Glass Lewis Announces Changes to its Voting Recommendations Beginning in 2027
On October 14, 2025, Glass Lewis, a leading proxy advisor,1 announced that it will no longer make its “standard” benchmark voting recommendations broadly available to the market as of 2027. Instead, the company will provide a set of customized voting policy options to its institutional clients. Under this new model, Glass Lewis will offer multiple perspectives that reflect the views of its clients.
According to Glass Lewis, the decision was driven by the growing divergence between the approaches taken by US and European investors on matters such as fiduciary duties and sustainability. In a statement to Reuters, the firm also acknowledged that the move is, indirectly, a response to criticism from the US business community and Congressional leaders, noting that “the entire geopolitical environment is tied into this decision.”
In recent years, Glass Lewis and Institutional Shareholder Services (ISS) have received criticism on issues such as conflicts of interest in their business model, errors in their reports, and allegations of biases in their recommendations, as well as their recommendations related to executive compensation, diversity, equity and inclusion (DEI), and other ESG-related2 matters.
A recent example was the passage in the state of Texas of Senate Bill 2337, which imposes new regulatory requirements on proxy advisors. The law was scheduled to take effect on September 1, 2025. However, on August 29, the US District Court for the Western District of Texas issued an injunction suspending enforcement of the law as it applies to ISS and Glass Lewis. A final ruling is scheduled for February 2, 2026. If SB 2337 is upheld, advisory firms issuing recommendations for publicly traded companies headquartered in Texas will be subject to significant new disclosure and procedural requirements, which may impose relevant restrictions on their operating models.
It is also noteworthy that, earlier this year, while ISS and major institutional investors revised their voting policies during proxy season to align with US federal executive orders on diversity and inclusion, Glass Lewis chose to maintain its existing guidelines, which continue to include specific benchmarks on diversity in board composition.
Relevance for Brazilian Investors
Glass Lewis provides proxy advisory services to institutional investors in several countries, including Brazil. Although these discussions take place in the US context, the changes announced by Glass Lewis may directly affect Brazilian listed companies, since the firm has stated that the new guidelines will apply to all its clients.
Foreign institutional investors often follow the recommendations of Glass Lewis and ISS when voting at shareholder meetings of Brazilian public companies, particularly on matters of governance, compensation, and sustainability. Therefore, the changes in these firms’ policies may influence how international investors cast their votes in local meetings.
In Brazil, regulatory initiatives by the CVM and B3 have advanced governance and sustainability standards, fostering greater transparency and diversity in listed companies; for example, by including ESG metrics in reference forms, promoting female and minority participation on boards, and incorporating ESG metrics into executive compensation programs.
In this context, the changes by Glass Lewis, by making voting policies more flexible and customized, may, on the one hand, lead investors to cast votes more aligned with management positions. On the other hand, these changes may reduce predictability for companies regarding voting outcomes, making it more difficult to plan shareholder meetings in the absence of clear parameters on investor positions on matters to be decided. This scenario will require companies to improve the quality of disclosure materials and take a more proactive approach in engaging with institutional investors.
This article was prepared in collaboration with Mayer Brown LLP.
1 A consulting firm specializing in corporate governance and voting recommendations, widely used by large international funds to guide the exercise of their voting rights as shareholders of publicly held companies in Brazil and around the world.
2 “Environmental, Social and Governance,” used to refer to the assessment of risks and best practices related to environmental, social, and corporate governance matters.
