ISS is perhaps the most influential proxy advisor, advising pension funds and other institutional investors how to vote on shareholder proposals. Nonetheless, the secretive firm holds a vast amount of influence over how public companies operate.

ISS has great potential for conflict of interests because it provides shareholder voting recommendations on publicly traded companies and consulting services to those companies.

In the case of ISS, this means the subtle threat of adverse shareholder votes if companies don’t pay fees to ISS to become clients. Even Glass Lewis, which is owned by two activist pension funds, opposes the ISS model, calling the provision of consulting services “a problematic conflict of interest that goes against the very governance principles that proxy advisors like ourselves advocate.”

The Senate Banking Committee heard testimony recently on corporate governance issues, including a bill to require greater transparency from proxy advisory firms like ISS. (ISS is fighting this modest proposal for transparency and accountability in its practices, which is ironic because it has led the charge to mandate ever more onerous corporate disclosures.) The issue may seem like corporate inside-baseball, but the legislation would be a crucial step in returning more power to average investors and curbing the shady operating practices of some proxy advisors.