President Trump Signs Executive Order to Strengthen Accountability in Proxy Advisory Industry
President Trump Signs Executive Order to Strengthen Accountability in Proxy Advisory Industry
Trump's order boosts SEC/DOL oversight of proxy advisors, ensuring voting recommendations prioritize investors' financial interests over ideology.
WASHINGTON, DC, UNITED STATES, December 15, 2025 /EINPresswire.com/ -- President Donald J. Trump has signed an Executive Order aimed at increasing accountability and transparency within the proxy advisory industry, which plays a significant role in shaping corporate governance decisions across the United States. The Order responds to long-standing concerns that proxy advisory firms may influence shareholder votes using criteria that extend beyond financial performance, including ESG or DEI considerations that some policymakers argue introduce political or ideological priorities. With two firms—Institutional Shareholder Services and Glass Lewis—controlling the vast majority of the market, the administration asserts that additional oversight is necessary to ensure their recommendations align with the financial interests of American investors, especially those relying on retirement plans such as 401(k)s, IRAs, and pensions.The Executive Order directs the Securities and Exchange Commission to review or revise regulations governing proxy advisory firms, particularly rules that involve non-financial considerations. It calls for stronger enforcement of anti-fraud provisions related to voting recommendations, potential registration requirements, greater conflict-of-interest disclosure, and an examination of whether investment advisers depend too heavily on proxy advisors when making voting decisions. The Federal Trade Commission is instructed to assess whether proxy advisory practices involve unfair or deceptive conduct and to consider how federal oversight may interact with state-level antitrust investigations. The Department of Labor is tasked with reinforcing ERISA fiduciary obligations by requiring retirement plan fiduciaries to provide clearer justification for their reliance on proxy advisors and to ensure that voting and investment choices prioritize financial outcomes.
For investors, the administration expects the Order to strengthen confidence in the proxy voting system by ensuring that recommendations are made with an emphasis on long-term returns rather than non-financial objectives. Companies and institutional investors may see shifts in how governance practices, shareholder proposals, and engagement strategies are evaluated as regulatory agencies implement new oversight measures. The initiative fits within broader efforts to reinforce transparency, fiduciary responsibility, and financial focus within the U.S. investment ecosystem. As agencies begin acting on the directives, market participants will need to closely track regulatory changes to maintain compliance and adapt to a more financially oriented framework for proxy voting.
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