On December 12, 2025, the White House issued an executive order aimed at enhancing oversight of foreign-owned proxy advisors, specifically targeting Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC. These firms dominate the proxy advisor market and have a significant influence on corporate governance decisions affecting millions of American investors. The order expresses concerns about their potential use of agendas that may not align with investors’ financial interests, advocating for reforms in the regulations that govern their operations.

The executive order requires the Chairman of the Securities and Exchange Commission (SEC) to review and possibly revise existing regulations regarding proxy advisors and shareholder proposals, especially in relation to diversity, equity, and environmental governance policies. It stresses the importance of transparency in the advice provided by these advisors, including the disclosure of any conflicts of interest that could impact the fiduciary responsibilities of investment advisors. Furthermore, it directs the Federal Trade Commission (FTC) to evaluate whether proxy advisors engage in anticompetitive practices that could harm consumer interests and to verify their compliance with federal antitrust laws.

Regarding retirement investments, the executive order instructs the Secretary of Labor to modify regulations concerning the management of shares held by pension plans under the Employee Retirement Income Security Act (ERISA). This modification aims to ensure that proxy advisors act solely in the financial interests of plan participants and to improve transparency in their operations. Ultimately, this action seeks to restore investor confidence in the decision-making processes of proxy advisors that significantly impact the American financial landscape.

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