Executive Order No. 14366. Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors

• Executive Order No.: 14366
• Published date: 16 December 2025
• Citation: 90 FR 58503
• Date: 11 December 2025
• Section: Presidential Documents

Presidential Documents

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Federal Register / Vol. 90, No. 239 / Tuesday, December 16, 2025 / Presidential Documents

Executive Order 14366 of December 11, 2025

Protecting American Investors From Foreign-Owned and Po-

litically-Motivated Proxy Advisors

By the authority vested in me as President by the Constitution and the

laws of the United States of America, it is hereby ordered:

Section 1. Purpose. Unbeknownst to many Americans, two foreign-owned

proxy advisors, Institutional Shareholder Services Inc. and Glass, Lewis

& Co., LLC, play a significant role in shaping the policies and priorities

of America’s largest companies through the shareholder voting process. These

firms, which control more than 90 percent of the proxy advisor market,

advise their clients about how to vote the enormous numbers of shares

their clients hold and manage on behalf of millions of Americans in mutual

funds and exchange traded funds. Their clients’ holdings often constitute

a significant ownership stake in the United States’ largest publicly traded

companies, and their clients often follow the proxy advisors’ advice.

As a result, these proxy advisors wield enormous influence over corporate

governance matters, including shareholder proposals, board composition,

and executive compensation, as well as capital markets and the value of

Americans’ investments more generally, including 401(k)s, IRAs, and other

retirement investment vehicles. These proxy advisors regularly use their

substantial power to advance and prioritize radical politically-motivated

agendas—like ‘‘diversity, equity, and inclusion’’ and ‘‘environmental, social,

and governance’’—even though investor returns should be the only priority.

For example, these proxy advisors have supported shareholder proposals

requiring American companies to conduct racial equity audits and signifi-

cantly reduce greenhouse gas emissions, and one continues to provide guid-

ance based on the racial or ethnic diversity of corporate boards. Their

practices also raise significant concerns about conflicts of interest and the

quality of their recommendations, among other concerns. The United States

must therefore increase oversight of and take action to restore public con-

fidence in the proxy advisor industry, including by promoting accountability,

transparency, and competition.

Sec. 2. Protecting Investors from Politicized Advice. (a) The Chairman of

the Securities and Exchange Commission (SEC) shall review all rules, regula-

tions, guidance, bulletins, and memoranda relating to proxy advisors. Con-

sistent with the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq.),

the SEC Chairman shall consider revising or rescinding those rules, regula-

tions, guidance, bulletins, and memoranda that are inconsistent with the

purpose of this order, especially to the extent that they implicate ‘‘diversity,

equity, and inclusion’’ and ‘‘environmental, social, and governance’’ policies.

(b) Consistent with the APA, the SEC Chairman shall consider revising

or rescinding all rules, regulations, guidance, bulletins, and memoranda

relating to shareholder proposals, including Rule 14a–8 (17 CFR 240.14a–

8), that are inconsistent with the purpose of this order.

(c) The SEC Chairman shall:

(i) enforce the Federal securities laws’ anti-fraud provisions with respect

to material misstatements or omissions contained in proxy advisors’ proxy

voting recommendations;

(ii) assess whether to require proxy advisors whose activities fall within

the scope of the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et

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seq.) and the rules promulgated thereunder, to register as Registered Invest-

ment Advisers;

(iii) consider requiring proxy advisors to provide increased transparency

on their recommendations, methodology, and conflicts of interest, espe-

cially regarding ‘‘diversity, equity, and inclusion’’ and ‘‘environmental,

social, and governance’’ factors;

(iv) analyze whether, and under what circumstances, a proxy advisor

serves as a vehicle for investment advisers to coordinate and augment

their voting decisions with respect to a company’s securities and, through

such coordination and augmentation, form a group for purposes of 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 examine whether the practice of Registered Invest-

ment Advisers engaging proxy advisors to advise on (and following the

recommendations of such proxy advisors with respect to) non-pecuniary

factors in investing, including, as appropriate, ‘‘diversity, equity, and inclu-

sion’’ and ‘‘environmental, social, and governance’’ factors, is inconsistent

with their fiduciary duties.

Sec. 3. Unfair, Deceptive, or Anticompetitive Practices. (a) The Chairman

of the Federal Trade Commission (FTC), in consultation with the Attorney

General, shall review ongoing State antitrust investigations into proxy advi-

sors and determine if there is a probable link between conduct underlying

those investigations and violations of Federal antitrust law.

(b) The FTC Chairman, under the authorities provided in the Federal

Trade Commission Act (15 U.S.C. 41 et seq.) and in consultation with

the Attorney General, as appropriate, shall investigate whether proxy advisors

engage in unfair methods of competition or unfair or deceptive acts or

practices that harm United States consumers by:

(i) conspiring or colluding, explicitly or implicitly, to diminish the value

of consumer investments (including pensions and retirement accounts);

(ii) failing to adequately disclose conflicts of interest;

(iii) providing misleading or inaccurate information;

(iv) undermining the ability of consumers to make informed choices; or

(v) otherwise engaging in conduct that violates the antitrust laws as defined

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, consistent with the APA, take steps to revise all regulations and

guidance regarding the fiduciary status of individuals who manage, or, like

proxy advisors, advise those who manage, the rights appurtenant to shares

held by plans covered under the Employee Retirement Income Security

Act of 1974 (ERISA) (29 U.S.C. 1001 et seq.), including proxy votes and

corporate engagement, consistent with the policy of this order. The Secretary

of Labor shall consider whether these proposed revisions should include

amendments to specify that any individual who has a relationship of trust

and confidence with their client, including any proxy advisor, and who

provides advice for a fee or other compensation, direct or indirect, with

respect to the exercise of the rights appurtenant to shares held by ERISA

plans, is an investment advice fiduciary under ERISA.

(b) The Secretary of Labor shall take all appropriate action to strengthen

the fiduciary standards of pension and retirement plans covered under ERISA.

Such action shall include assessing whether proxy advisors act solely in

the financial interests of plan participants and the extent to which any

of their practices undermine the pecuniary value of the assets of ERISA

plans.

(c) The Secretary of Labor shall take all appropriate action to enhance

transparency concerning the use of proxy advisors, particularly regarding

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‘‘diversity, equity, and inclusion’’ and ‘‘environmental, social, and govern-

ance’’ investment practices.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed

to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency,

or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget

relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent 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, its officers,

employees, or agents, or any other person.

(d) The costs for publication of this order shall be borne by the Department

of Labor.

THE WHITE HOUSE,

December 11, 2025.

[FR Doc. 2025–23093

Filed 12–15–25; 11:15 am]

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