Full Breakdown
Trump Issues Executive Order Targeting Proxy Advisory Firms
12/13/2025, 3:55:45 AM
Overview of the Executive Order
On December 12, 2025, President Donald Trump signed an executive order aimed at reviewing the influence of proxy advisory firms, specifically Institutional Shareholder Services (ISS) and Glass Lewis. These firms provide guidance to institutional investors on shareholder voting, often impacting corporate governance decisions. The order directs the Securities and Exchange Commission (SEC) to scrutinize these firms' practices, particularly regarding their incorporation of diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) policies.
Context and Background
ISS, founded in 1985, and Glass Lewis, established in 2003, are major players in the proxy advisory market, advising institutional investors like BlackRock and various pension funds. The firms collectively manage trillions of dollars in assets and have been criticized for their perceived political agendas, which some argue detract from financial returns for investors. Trump's executive order reflects a broader conservative backlash against what they term "woke capitalism," which they believe prioritizes social and political issues over shareholder interests.
Key Concerns Raised
The executive order highlights concerns that ISS and Glass Lewis have used their market dominance to promote "radical leftist policies," including racial equity audits and aggressive climate initiatives. The Trump administration argues that these practices have led to diminished trust among investors and reduced returns on investments. The order also calls for increased transparency regarding potential conflicts of interest and the need for proxy advisers to register as investment advisers.
Official Statements & Responses
In response to the executive order, ISS stated it would review the implications of the directive while emphasizing its commitment to ethical and independent operations. Glass Lewis acknowledged the order and expressed its intent to understand the administration's expectations. Secretary of Labor Lori Chavez-DeRemer remarked that the directive would protect American workers' investments from foreign influences and misguided motivations.
Criticism & Opposition
Critics of the executive order argue that it may undermine the role of proxy advisory firms in promoting responsible corporate governance. Jamie Dimon, CEO of JPMorgan Chase, has previously questioned whether corporate governance should be dictated by for-profit international institutions. Additionally, the order has sparked concerns about potential overreach and the chilling effect it may have on corporate accountability initiatives.
Conflicting Reports & Gaps
While the executive order signals a significant shift in regulatory focus, the actual impact on proxy advisory practices remains uncertain. Experts caution that until the SEC and other agencies complete their reviews, the long-term consequences for ISS and Glass Lewis are unclear. Furthermore, ongoing investigations by the Federal Trade Commission into potential antitrust violations by these firms add another layer of complexity to the situation.
What's Next
The SEC is expected to undertake a comprehensive review of the regulations governing proxy advisory firms, which may lead to significant changes in how these firms operate. Additionally, the Federal Trade Commission will investigate whether ISS and Glass Lewis have engaged in unfair practices, potentially reshaping the landscape of proxy advisory services in the United States.
Verbatim Quotes
“This bold directive will benefit millions of American workers and retirees who have unknowingly had their investment decisions hijacked by foreign actors with misguided motivations,” — Lori Chavez-DeRemer, Secretary of Labor
“ISS does not dictate or set corporate governance standards and remains firmly committed to operating professionally, ethically, independently, and in the best interests of our clients, as we have done historically.” — ISS Spokesperson
“Conflicts of interest, lack of transparency, and one-size-fits-all voting policies have eroded trust and hurt the value of retirement savings for everyday Americans,” — White House Fact Sheet
