S.B. No. 2337 aims to regulate proxy advisory services in Texas by establishing clear disclosure requirements for proxy advisors. The bill emphasizes that when shareholders hire professionals for advice on exercising their rights, they expect that the service will prioritize their financial interests. It mandates that proxy advisors disclose when their recommendations are based on nonfinancial factors, such as environmental, social, or governance (ESG) criteria, and requires them to provide a written economic analysis of the financial impact of shareholder-sponsored proposals that deviate from the board's recommendations. This is intended to prevent deceptive practices and ensure transparency in the advisory process.

The bill introduces a new chapter, Chapter 6A, to the Business Organizations Code, which includes definitions for key terms such as "proxy advisor," "proxy proposal," and "company proposal." It outlines specific disclosure requirements for proxy advisors when providing conflicting advice to different clients and establishes that violations of these provisions are considered deceptive trade practices. The legislation is set to take effect on July 1, 2025, contingent upon receiving a two-thirds vote from both houses, or on September 1, 2025, if that vote is not achieved.

Statutes affected:
Introduced: ()
Senate Committee Report: ()
Engrossed: ()
House Committee Report: ()
Enrolled: ()