The measures will "harm the governance process and suppress the free and full exercise of shareholder voting rights," a dissenting commissioner says.
Institutional Shareholder Services says its lawsuit is necessary to litigation to be necessary to "prevent the chill of proxy advisers’ protected speech."
The commission rescinds guidance that led investment managers to outsource their proxy-voting decisions to proxy advisers.
Directors have to protect both the company's and its shareholders' interests, which can conflict, as in the case of some coercive takeover bids.
