Trump orders reviews of proxy advisers in latest pressure on financial industry

Core Viewpoint - The executive order signed by U.S. President Donald Trump aims to increase oversight of the proxy advisory industry, specifically targeting firms like Institutional Shareholder Services (ISS) and Glass Lewis for their influence on corporate governance and potential violations of rules related to environmental and social issues [1][2]. Group 1: Executive Order Details - The order directs the U.S. Securities and Exchange Commission (SEC) and other agencies to review the practices of top proxy advisers regarding their treatment of environmental and social issues [1]. - Agencies such as the Federal Trade Commission and the Labor Department are instructed to consider new regulations in response to the order [1]. Group 2: Industry Response and Background - ISS has stated it will review the executive order and consider steps to mitigate any potential adverse impacts on its clients, emphasizing its commitment to operate ethically and independently [4]. - The order is part of a broader conservative effort to limit the influence of proxy advisory firms, which have been criticized by Republican politicians and business leaders for their significant role in corporate governance decisions [2][3]. Group 3: Historical Context - Previous Republican attempts to restrict proxy advisory firms have faced challenges, including court disputes and pushback from asset managers who value the firms for simplifying complex voting decisions [3]. - The order does not address previous expectations from trade groups regarding restrictions on proxy voting by large funds, indicating a shift in focus [3]. Group 4: Ownership Concerns - The foreign ownership of ISS by Germany's Deutsche Boerse and Glass Lewis by Canadian private equity firm Peloton Capital has been highlighted as a concern, aligning with past Republican criticisms [6].