Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors
12/11/2025
Action Summary
- Purpose: Address excessive influence of two foreign-owned proxy advisors in U.S. corporate governance and protect investors from politically motivated, non-financial agendas such as “diversity, equity, and inclusion” and “environmental, social, and governance.”
- Oversight of Proxy Advisors:
- SEC Chairman to review and potentially revise or rescind rules and guidance related to proxy advisors and shareholder proposals that conflict with the order’s purpose.
- Enforce anti‑fraud provisions and assess the need for proxy advisors to register as Registered Investment Advisers.
- Increase transparency on proxy advisors’ recommendations, methodologies, and potential conflicts of interest.
- Examine coordination practices among investment advisers using proxy advisors.
- Antitrust and Consumer Protections:
- FTC Chairman, in consultation with the Attorney General, to review state antitrust investigations regarding proxy advisor practices.
- Investigate potential unfair, deceptive, or anticompetitive practices that could harm U.S. consumers and diminish the value of investments, including pensions and retirement accounts.
- Protection of Pensions and Retirement Plans:
- Secretary of Labor to revise ERISA-related regulations and guidance concerning the fiduciary duties of those advising on proxy votes.
- Enhance fiduciary standards and transparency regarding proxy advisors’ roles in managing retirement plan investments.
- General Provisions:
- Clarification that the order does not alter the authority of executive departments, the Office of Management and Budget, or create enforceable rights against the United States.
- Implementation subject to applicable law and appropriations; publication costs to be borne by the Department of Labor.
Risks & Considerations
- The Executive Order’s push for increased oversight and accountability of proxy advisors may impact Vanderbilt University’s endowment and retirement plans if investment strategies need to align with new federal guidelines. Changes in proxy advisor practices could influence the university’s investment decisions, potentially affecting returns.
- Focus on reducing influence of “diversity, equity, and inclusion” and “environmental, social, and governance” factors may conflict with Vanderbilt’s institutional commitments to these areas, creating potential reputational risks.
- Increased regulatory scrutiny could lead to shifts in the financial markets that might affect university funding streams, including grants and donations, due to changes in corporate behaviors and priorities.
- Potential changes in the investment landscape due to the order may require Vanderbilt’s Financial and Investment offices to reassess risk management strategies and engagement with proxy advisors.
Impacted Programs
- Owen Graduate School of Management could see increased demand for research and expertise in corporate governance and compliance as businesses adjust to new regulations.
- Vanderbilt’s Investment Office might need to evaluate its engagement with proxy advisors and adjust strategies to align with any new SEC guidelines.
- Programs focused on sustainability and corporate responsibility might need to adapt their curriculum to address changes in the regulatory environment concerning ESG practices.
- Vanderbilt’s Law School may see opportunities to expand courses related to corporate law, securities regulation, and the impact of federal policies on corporate practices.
Financial Impact
- The shift in proxy advisor regulations could influence the investment strategies of entities managing the university’s endowment and retirement plans, possibly affecting long-term financial performance.
- Vanderbilt might experience changes in funding opportunities if federal funds prioritize different areas due to shifts away from diversity and ESG considerations.
- Adjustments in proxy advisory practices could lead to variations in corporate behaviors, potentially impacting the university’s partnerships and financial collaborations with industries.
Relevance Score: 3 (Moderate risks involving compliance and potential shifts in financial strategies.)
Key Actions
- Vanderbilt Law School should analyze the potential impacts of increased SEC oversight on proxy advisors, specifically regarding “diversity, equity, and inclusion” and “environmental, social, and governance” policies. This could impact corporate governance courses and research opportunities.
- The Owen Graduate School of Management should monitor changes in corporate governance regulations and provide insights on how these regulatory shifts might impact company valuations and investment strategies, particularly for students and alumni working in finance.
- Vanderbilt University’s Investment Office should assess the implications of revised fiduciary standards under ERISA on its own investment strategies and endowment management, especially concerning ESG factors.
- The Office of Federal Relations should engage with policymakers to understand how these changes may affect funding opportunities and compliance requirements, ensuring Vanderbilt’s interests are represented in discussions about regulatory changes.
Opportunities
- The executive order presents an opportunity for Vanderbilt’s research centers to explore the broader implications of changes in proxy advisor practices on corporate behavior and investment trends, potentially positioning the university as a thought leader in this area.
- Vanderbilt could lead national conversations on the balance between financial returns and ESG considerations, hosting forums or workshops to discuss the evolving regulatory landscape and its impact on investment strategies.
- Vanderbilt’s Peabody College could expand research into the societal impacts of ESG-focused investment practices, contributing to a deeper understanding of how these practices affect economic and social outcomes.
Relevance Score: 3 (Some adjustments are needed as the order impacts investment and educational strategies related to corporate governance and ESG.)
Timeline for Implementation
N/A: The executive order does not provide specific deadlines or timeframes for the implementation of its directives; it only outlines the actions to be taken without specifying an enforcement period.
Relevance Score: 1
Impacted Government Organizations
- Securities and Exchange Commission (SEC): The SEC is directed to review and potentially revise its rules, guidance, and policies related to proxy advisors, focusing on reducing the political influence in proxy voting and ensuring investor returns remain the primary concern.
- Federal Trade Commission (FTC): The FTC, in consultation with the Attorney General, is tasked with reviewing ongoing antitrust investigations and assessing whether proxy advisors engage in unfair or deceptive practices that may harm U.S. consumers.
- Department of Labor: The Department of Labor must revise regulations and guidance regarding the fiduciary status under ERISA for those managing retirement plans, including addressing how proxy advisors are treated in this context, and will also bear the publication costs of the order.
- Attorney General: Although not assigned new standalone responsibilities, the Attorney General is consulted alongside the FTC to ensure enforcement of anti‐fraud provisions and to assess proxy advisor practices under existing securities and antitrust laws.
Relevance Score: 2 (A small number of Federal Agencies, totaling 4, are directly impacted by the directives in this order.)
Responsible Officials
- Chairman of the Securities and Exchange Commission (SEC) – Tasked with reviewing and potentially revising or rescinding rules, regulations, and guidance relating to proxy advisors, as well as enforcing anti‑fraud provisions and directing SEC staff on matters including transparency related to “diversity, equity, and inclusion” and “environmental, social, and governance” factors.
- Chairman of the Federal Trade Commission (FTC) – Responsible for reviewing state antitrust investigations in consultation with the Attorney General and investigating unfair, deceptive, or anticompetitive practices by proxy advisors.
- Secretary of Labor – Charged with revising regulations and guidance regarding the fiduciary status under ERISA, strengthening fiduciary standards for pension and retirement plans, and enhancing transparency related to proxy advisor practices.
Relevance Score: 4 (The directives affect agency heads, placing significant responsibility on the leaders of major regulatory agencies.)