And their influence has grown so large that some founders now opt for dual-class shares just to avoid their influence.

As Gurley put it: “If you’re a board member, fiduciary duty means shareholder interests come first. That’s not what ISS and Glass Lewis always reflect anymore.”

And so, in the age of AI, open data, and platform shifts, maybe it’s time to reimagine governance. A new proxy advisor—perhaps AI-powered, mission-driven, and open-source—isn’t just a startup idea. It might be a civic necessity.

Because in the championship team of capitalism, we shouldn’t care where the player comes from. We just need the best ones on the court.