Key Points
- President Trump has ordered a federal review of the two largest proxy advisory firms, ISS and Glass Lewis.
- The order specifically targets the firms’ use of DEI and ESG policies in its recommendations.
- The move is a win for corporate leaders like Elon Musk and Jamie Dimon, who have criticized the firms’ influence.
- The order directs the SEC and FTC to review the firms, signaling increased scrutiny and a potential shift in power on Wall Street.
President Donald Trump has ordered a review of two of the most influential firms on Wall Street—Institutional Shareholder Services (ISS) and Glass Lewis. In a new executive order, Trump directed federal agencies to investigate these companies, which have drawn the anger of corporate titans like Tesla CEO Elon Musk.
These “proxy advisory” firms hold immense power. They advise large investors, such as pension funds, on how to vote on major corporate decisions, including executive pay, board appointments, and mergers. Their recommendations can influence billions of dollars and shape a company’s future.
Trump’s order specifically calls for a review of how these firms use diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) policies in their recommendations.
The White House claims ISS and Glass Lewis use their power to push “radical politically-motivated agendas.” This move is a clear victory for critics such as Elon Musk and JPMorgan CEO Jamie Dimon, who have clashed with the advisory firms over their recommendations in the past.
The order doesn’t change any rules immediately, but it sends a powerful message to the industry. Experts say it will likely make the firms more cautious and could subtly shift the power dynamic back toward corporate boards and away from activist investors.
The order also directs the Federal Trade Commission to investigate the firms for potential antitrust violations. While the outcome is uncertain, the president has officially put these powerful Wall Street players on notice.
