Overview
- The executive order directs the SEC to review proxy rules and guidance, enforce anti-fraud provisions on voting recommendations, consider requiring proxy advisers to register as investment advisers, and seek greater transparency around methodologies and conflicts tied to DEI and ESG.
- It instructs the FTC, in consultation with the Attorney General, to investigate potential unfair or anticompetitive conduct by proxy advisers and to assess connections to ongoing state inquiries, including Florida’s lawsuit.
- The Labor Department is told to strengthen ERISA fiduciary standards and increase disclosure of how retirement plans rely on proxy advice to ensure actions align with beneficiaries’ financial interests.
- The White House singles out foreign-owned ISS and Glass Lewis, which together control more than 90% of the U.S. proxy advisory market, accusing them of advancing politicized proposals involving racial equity audits and greenhouse-gas reductions.
- Legal analysts say the order is unlikely to alter the current proxy season but could prompt immediate behavioral shifts under heightened scrutiny, aligning with longstanding complaints from executives including Elon Musk and Jamie Dimon.