President Trump issued an Executive Order on Dec. 11, 2025, relating to the regulation of proxy advisory firms. By itself, the order does not do or change anything. Instead, it directs agencies to reassess existing rules and guidance — meaning we likely will see some changes down the road, but nothing immediate.
The impetus for the order is the notion that 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.”
This order reinvigorates the back and forth of proxy advisor regulations, in which the first Trump administration tightened rules that were then rescinded during the Biden administration.
The executive order directs the U.S. Securities and Exchange Commission (SEC) to evaluate whether proxy advisors should become subject to additional regulation on conflicts-of-interest disclosures, and accountability for factual inaccuracies. The order also instructs the SEC to consider whether proxy advisors facilitate coordinated voting by investors that could cause investors to be a “group” for ownership purposes under the federal securities laws.
We wouldn’t expect SEC action until 2026 addressing these topics and we would further expect the proxy advisors to sue the SEC in response to any action, as they have successfully done in the past.
The order also:
Shareholder proposals are also in the crosshairs of this executive order, particularly those that support ESG or DEI policies. It directs the SEC to review rules and guidance relating to shareholder proposals, including section 14a-8, the authority under which most shareholder proposals are filed.
Earlier this year, the SEC signaled that it will no longer object when companies exclude shareholder proposals from their proxies, and we expect that the SEC will propose rule amendments limiting proponents’ ability to bring such proposals to shareholder votes.
This executive order comes on the heels of what has already been a transformative year for the proxy advisors. Glass Lewis has announced that it will stop issuing benchmark vote recommendations in 2027, and ISS released major changes to its U.S. compensation policies — most notably, that it will treat time-based equity with long vesting periods favorably — in response to some institutional investors’ concerns about over-reliance on performance-based awards. Recognizing the moment, both proxy advisors have announced policy changes that are more friendly to the corporate community, especially around shareholder proposals on environmental and social topics.
Contact your WTW team to discuss how the changing landscape for the proxy advisors will impact your company.
