While Institutional Shareholder Services Inc. (ISS) stated that it intends to maintain its benchmark guidelines, it has also recently expanded its product offerings for investors, including advisory services that do not include a voting recommendation. This may suggest potential openness by ISS to a more customized approach similar to the model announced by Glass Lewis.
UPDATE: ISS CLARIFIES POLICY ON ADVANCE NOTICE BYLAWS
In late 2025, ISS released its updated proxy voting guidelines for TSX-listed issuers, effective for shareholder meetings on or after February 1, 2026. The guidelines clarify that ISS will not look favourably on advance-notice bylaws that include disclosure requests exceeding requirements under Canadian corporate or securities law. In particular, director questionnaires are likely to be considered unacceptable if they require excessive disclosure or are not made publicly available. The update is clarifying in nature and does not change the substance of ISS’ existing guidance on the subject. Notably, we understand that ISS will generally not apply its proxy voting guidelines for TSX- listed issuers, including its policies relating to advance notice bylaws, to Canadian-incorporated issuers listed on the TSX that are also U.S. domestic issuers. Advance notice bylaws remain essential tools for public companies, helping to prevent surprise nominations at shareholder meetings and ensuring that all shareholders receive sufficient information to make informed decisions. When adopting or amending these bylaws, boards should consider established best practices, which we outlined in Governance Insights 2024: A Review of Shareholder Activism in Canada for 2024 – Key Decisions and Trends to Watch for in 2025 .
U.S. ADMINISTRATION VOTES “NO” ON PROXY ADVISORS
In December 2025, the current U.S. administration issued an executive order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors.” The order aims to curtail the power of proxy advisory firms – particularly ISS and Glass Lewis – by criticizing their perceived prioritization of “radical politically-motivated agendas” such as diversity, equity and inclusion (DEI), and environmental, social and governance (ESG) initiatives, over investor returns. Among other things, it directs the Securities and Exchange Commission (SEC) to review and potentially revise regulations related to proxy advisors (including enhanced transparency on methodologies, conflicts of interest and DEI/ESG factors) and instructs the Federal Trade Commission (FTC), in consultation with the Attorney General, to investigate potential anticompetitive practices or unfair methods of competition. These measures are directive in nature and will require subsequent agency action (such as SEC rulemaking or FTC investigations), which could face legal challenges. Although no comparable regulatory actions have been taken against proxy advisors in Canada, the U.S. developments may lead to short-term dampened support for DEI- and ESG-related shareholder demands north of the border, particularly as many Canadian institutional investors and activists draw on U.S.-influenced proxy guidance. Canadian companies with significant U.S. institutional ownership could feel indirect effects, with potential fragmentation in voting behaviour and reduced predictability in cross-border activism.
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Governance Insights 2026
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