in effect
Executive Order 14366, signed December 11, 2025, directs federal agencies to review and potentially tighten oversight of proxy advisory firms — companies that advise large institutional investors on how to vote shares at publicly traded companies. It instructs the SEC, FTC, and Department of Labor to investigate, and where appropriate revise regulations governing, the proxy advisory industry, with particular focus on the two dominant firms: Institutional Shareholder Services (ISS) and Glass Lewis.
The SEC must review all existing rules and guidance on proxy advisors and shareholder proposals — including Rule 14a-8 — and consider revising or rescinding those touching DEI or ESG factors; it must also assess whether proxy advisors should be required to register as Registered Investment Advisers and disclose conflicts of interest more fully. The SEC is directed to examine whether investment advisers who follow proxy advisor recommendations on non-financial factors (DEI, ESG) are breaching their fiduciary duties to clients. The FTC must investigate whether proxy advisors engage in anticompetitive, deceptive, or collusive practices that harm consumers, including pension holders, and coordinate with state antitrust investigations already underway. The Department of Labor must review ERISA regulations to determine whether proxy advisors should formally be classified as investment advice fiduciaries, meaning they would be legally required to act in the financial interest of retirement plan participants. No specific deadlines are set; each agency must act “consistent with the Administrative Procedure Act,” meaning formal rule changes would require public notice-and-comment periods.
Proxy advisory firms — primarily ISS and Glass Lewis, which together hold over 90 percent of the market — face potential new registration requirements, mandatory conflict-of-interest disclosures, and antitrust scrutiny. Institutional investors such as mutual funds, pension funds, and ETF managers who rely on proxy advisor recommendations may face new fiduciary obligations if those recommendations factor in non-financial criteria. Ordinary Americans with 401(k)s, IRAs, or pension plans are the stated beneficiaries, as the order frames the oversight as protecting retirement savings from advice that prioritizes non-financial goals over investment returns.