In my capacity as President, empowered by the Constitution and the laws of the United States, I hereby issue the following order:
Section 1. Purpose.
While many Americans remain blissfully unaware, two foreign-owned advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, significantly influence the policies and actions of the nation’s largest corporations through their role in shareholder voting. Dominating over 90 percent of the proxy advisory market, these firms provide guidance to their clients on how to vote the substantial number of shares they manage for millions of Americans, particularly those invested in mutual funds and exchange-traded funds. Given the size of these holdings, their clients often exert considerable influence over the governance of major publicly traded companies.
This situation grants proxy advisors substantial leverage in corporate governance matters, encompassing shareholder proposals, board compositions, and executive pay structures. Furthermore, their impact extends to capital markets and the overall value of American investments, which include 401(k)s, IRAs, and other retirement funds. Alarmingly, these advisors frequently leverage their considerable authority to promote radical, politically charged agendas—such as “diversity, equity, and inclusion” and “environmental, social, and governance” initiatives—despite the expectation that investor returns should take precedence. For instance, these firms have backed shareholder proposals mandating racial equity audits and significant reductions in greenhouse gas emissions, while one continues to offer advice predicated on the racial or ethnic diversity of corporate boards. Consequently, their operations raise pressing concerns regarding conflicts of interest and the integrity of their recommendations. It is imperative that the United States enhances oversight and takes action to restore public confidence in the proxy advisory sector by fostering accountability, transparency, and competition.
Sec. 2. Protecting Investors from Politicized Advice
(a) The Chairman of the Securities and Exchange Commission (SEC) shall undertake a comprehensive review of all rules, regulations, guidance, bulletins, and memoranda concerning proxy advisors. In line with the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq.), the SEC Chairman shall consider revising or rescinding any rules and guidelines that conflict with the intent of this order, particularly those related to “diversity, equity, and inclusion” and “environmental, social, and governance” principles.
(b) The SEC Chairman shall also evaluate the potential revision or rescission of all regulations concerning shareholder proposals, including Rule 14a-8 (17 CFR 240.14a-8), that do not align with the objectives of this order.
(c) The SEC Chairman shall:
(i) enforce the anti-fraud provisions of Federal securities laws against material misstatements or omissions in proxy advisors’ voting recommendations;
(ii) assess whether proxy advisors, whose activities fall under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), should be required to register as Registered Investment Advisers;
(iii) consider mandating proxy advisors to enhance transparency regarding their recommendations, methodologies, and conflicts of interest, particularly concerning “diversity, equity, and inclusion” and “environmental, social, and governance” factors;
(iv) analyze the circumstances under which a proxy advisor may function as a conduit for investment advisers to coordinate and amplify their voting decisions regarding a company’s securities, potentially forming a group under sections 13(d)(3) and 13(g)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); and
(v) direct SEC staff to investigate whether Registered Investment Advisers utilizing proxy advisors for recommendations on non-pecuniary factors—including, where appropriate, “diversity, equity, and inclusion” and “environmental, social, and governance” considerations—are acting in accordance with their fiduciary responsibilities.
Sec. 3. Unfair, Deceptive, or Anticompetitive Practices
(a) The Chairman of the Federal Trade Commission (FTC), in collaboration with the Attorney General, shall scrutinize ongoing state antitrust investigations into proxy advisors to ascertain if there is a substantial link between the actions under investigation and violations of Federal antitrust legislation.
(b) The FTC Chairman, utilizing the authorities granted by the Federal Trade Commission Act (15 U.S.C. 41 et seq.) and in consultation with the Attorney General, shall investigate whether proxy advisors engage in unfair competitive practices or deceptive acts that adversely affect American consumers by:
(i) conspiring or colluding, either explicitly or implicitly, to undermine the value of consumer investments (including pensions and retirement savings);
(ii) failing to disclose conflicts of interest adequately;
(iii) providing misleading or erroneous information;
(iv) impeding consumers’ ability to make informed decisions; or
(v) engaging in practices that infringe upon antitrust laws as delineated in 15 U.S.C. 12(a) or section 5 of the Federal Trade Commission Act (15 U.S.C. 45).
Sec. 4. Protecting Pensions and Retirement Plans
(a) The Secretary of Labor shall, in accordance with the APA, revise all regulations and guidance regarding the fiduciary status of individuals who manage or advise on the rights associated with shares held by plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. 1001 et seq.), specifically concerning proxy votes and corporate engagement, in line with this order’s policy. The Secretary shall contemplate whether these revisions should clarify that any individual who maintains a relationship of trust with their client—including proxy advisors—who offers advice for a fee regarding the exercise of rights associated with shares held by ERISA plans qualifies as an investment advice fiduciary under ERISA.
(b) The Secretary of Labor shall take all necessary measures to strengthen the fiduciary standards of pension and retirement plans covered by ERISA. This includes evaluating whether proxy advisors consistently act in the financial interest of plan participants and how their practices may undermine the value of ERISA plan assets.
(c) The Secretary of Labor shall seek to enhance transparency regarding the use of proxy advisors, particularly in relation to “diversity, equity, and inclusion” and “environmental, social, and governance” investment strategies.
Sec. 5. General Provisions
(a) Nothing in this order shall be interpreted to impair or otherwise influence:
(i) the authority vested by law in any executive department or agency, or their heads; or
(ii) the functions of the Director of the Office of Management and Budget concerning budgetary, administrative, or legislative proposals.
(b) This order shall be executed in accordance with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, their officers, employees, or agents, or any other individual.
(d) The costs incurred for the publication of this order shall be borne by the Department of Labor.
DONALD J. TRUMP
THE WHITE HOUSE,
December 11, 2025.
