Trump Administration Takes Aim at Duopoly Controlling Corporate Shareholder Votes

President Donald Trump signed an executive order Thursday targeting two financial advisory firms that control more than 90% of the proxy advising market, accusing them of weaponizing their market dominance to force leftist political agendas onto American corporations.

The order specifically names Institutional Shareholder Services and Glass Lewis, firms that wield enormous influence by advising major institutional investors on how to vote on shareholder proposals covering everything from board composition to climate policy. The problem is simple: these firms have abandoned their fiduciary duty to maximize investor returns in favor of advancing progressive political objectives.

“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,” Trump wrote in the executive order.

The facts bear this out. Glass Lewis has published guidelines explicitly recommending votes against corporate boards with fewer than one member from what it calls “an underrepresented community,” which it defines as non-white individuals or sexual minorities. The firm also recommends voting against boards that fail to provide disclosure about their oversight of climate change issues. This is not financial analysis. This is political activism dressed up in corporate language.

ISS has adopted virtually identical guidelines, voting against companies without women on their boards, against boards lacking racial or ethnic diversity, and against companies that have not taken what ISS considers “minimum steps” to address climate change risks. Again, none of this has anything to do with maximizing shareholder value, which should be the sole consideration for any investment advisor worth the name.

The executive order raises additional concerns about conflicts of interest and the quality of these recommendations. When two firms control more than 90% of a market and use that power to push a political agenda rather than serve their clients’ financial interests, that represents a fundamental corruption of the free market system.

Trump’s order directs the Securities and Exchange Commission chair to review all regulations related to proxy advisors and DEI mandates. It instructs the Federal Trade Commission chair to join state investigations into whether these firms are violating unfair trade practices. The attorney general and secretary of labor are also directed to investigate the influence of proxy advising on corporate governance.

This executive action follows concrete legal challenges already underway. Last month, Florida Attorney General James Uthmeier filed a lawsuit against both ISS and Glass Lewis, alleging violations of Florida’s Deceptive and Unfair Trade Practices Act and state antitrust laws. Both firms are currently under Federal Trade Commission investigation regarding how they direct clients on social and climate issues.

The broader principle here matters enormously. Corporate America exists to create value for shareholders, provide quality products and services to customers, and employ workers. It does not exist to advance progressive social engineering projects. When financial advisors abuse their market position to force companies to prioritize racial quotas and climate activism over profitability and innovation, they betray their clients and distort the entire economic system.

The Trump administration is correct to increase oversight, promote transparency, and restore accountability to an industry that has strayed far from its core mission. American investors deserve advisors who work for their financial interests, not advisors who use their money as leverage for political transformation.