Purpose of the Template
If your organization is a proxy advisory firm, an asset manager relying on proxy advisors, or a public company monitoring voting recommendations, the DOJ's August 2026 withdrawal of its 1987 business review letter to ISS creates immediate compliance obligations. This template provides a structured internal memorandum to help you document your review of current practices against the withdrawn letter's factual premises and identify areas requiring policy adjustment.
The template addresses three compliance scenarios:
- Proxy advisory firms holding or previously relying on business review letters
- Asset managers using proxy advisor recommendations in voting decisions
- Public companies tracking proxy advisor methodologies and potential conflicts
Use this memorandum to establish a documented compliance review before the next proxy season, especially if your practices involve sustainability-related voting policies or corporate consulting services that may attract regulatory scrutiny.
Prerequisites
Before completing this template, gather:
- Current business review letters or SEC no-action letters your organization holds (if any)
- Documentation of services offered in the past 24 months
- Proxy voting policies and methodology disclosures
- Information barrier policies separating advisory and consulting functions
- Records of any coordination with other firms on voting recommendations
- Correspondence with state attorneys general or congressional committees (if applicable)
You'll also need authority to convene stakeholders from legal, compliance, investor relations, and business development to validate the factual premises in your assessment.
The Template
CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED MEMORANDUM
TO: [Chief Compliance Officer / General Counsel]
FROM: [Your name and title]
DATE: [Current date]
RE: Business Review Letter Withdrawal Analysis and Compliance Gap Assessment
I. TRIGGERING EVENT
On August 5, 2026, the DOJ Antitrust Division withdrew its 1987 business review letter to Institutional Shareholder Services Inc., stating the letter no longer reflects ISS's current business practices. The Division cited ISS's expansion into corporate consulting services and noted that ISS and Glass Lewis control more than 90% of the proxy advisory industry, raising "significant competition concerns."
While not an enforcement action, the withdrawal signals increased scrutiny of proxy advisors and potentially broader asset management practices, particularly those involving sustainability-related voting policies.
II. FACTUAL PREMISE REVIEW
[Complete this section by comparing your current practices to any existing business review letter or the 1987 ISS letter's core premises]
Original factual premises:
- Services limited to voting rights and corporate governance advice
- No advisory services concerning "corporate operations or business activities"
- [Add any premises from your organization's specific letters]
Current practices assessment:
| Service Category | Current Offering | Consistency with Original Premise | Risk Level |
|---|---|---|---|
| Proxy voting research | [Describe] | [Consistent / Inconsistent] | [Low / Medium / High] |
| Corporate consulting | [Describe] | [Consistent / Inconsistent] | [Low / Medium / High] |
| Sustainability ratings | [Describe] | [Consistent / Inconsistent] | [Low / Medium / High] |
| Board advisory services | [Describe] | [Consistent / Inconsistent] | [Low / Medium / High] |
Material changes since [date of any existing letter]: [List chronologically with implementation dates]
III. MARKET CONCENTRATION ANALYSIS
[For proxy advisory firms only]
Our current market position:
- Estimated market share: [percentage, if publicly disclosed]
- Number of institutional clients: [count]
- Assets under management influenced by recommendations: [amount, if disclosed]
Competitive landscape:
- Number of direct competitors offering comparable services: [count]
- Barriers to entry for new proxy advisors: [list]
- Evidence of coordination or information sharing with competitors: [describe or state "None identified"]
IV. SUSTAINABILITY-RELATED PRACTICES REVIEW
The Division specifically referenced sustainability-related activities as an area of focus. Document:
Voting recommendation methodology:
- How sustainability factors are weighted in recommendations: [describe]
- Whether recommendations prioritize sustainability objectives over financial returns: [Yes / No / Depends]
- Disclosure of methodology to clients and issuers: [Adequate / Needs enhancement]
Potential conflicts:
- Corporate clients receiving both consulting and voting recommendations: [count or "None"]
- Information barriers between consulting and advisory functions: [Describe policies]
- Effectiveness testing of barriers: [Last audit date]
Coordination concerns:
- Joint statements or initiatives with other proxy advisors: [list or "None"]
- Shared methodologies or data sources: [describe]
- Industry group memberships involving voting policy discussions: [list]
V. IDENTIFIED COMPLIANCE GAPS
[Prioritize by enforcement risk]
High priority:
- [Gap description], Recommended action: [specific remediation]
- [Gap description], Recommended action: [specific remediation]
Medium priority:
- [Gap description], Recommended action: [specific remediation]
Low priority:
- [Gap description], Recommended action: [specific remediation]
VI. RECOMMENDED ACTIONS
Immediate (within 30 days):
- Retain outside antitrust counsel for privilege protection
- Audit information barriers between consulting and advisory functions
- Review all public statements and methodology disclosures for consistency
- Document independent basis for voting recommendations
- [Add organization-specific actions]
Short-term (within 90 days):
- Enhance disclosure of conflicts and methodology
- Implement monitoring for coordination with competitors
- Review and update proxy voting policies
- Train staff on antitrust compliance in voting recommendations
- [Add organization-specific actions]
Ongoing:
- Monitor state attorney general investigations and legislative developments
- Track FTC investigation into proxy advisory practices
- Quarterly review of service offerings against factual premises
- Document independent decision-making for each voting recommendation
VII. BOARD REPORTING
Recommend presenting this analysis to [Audit Committee / Risk Committee / Full Board] by [date], including:
- Summary of DOJ action and implications
- Material changes in our practices since [baseline date]
- Identified compliance gaps and remediation timeline
- Budget requirements for outside counsel and compliance enhancements
Customization Guidance
For proxy advisory firms:
Replace Section II with a detailed comparison of your services to the 1987 ISS letter's premises, even if you don't hold a business review letter yourself. The Division's concerns about corporate consulting services apply industry-wide.
Add a Section VIII addressing client communications: draft talking points explaining how you maintain independence in voting recommendations despite offering consulting services.
For asset managers:
Reframe Section III to address your reliance on proxy advisors rather than market concentration. Document how you make independent voting decisions rather than automatically following recommendations.
Add analysis of your fiduciary duties under ERISA or Investment Advisers Act Section 206, particularly if you vote based on sustainability factors.
For public companies:
Focus Section IV on how proxy advisor methodologies affect your governance disclosures and shareholder engagement strategy. Document instances where recommendations appear inconsistent with disclosed methodology.
Add Section VIII addressing engagement strategy with proxy advisors, including your process for identifying factual errors in research reports.
Across all scenarios:
Replace bracketed placeholders with your organization's specific facts. If you lack data for a field (market share, client count), state "Not publicly disclosed" rather than leaving it blank.
In Section V, tie each gap to a specific enforcement theory: antitrust (coordination, market foreclosure), consumer protection (misleading disclosures), or fiduciary duty (conflicts, inadequate independence).
Adjust the timeline in Section VI based on your risk profile. Organizations facing state attorney general investigations or congressional inquiries should compress all actions into 30-60 days.
Validation Steps
Legal review: Have outside antitrust counsel review your completed memorandum before circulating internally. The attorney-client privilege marking only protects communications made for the purpose of obtaining legal advice.
Factual accuracy: Cross-check every statement in Section II against contemporaneous business records. The Division withdrew ISS's letter based on changed facts; your analysis must be defensible if regulators request it.
Completeness check: Confirm you've addressed all five areas the December 2025 Executive Order directed agencies to examine: conflicts, methodology, registration, coordination, and fiduciary duties.
Board documentation: If presenting to your board, prepare a separate one-page executive summary. Directors need the risk assessment and recommended actions, not the detailed factual analysis.
Quarterly updates: Revisit Sections II and IV every quarter. Material changes in your services or new enforcement actions require updating your gap analysis and may warrant withdrawing reliance on any existing comfort letters.
The DOJ's action establishes that decades-old regulatory comfort can evaporate when business practices evolve. Your compliance program must now assume ongoing scrutiny rather than stable guidance.
