White House Targets Proxy Advisors: Power Shift in Corporate Governance

A new White House order under the Trump administration seeks to limit the influence of proxy advisory firms, a move seen as shifting power back to CEOs. The order calls for increased oversight of firms like Institutional Shareholder Services and Glass, Lewis & Co., reigniting debates on shareholder activism and ESG considerations.

The White House has issued a significant order intended to curtail the influence of proxy advisory firms, signaling a shift towards empowering CEOs. Analysts suggest this represents a strategic Republican effort to reshape corporate governance dynamics.

President Trump recently directed the U.S. Securities and Exchange Commission and other agencies to scrutinize proxy advisory firms Institutional Shareholder Services and Glass, Lewis & Co.—entities that wield significant influence over mutual fund voting in corporate elections.

Amid criticism that these firms push politically motivated agendas, the directive aims to scale back their influence, sparking fears among shareholder activists about its impact on environmental, social, and governance (ESG) efforts.

(With inputs from agencies.)