An executive order signed Dec. 11, 2025 directs the chairman of the Securities and Exchange Commission, the chairman of the Federal Trade Commission, and the secretary of labor to review proxy advisors and related rules. The order was published in the Federal Register on Dec. 16, 2025. It is Executive Order 14366.
The order names two foreign-owned firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC. It says they control more than 90 percent of the proxy advisor market and advise clients on how to vote large numbers of shares held in mutual funds and exchange-traded funds. It says clients often follow that advice, and their holdings can be a large stake in the country’s biggest public companies.
The order says the firms influence shareholder proposals, board makeup, executive pay, capital markets, and the value of investments, including 401(k) plans and individual retirement accounts. It says they use that role to advance agendas it calls politically motivated, including “diversity, equity, and inclusion” and “environmental, social, and governance” policies. It cites support for proposals that companies conduct racial equity audits and cut greenhouse gas emissions, and guidance based on the racial or ethnic makeup of boards.
The order also cites concerns about conflicts of interest and the quality of recommendations. It says the United States must increase oversight and act to restore public confidence, including through accountability, transparency, and competition. It does not revoke or amend an earlier order, and it sets no deadline for the reviews.
The order directs the commission chairman to review every rule, regulation, guidance document, bulletin, and memorandum that concerns proxy advisors. Consistent with the Administrative Procedure Act, the law that sets how agencies make rules, the chairman shall consider revising or rescinding items that conflict with the order’s purpose, especially where they involve the diversity and environmental policies named in the order. The chairman shall also consider revising or rescinding shareholder-proposal rules, including the rule known as Rule 14a-8, that conflict with that purpose.
The order directs the chairman to enforce antifraud provisions of federal securities laws against material misstatements or omissions in proxy voting recommendations. The chairman shall assess whether proxy advisors covered by the Investment Advisers Act of 1940 must register as investment advisers, and shall consider requiring more disclosure of recommendations, methods, and conflicts of interest. The chairman shall analyze whether a proxy advisor can be a means for investment advisers to coordinate votes and, through that coordination, form a group under the Securities Exchange Act of 1934, and shall direct staff to examine whether registered advisers who follow proxy advice on nonfinancial factors act inconsistently with fiduciary duties.
The order directs the Federal Trade Commission chairman, consulting the attorney general, to review ongoing state antitrust investigations of proxy advisors and decide whether the conduct is probably linked to violations of federal antitrust law. Under the Federal Trade Commission Act, and consulting the attorney general as appropriate, the chairman shall investigate whether proxy advisors use unfair methods of competition or unfair or deceptive acts that harm consumers in the United States. The order lists conspiring or colluding to reduce the value of investments, including pensions and retirement accounts; failing to disclose conflicts adequately; giving misleading or inaccurate information; weakening informed choices; or other conduct that violates antitrust law as the order defines it.
The order directs the labor secretary, consistent with the law on agency rulemaking, to revise regulations and guidance on the fiduciary status of people who manage, or who advise managers of, rights attached to shares held by plans covered by the Employee Retirement Income Security Act of 1974, including proxy votes and corporate engagement. The secretary shall consider whether those revisions should state that a person in a relationship of trust and confidence with a client, including a proxy advisor, who is paid to advise on those rights is an investment-advice fiduciary under that law.
The secretary shall act to strengthen fiduciary standards for pension and retirement plans covered by that law. The order says that work shall include assessing whether proxy advisors act only in the financial interests of plan participants and whether any practices reduce the monetary value of plan assets. The secretary shall also act to increase transparency about the use of proxy advisors, particularly on the diversity and environmental investment practices named in the order.
The order says it does not limit authority already given by law to an agency or the budget functions of the director of the Office of Management and Budget. It is to be carried out consistent with applicable law and available appropriations. It does not create a right or benefit that a party can enforce in court against the United States, its agencies, or its officers.