President Trump Signs EO Addressing Proxy Advisory Firms

On December 11, President Trump issued an executive order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors” (the Order) that directs the SEC, DOL, and the FTC to review existing regulation and guidance and take action to limit the influence of proxy advisory firms, including ISS and Glass Lewis. In particular, the Order directs each agency to review and, if deemed appropriate, rescind or revise all rules and regulations relating to proxy advisory firms and shareholder proposals that implicate “diversity, equity, and inclusion” (DEI) and “environmental, social, and governance” (ESG) priorities that are inconsistent with the purpose of the executive order. While the Order is not expected to impact the 2026 proxy voting season, registered fund directors can expect increased industry focus on proxy advisory firm processes for the foreseeable future, and it is likely that proxy advisory firms will begin shifting policies towards more tailored approaches in advance of any new or amended regulations or guidance. Boards may seek to inquire about how their fund proxy voting frameworks currently address DEI and ESG issues, and whether any changes are anticipated in the near-term. In addition, directors may wish to identify areas of regulatory focus or inquiry by monitoring SEC examination priorities, speeches and litigation trends relating to proxy voting or shareholder proposals.

Click here to read the Trump Administration’s Executive Order.