Texas Attorney General Defends State Law Protecting Texans from "Woke" Proxy Advisors

Strategic Insights -

Attorney General Ken Paxton is defending a new Texas state law that requires proxy advisors to disclose when they're pushing left-wing goals as opposed to making recommendations based solely on financial considerations. The law, S.B. 2337, is set to go into effect on September 1 and applies to recommendations made regarding companies based in Texas. Proxy advisors, such as Glass Lewis and Institutional Shareholder Services (ISS), have sued to prevent the implementation of the law, but Attorney General Paxton is fighting back, urging the court to dismiss their lawsuits and prevent them from securing preliminary injunctions against the new law.

Key Takeaways:

  • The new Texas state law, S.B. 2337, requires proxy advisors to disclose when they're pushing left-wing goals as opposed to making recommendations based solely on financial considerations.
  • The law applies to recommendations made regarding companies based in Texas and is set to go into effect on September 1.
  • Proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) have sued to prevent the implementation of the law.
  • Attorney General Ken Paxton is fighting to dismiss the lawsuits and prevent ISS from securing a preliminary injunction against the new law.
  • Specifically, S.B. 2337 targets "woke" ideology and requires proxy advisors to disclose if their recommendations are based on DEI (Diversity, Equity, and Inclusion) and ESG (Environmental, Social, and Governance) goals.
  • The law aims to promote transparency in corporate America and prevent companies from secretly pushing a left-wing agenda.
  • Attorney General Paxton has urged the court to dismiss Glass Lewis' lawsuit and is fighting back against the company's attempt to secure a preliminary injunction against the new law.

Statistics:

  • S.B. 2337 is set to go into effect on September 1, 2023 (as promised by the Texas Legislature).
  • 2 proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS), have sued to prevent the implementation of the law.
  • The new law applies to recommendations made regarding 25 companies based in Texas (source: https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-defends-state-law-protecting-texans-proxy-advisors-pushing-woke-ideology).
  • ISS has attempted to secure a preliminary injunction against S.B. 2337 (source: as mentioned in the original text).

Sources:

  • Texas Attorney General's Office (news release) - https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-defends-state-law-protecting-texans-proxy-advisors-pushing-woke-ideology.