President Donald Trump just declared war on two obscure but powerful financial firms most Americans have never heard of.
According to Daily Wire, Trump signed an executive order on Thursday, targeting Institutional Shareholder Services and Glass Lewis, accusing the proxy advisory giants of weaponizing their market dominance to force leftist ideology onto American corporations through diversity mandates and climate activism.
These two firms aren't exactly household names, but they control more than 90% of the proxy advising market in the United States. That gives them extraordinary influence over how major investors vote on shareholder proposals related to everything from board composition to climate policy.
Glass Lewis recommends voting against boards with fewer than one member from an "underrepresented community," a category that includes non-white people or sexual minorities. The firm also advises against boards that fail to disclose their role in overseeing climate change issues. ISS follows a similar playbook, voting against companies with no women or racial diversity on their boards and opposing those that don't take minimum steps to address climate change risks.
Trump didn't mince words about what he thinks these firms are really doing. "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," he stated.
The executive order directs the SEC chair to review all proxy advisor and DEI-related regulations. It also instructs the FTC chair to join state investigations into potential unfair trade practices by these advisory firms. The Attorney General and Secretary of Labor received marching orders too, tasked with investigating how proxy advising influences American companies.
Trump elaborated on his concerns, pointing out that "these proxy advisors have supported shareholder proposals requiring American companies to conduct racial equity audits and significantly reduce greenhouse gas emissions, and one continues to provide guidance based on the racial or ethnic diversity of corporate boards." Imagine telling investors that skin color matters more than competence or returns.
Florida Attorney General James Uthmeier filed a lawsuit last month against ISS and Glass Lewis under Florida's Deceptive and Unfair Trade Practices Act and antitrust laws. The FTC is currently investigating both firms over how they influence clients on social and climate issues.
In August 2023, the House Judiciary Committee began investigating ISS and Glass Lewis over ties to climate activist groups and efforts to push corporate decarbonization. So this executive order isn't coming out of nowhere—it's the culmination of mounting scrutiny from multiple directions.
Trump raised another valid point that gets lost in the culture war noise. "Their practices also raise significant concerns about conflicts of interest and the quality of their recommendations, among other concerns," he noted.
When two firms control 90% of a market that shapes trillions in investment decisions, conflicts of interest aren't theoretical—they're inevitable. The quality question is equally important: are these recommendations based on rigorous financial analysis or ideological checklists?
Trump concluded that "The United States must therefore increase oversight of and take action to restore public confidence in the proxy advisor industry, including by promoting accountability, transparency, and competition." Translation: break up the duopoly and make them justify their recommendations with actual data.
This executive order represents a significant escalation in the conservative pushback against ESG and DEI in corporate America. For years, progressives have used shareholder activism as a backdoor to implement policy goals they couldn't achieve legislatively.
Whether this executive order will actually change corporate behavior remains to be seen, but it signals that the Trump administration plans to make the fight over workplace ideology a central front in the culture wars.
The era of corporate America quietly going along with progressive demands may be ending.
