Executive Order 14366—Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors
Issued 2025-12-11 by Donald J. Trump
Plain-English Overview
AI-generated summary explaining what this action does, who it affects, and why it matters
This executive order aims to protect American investors from what the administration sees as politically motivated advice coming from foreign-owned proxy advisory firms. These companies, like Institutional Shareholder Services and Glass Lewis & Co., advise large investment funds—including those holding your 401(k)s and IRAs—on how to vote shares in publicly traded companies. Because these firms control a large portion of the market, they significantly influence decisions about corporate governance, such as board composition and executive pay.
The order directs the Securities and Exchange Commission (SEC) to review all of its existing rules and guidance related to proxy advisors. Specifically, the SEC is instructed to revise or eliminate any rules that allow these firms to promote politically-driven agendas, particularly concerning issues like “diversity, equity, and inclusion” and environmental policies. The SEC will also examine whether proxy advisors need to register as investment advisers and increase transparency about their recommendations.
Ultimately, the goal is to restore public confidence in the proxy advisor industry and ensure that investment decisions are based on financial returns, not politically motivated recommendations.
AI-generated summary for educational purposes
Constitutional Analysis
How this action fits (or doesn't) within Article II authority and existing law
Executive Order 14366 addresses "Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors". Executive orders are a long-established exercise of presidential power, used by every President since George Washington. They are grounded in Article II of the Constitution, which vests executive power in the President and directs them to "take Care that the Laws be faithfully executed."
Executive orders cannot create new law, contradict existing federal statutes, or exceed the President's constitutional authority. The legitimacy of any specific order depends on whether it operates within statutory authority Congress has delegated, directs the executive branch on matters within its constitutional purview, or attempts to substitute executive policy for legislative choices. Courts can and do review executive orders for conformity with the Constitution and federal law.
Official Summary
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