Proxy Advisors · 04

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The 2025 Texas proxy-advisor statute — S.B. 2337 / TBOC ch. 6A

Signed June 20, 2025 — Effective Sept. 1, 2025 — Codified at TBOC ch. 6A

Long-form source as of v1.6 · 2026-08-05

Texas S.B. 2337, 89th Leg., R.S. (2025), signed June 20, 2025 and effective September 1, 2025, added new TBOC Chapter 6A — Proxy Advisory Services. The statute defines proxy advisor, proxy advisory service, proxy proposal, and company proposal; treats a proxy-advisory service as not provided solely in shareholders’ financial interest if it is based wholly or partly on nonfinancial factors (ESG, DEI, social-credit or sustainability factors, or certain organization/group commitments); requires written economic analyses for certain shareholder-sponsored proposals; imposes notice and disclosure obligations to recipients and companies; and treats violations as deceptive trade practices under the Texas Deceptive Trade Practices Act (Tex. Bus. & Com. Code ch. 17).10

Figure 5 · Statutory anatomy

TBOC ch. 6A — four functional columns: definitions, triggers, obligations, remedies.

Texas S.B. 2337, codified at TBOC ch. 6A, effective Sept. 1, 2025. Each column maps the operative statutory mechanics directly to text.

01 Definitions Statutory terms

Proxy advisor. Person providing voting recommendations on company or shareholder proposals.

Proxy advisory service. The advice itself, in whatever delivery form.

Proxy proposal. Shareholder-sponsored proposal on a proxy ballot.

Company proposal. Management-sponsored proposal.

“Nonfinancial factors.” ESG, DEI, social-credit, sustainability, certain organization/group commitments.

 02 Triggers When ch. 6A applies

Nonfinancial-factor recommendation. Advice based wholly or partly on nonfinancial factors.

Divergent from management. Recommendation diverges from company management.

Conflicting client advice. Materially different recommendations to different clients on the same proposal.

Shareholder-sponsored proposal. Evaluation of proposal under 14a-8 / state-law equivalent.

 03 Obligations What the firm must do

Website disclaimer. Plain-statement that service is not provided solely in shareholders’ financial interest.

Notice to issuer + AG. Required when firm provides materially differing advice across clients.

Conflict labeling. Custom-client recommendations to be labeled as “conflicts.”

Written economic analysis. Required for shareholder-sponsored proposals.

Disclosure of non-fiduciary basis. Explicit statement that service is not solely in financial interest.

 04 Remedies Enforcement architecture

DTPA violation. Treated as deceptive trade practice under Tex. Bus. & Com. Code ch. 17.

Enforcement. DTPA § 17.47 action (§ 6A.201); declaratory / injunctive relief for an “affected party” (§ 6A.202(b)).

Civil penalties. Via DTPA § 17.47(c): up to $10,000 per violation. Ch. 6A itself states no dollar amount.

Private right of action. Preserved by the federal preliminary injunction (PI bars AG enforcement against ISS / GL only).

 Codified at TBOC ch. 6A · DTPA cross-reference at Tex. Bus. & Com. Code ch. 17

Sources. Tex. Bus. Orgs. Code ch. 6A (codified S.B. 2337), eff. Sept. 1, 2025; Tex. Bus. & Com. Code ch. 17 (DTPA, incorporated by reference). Practitioner commentary: Gibson Dunn alert (Aug. 30, 2025).

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