Trump order targeting proxy advisers may weaken shareholder rights

A new executive order signed by U.S. President Donald Trump to tighten oversight of proxy advisory firms could significantly weaken shareholder rights and strengthen the power of corporate executives, governance experts and lawyers say.

The order instructs the Securities and Exchange Commission to increase scrutiny of major proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis, which play a key role in guiding how large investors vote in corporate elections. Critics argue the move could make it harder for shareholders to pressure companies on issues such as executive pay, board accountability and environmental or social risks.

The White House says the measure is intended to curb politically motivated agendas and refocus investors on maximizing returns. Business groups welcomed the move, while investor advocates warned it could reduce transparency and undermine long-term shareholder engagement.