Protecting American Investors From Foreign-owned And Politically-motivated Proxy Advisors

Two proxy firms dominate shareholder voting advice for major U.S. companies, affecting millions’ investments. The order seeks to rein in political influence, improve transparency, and protect investors’ financial interests.

What the order does ​

• Directs the SEC to review and possibly revise rules on proxy advisors and shareholder proposals, targeting those prioritizing DEI and ESG factors.
• Orders the SEC to increase oversight of proxy advisor accuracy, transparency, and possible conflicts of interest.
• Instructs the FTC to investigate anticompetitive practices by proxy advisors.
• Tells the Department of Labor to strengthen fiduciary standards and transparency for retirement plan advisors using proxy firms.
• Examines whether proxy advisors must register as investment advisers under federal law.

Who it affects ​

• Proxy advisory firms (ISS, Glass Lewis, and similar).
• Asset managers and investment advisers relying on proxy advice.
• Retirement plan fiduciaries and plan participants (401(k)s, IRAs).
• U.S. companies subject to shareholder votes.

Context ​

Proxy advisors have faced criticism for advancing social and political agendas perceived as unrelated to investor returns.