Major proxy advisory firm Glass Lewis & Co LLC has announced a significant shift in its corporate governance services. Beginning in 2027, the company will discontinue its long-standing “benchmark” voting recommendations, replacing them with a more personalized, AI-driven advisory framework. The move comes amid intensifying scrutiny from U.S. lawmakers and growing divergence between global investors over environmental, social, and governance (ESG) priorities.

A Strategic Shift in Proxy Advisory Services

According to a company spokesperson, the decision reflects the “changing geopolitical and regulatory landscape” that has reshaped how institutional investors approach fiduciary duties and sustainability concerns. Glass Lewis stated in a position paper that investors in the United States and Europe are increasingly divided over issues such as climate policy, corporate governance, and shareholder activism.

The firm’s new model will leverage artificial intelligence (AI) to help clients design customized voting frameworks aligned with their own governance principles. This technology-driven approach aims to replace the traditional one-size-fits-all benchmark model with tailored guidance based on factors like sustainability priorities, management alignment, or governance focus.

“We are moving away from a generic advisory structure toward a client-centric model that supports a diversity of investor values,” the company’s spokesperson said.

Political Pressure and Regulatory Challenges

Glass Lewis and its primary competitor, Institutional Shareholder Services (ISS), have been under increasing pressure from U.S. Republican politicians and state officials critical of their perceived influence on corporate decision-making. In Texas, both firms are being investigated by the state’s Republican Attorney General for alleged violations of consumer-protection laws. The inquiries focus on whether proxy advisers failed to disclose key facts about their ESG-related advice.

While both firms deny any wrongdoing, they have also won preliminary injunctions to block a Texas law that would have required them to declare that their ESG recommendations are not solely aimed at maximizing shareholder value. The legal and political scrutiny highlights the ongoing culture war over ESG investing, which has become a flashpoint in U.S. corporate governance debates.

The Rise of Customizable ESG Strategies

In its announcement, Glass Lewis emphasized that it will continue to support a broad range of investor perspectives. The firm’s new platform will enable clients to choose between voting research that prioritizes management positions, governance best practices, or sustainability objectives. By providing this flexibility, Glass Lewis aims to help investors navigate complex shareholder resolutions more effectively.

Meanwhile, ISS has confirmed that it will maintain its benchmark policy, although it recently introduced a range of new research products that do not include voting recommendations. This diversification allows investors to access independent governance analysis without relying on prescriptive voting guidance.

Industry Impact and the Future of Proxy Voting

Industry experts believe Glass Lewis’s strategic pivot could reshape the proxy advisory industry. According to Aaron Bertinetti, CEO of Investor Engagement, North America at Computershare, this change will likely disperse proxy voting influence across a wider spectrum of investors.

“Previously, companies could easily identify key investors to engage with,” Bertinetti noted. “Now, that influence is being fragmented, making it much harder to track and predict voting outcomes.”

This shift could also drive companies to invest more heavily in shareholder engagement strategies, as the blocs of votes traditionally guided by proxy firms become more fragmented. As a result, corporate governance and investor relations teams may need to adopt more data-driven approaches to understand investor sentiment.

A Turning Point for Corporate Governance

The elimination of benchmark voting recommendations by Glass Lewis marks a pivotal moment in the evolution of corporate governance and ESG advisory services. The firm’s adoption of AI-driven customization signals a broader industry trend toward personalized investment strategies that reflect diverse stakeholder priorities rather than standardized templates.

With regulatory scrutiny mounting and investor preferences shifting, both Glass Lewis and ISS are navigating a complex environment that demands greater transparency, flexibility, and innovation.