Key Takeaways
- • Interfaith Center on Corporate Responsibility, United Church Funds and Ceres filed suit on Oct. 29, 2026 in the U.S. District Court for the Eastern District of Kentucky seeking an injunction against Kentucky's Senate Bill 183, which took effect in July 2026.
- • SB 183 requires disclosures when proxy advisers give materially different voting advice to different clients, and mandates a written financial analysis supporting certain recommendations; lawmakers overrode Gov. Andy Beshear's veto on March 31.
- • Plaintiffs argue the law violates the First and Fourteenth Amendments through viewpoint discrimination, compelled speech and vague language, and name Kentucky Attorney General Russell Coleman as defendant.
- • Similar laws in Texas, Kansas and Indiana have been preliminarily enjoined by federal courts and are not currently enforceable, according to the article.
- • The Kentucky challenge comes amid broader federal scrutiny of ISS and Glass Lewis, including an SEC formal investigation into ISS opened in July 2026.
Summary
Investor groups are challenging a Kentucky law that imposes heightened disclosure and analysis requirements on proxy-advisory firms, according to Pensions & Investments. Kentucky lawmakers passed Senate Bill 183 in March 2026. The law requires proxy advisers that provide materially different voting advice to different clients to disclose those differences to affected shareholders, companies and the state attorney general. It also mandates a written financial analysis supporting certain recommendations. Gov. Andy Beshear vetoed the measure, but lawmakers overrode the veto on March 31, and the law took effect in July.
On Oct. 29, the Interfaith Center on Corporate Responsibility, which represents more than 300 institutional investors; the United Church Funds, which provides investment services to more than 1,100 churches and faith-based institutions; and Ceres, a sustainability advocacy group, filed suit in the U.S. District Court for the Eastern District of Kentucky. The complaint names Attorney General Russell Coleman and seeks an injunction blocking enforcement. The plaintiffs contend the law violates the First and Fourteenth Amendments by discriminating against certain viewpoints, compelling statements organizations do not believe, and using vague language that exposes them to enforcement actions and financial penalties. Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, said the provisions "clearly violate fundamental First Amendment principles." Coleman's office could not immediately be reached for comment.
The article notes that Texas, Kansas, Indiana, Oklahoma and Tennessee passed similar laws in 2025 and 2026. Federal courts in Texas, Kansas and Indiana issued preliminary injunctions against those laws, so they are not currently enforceable.
The Kentucky case sits within a wider campaign by the White House, the Securities and Exchange Commission, congressional Republicans and state lawmakers to curb the influence of Institutional Shareholder Services and Glass, Lewis & Co., the two largest proxy firms. President Donald Trump issued an executive order in December 2025 criticizing the firms and directing regulators to rescind or revise rules curbing their "enormous influence." In July 2026, the SEC Enforcement Division issued a formal order of investigation into ISS along with a subpoena for client records, vote authorization agreements and voting recommendations and data. ISS declined to produce voting recommendation records without anonymizing them first, citing First Amendment concerns in an August letter. In September, the SEC asked a district court to compel ISS to turn over information on its proxy recommendations and votes. Institutional investors have largely opposed these efforts, arguing proxy advisers provide an affordable alternative to conducting their own analysis of hundreds of thousands of ballot proposals each proxy season.
On Oct. 29, the Interfaith Center on Corporate Responsibility, which represents more than 300 institutional investors; the United Church Funds, which provides investment services to more than 1,100 churches and faith-based institutions; and Ceres, a sustainability advocacy group, filed suit in the U.S. District Court for the Eastern District of Kentucky. The complaint names Attorney General Russell Coleman and seeks an injunction blocking enforcement. The plaintiffs contend the law violates the First and Fourteenth Amendments by discriminating against certain viewpoints, compelling statements organizations do not believe, and using vague language that exposes them to enforcement actions and financial penalties. Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, said the provisions "clearly violate fundamental First Amendment principles." Coleman's office could not immediately be reached for comment.
The article notes that Texas, Kansas, Indiana, Oklahoma and Tennessee passed similar laws in 2025 and 2026. Federal courts in Texas, Kansas and Indiana issued preliminary injunctions against those laws, so they are not currently enforceable.
The Kentucky case sits within a wider campaign by the White House, the Securities and Exchange Commission, congressional Republicans and state lawmakers to curb the influence of Institutional Shareholder Services and Glass, Lewis & Co., the two largest proxy firms. President Donald Trump issued an executive order in December 2025 criticizing the firms and directing regulators to rescind or revise rules curbing their "enormous influence." In July 2026, the SEC Enforcement Division issued a formal order of investigation into ISS along with a subpoena for client records, vote authorization agreements and voting recommendations and data. ISS declined to produce voting recommendation records without anonymizing them first, citing First Amendment concerns in an August letter. In September, the SEC asked a district court to compel ISS to turn over information on its proxy recommendations and votes. Institutional investors have largely opposed these efforts, arguing proxy advisers provide an affordable alternative to conducting their own analysis of hundreds of thousands of ballot proposals each proxy season.
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