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Kansas Proxy Advisory Transparency Act Likely Violates First Amendment

Its distinction between a voting recommendation "that aligns with the views of company management" and one that "recommends a vote against company management" is unconstitutionally viewpoint-based, a court holds.

Eugene Volokh | 6.26.2026 8:01 AM

From Judge Holly Teeter (D. Kan.) Wednesday in Institutional Shareholder Servs. Inc. v. Kobach:

SB 375 is known as the Proxy Advisory Transparency Act. Under SB 375, a "proxy advisor" is "a person who, for compensation, provides a proxy advisory service to shareholders of a company or to other persons with authority to vote on behalf of the shareholders of a company." "Proxy advisory service" is defined as certain "services that are provided in connection with or in relation to a company, or are provided to any person in this state." This includes "[a]dvice or a recommendation on how to vote on a company proposal or proxy proposal." Charitable organizations and banks that meet certain criteria are excluded from the definition of proxy advisory service….

If a proxy advisor makes a voting recommendation that aligns with the views of company management, SB 375 does not require any action. If a proxy advisor recommends a vote "against company management," whether specifically or as default policy, and that recommendation is not based on a "written financial analysis," the proxy advisor must:

(1) Concurrently with providing the proxy advisory service, include a clear and conspicuous disclosure to each shareholder, or entity or other person acting on behalf of a shareholder, receiving the proxy advisory service that:
(A) Identifies the service being provided;
(B) identifies the recommendation or policy at issue; and
(C) states that the proxy advisor has made the recommendation or policy without basing such recommendation on a written financial analysis regarding the impact of such recommended action........

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