Bill > HB4079

This bill introduces new regulations for proxy advisors, which are firms that provide recommendations to shareholders about how to vote on corporate matters. The bill requires proxy advisors to provide services solely based on the best financial interests of shareholders, explicitly prohibiting considerations of environmental, social, and governance (ESG) principles, diversity initiatives, social credit scores, or non-profit affiliations when making voting recommendations. If a proxy advisor includes non-financial factors in their advice, they must prominently warn recipients that the recommendations may not be in shareholders' best financial interests, disclose this on their website, and notify the company about such recommendations. The bill also stipulates that if a proxy advisor provides conflicting voting recommendations to different shareholders regarding the same proposal, those services will be considered not in shareholders' best financial interests. Affected parties, including the company or its shareholders, can seek a declaratory judgment if they believe a proxy advisor has violated these provisions. The new regulations will apply to proxy advisory services rendered on or after the bill's effective date, which will be immediately if it receives a two-thirds vote in the Texas Legislature, or September 1, 2025, if it does not receive the required legislative support.

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https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4079