U.S. President Donald Trump signed an executive order on Thursday directing federal agencies to review the operations of leading proxy advisory firms, including Institutional Shareholder Services (ISS) and Glass Lewis, citing concerns that they advance politically motivated agendas on environmental and social issues. The move intensifies scrutiny of the sector, which advises institutional investors on corporate elections, executive pay, and boardroom votes.

---

Details of the Executive Order

According to the White House, the order instructs the U.S. Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), the Labor Department, and other agencies to:

• Examine whether ISS and Glass Lewis have violated federal rules or antitrust laws.
• Consider potential regulatory changes for proxy advisers.
• Review ongoing state-level investigations for possible federal implications.

The order is the latest step in a conservative push to curb the influence of proxy advisers, amid concerns that they exert outsized power over shareholder decisions, including votes on board members and corporate governance policies.

---

Background on Proxy Adviser Controversies

Both ISS and Glass Lewis have faced criticism from Republican politicians, business leaders, and prominent executives such as JP Morgan CEO Jamie Dimon and Elon Musk. Critics argue the firms wield too much influence over corporate governance and push “radical” ESG-related policies.

Past Republican efforts to limit their operations have faced legal hurdles. For instance:

• In August 2025, a federal judge blocked a Texas law restricting ISS from advising on diversity and environmental matters.
• In July 2025, a federal appeals court reaffirmed that ISS does not “solicit” proxy votes, preserving a lower court ruling that blocked 2020 regulations potentially harmful to their business model.

ISS emphasized that it operates as an SEC-registered investment adviser, providing independent recommendations to help shareholders navigate complex corporate votes. Glass Lewis has not immediately commented on the new order.

---

Foreign Ownership and ESG Controversies

Trump also cited foreign ownership of proxy advisers as a concern:

• ISS was majority-acquired by Germany’s Deutsche Börse in 2020.
• Glass Lewis is owned by Canadian private equity firm Peloton Capital.

Both firms have been targeted recently for positions on ESG issues, such as corporate climate reporting and workforce diversity. In response, ISS and Glass Lewis have scaled back recommendations on climate proposals and other ESG metrics.

---

Legal and Regulatory Outlook

The executive order directs federal authorities, including the FTC and the Attorney General, to assess whether state-level investigations in Florida, Texas, and elsewhere raise federal antitrust issues. While past legal challenges have favored ISS and Glass Lewis, ongoing scrutiny could lead to new regulatory measures or federal oversight, reshaping the U.S. proxy advisory landscape.

Analysts say the order may influence corporate governance and ESG investing trends, potentially impacting institutional shareholder voting practices and broader financial markets.