Trump executive order directs review of foreign-owned proxy advisors

President Trump signed an executive order on December 11, 2025, directing the SEC, FTC and Department of Labor to review proxy advisory firms ISS and Glass Lewis, which control over 90 percent of the US market. The order signals a top-down counterweight to ESG-focused shareholder proposals affecting fiduciaries and issuers with US exposure.

President Donald J. Trump signed an Executive Order on December 11, 2025, titled "Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors." It criticizes Institutional Shareholder Services and Glass Lewis, which collectively dominate over 90 percent of the US market, contending they prioritize politically-motivated ESG and DEI agendas over investors' pecuniary interests. The order directs three federal agencies to undertake immediate reviews and consider new rulemaking, initiating a top-down federal review aimed at accountability, transparency and competition within the industry.

The order affects proxy advisors, issuers, asset managers and fiduciaries managing pension and retirement assets. The SEC must review rules and guidance on proxy advisors and shareholder proposals, including Rule 14a-8, and consider whether advisors should register as investment advisers. The FTC, with the Attorney General, will investigate potential anti-trust violations and undisclosed conflicts of interest. The Department of Labor must review ERISA regulations to strengthen fiduciary standards, ensuring proxy voting decisions rest solely on participants' financial interests.

The order does not instantly modify rules but directs agencies to begin reviews and potential rulemaking through the Administrative Procedure Act process, so new rules and effective dates depend on the SEC, FTC and DoL reviews. Issuers and asset managers should prepare for increased scrutiny in the 2026 proxy season, reassess integration of non-pecuniary factors into voting and investment policies, and anticipate a more opaque voting environment, placing a premium on direct shareholder communication on governance and financial strategy.

Key figure — Market concentration: ISS and Glass Lewis control over 90 percent of the US market