Institutional Shareholder Services (ISS), a leading proxy advisory firm, has announced that it will no longer factor diversity into its recommendations for US corporate board elections, citing anti-DEI directives from President Donald Trump’s administration.
In a statement published on Tuesday, ISS confirmed that from 25 February onwards, its voting recommendations will no longer take into account the gender, racial, or ethnic composition of a company’s board when advising investors on director elections.
The decision comes as several major corporations, including Google’s parent company Alphabet and Goldman Sachs, scale back their diversity, equity, and inclusion (DEI) initiatives amid increasing political and regulatory pressure. Trump’s administration has made dismantling corporate and federal DEI programmes a key priority.
ISS plays a significant role in shaping shareholder decisions by providing guidance on board elections, governance issues, and shareholder proposals. However, conservative groups have criticised the firm’s influence over corporate governance outcomes.
While ISS is moving away from diversity considerations, rival proxy adviser Glass Lewis & Co. has largely maintained its position on board diversity. The firm continues to recommend that investors vote against the chair of a board’s nominating committee if the board of a Russell 3000 index company is not at least 30% gender diverse.
“Diversity is multifaceted and has long been considered a good corporate-governance practice,” a Glass Lewis spokeswoman stated. “We believe that’s still the case. However, given shifting market dynamics in the US, we will reassess our approach as needed, taking input from clients and responding to regulatory or legislative changes.”
ISS’s decision follows a broader trend among major asset management firms retreating from diversity benchmarks. BlackRock, the world’s largest asset manager, recently removed explicit board diversity targets from its shareholder voting guidelines. While its 2024 guidelines stated that boards should aim for at least 30% diversity—defined as having at least two women and a director from an underrepresented group—its 2025 guidelines omitted this language, stating instead that most S&P 500 companies already have “diverse representation.”
Vanguard Group, the second-largest asset manager globally, has also pared back its focus on diversity. Its 2024 US voting guidelines contained 13 references to diversity, which were reduced to just two in its 2025 report.
The move by ISS and other financial institutions signals a growing shift in corporate governance policies as companies and investors navigate evolving political and regulatory landscapes in the United States.
