NEW YORK, April 30 (Reuters) - Ancora Holdings scored a

second victory in its battle with Norfolk Southern ( NSC ) when

prominent proxy advisory firm Institutional Shareholder Services

(ISS) recommended on Tuesday that shareholders elect five of the

activist hedge fund's director candidates.

ISS said the Atlanta-based railway, which has faced

regulatory and legal questions after a derailment last year in

Ohio, needs new directors with deeper and more balanced industry

experience.

The ISS recommendation, which often guides how shareholders

vote on hot-button issues such as board elections and mergers,

was made one day after Glass Lewis, another proxy advisory firm,

backed six of Ancora's candidates. Ancora wants shareholders to

elect seven new directors.

Shareholders will vote at the company's annual meeting on

May 9 unless the two sides reach a settlement beforehand.

ISS backed William Clyburn, who served on the U.S. Surface

Transportation Board, railroad executive Sameh Fahmy, former

Ohio governor John Kasich, former Illinois Central Railway

chairman Gilbert Lamphere, and former banker Allison Landry, who

ISS said could help strengthen communication with shareholders.

Ancora is trying to replace Norfolk Southern ( NSC ) CEO Alan Shaw

with Jim Barber, a former United Parcel Service

executive. ISS endorsed Shaw for election while Glass Lewis

endorsed Barber for election. The hedge fund did not have a

comment about the report.

But ISS called Barber a credible director candidate and CEO

candidate and wrote that even though the firm is not endorsing

him "he appears to a be a capable candidate with experience and

skills that should be transferable to the railroad industry."

In its report, ISS said there is a "clear case for change"

and noted "it appears that safety had been deteriorating for

several years" even before the East Palestine derailment in

2023.

Norfolk Southern ( NSC ) has added new board members in the past

year and appointed a new chief operating officer, John Orr, last

month. A representative for the company did not have an

immediate comment on the report.