Archive · 12 Nov 2025
White House Considers Rules to Alter Shareholder Voting Influence
Imagine big companies have lots of owners, called shareholders.
When it's time to make important decisions, like how much to pay the boss or what new projects to start, shareholders get to vote.
Sometimes, it's hard for all the owners to figure out how to vote, so they ask special helpers called 'proxy advisers' for advice.
Big money managers, like BlackRock, who own lots of shares for many people, also vote.
Some important people, like Elon Musk, think these helpers and money managers have too much power and might not always do what's best for the company.
Now, the White House is thinking about making new rules.
They might limit what the helpers can say or how the big money managers vote.
They might also make it harder for regular shareholders to suggest new ideas to vote on.
The goal is to change who has the most say in how companies are run.
The White House is reportedly exploring new measures to curb the influence of proxy advisers and index-fund managers on shareholder voting.
Discussions include potential executive orders that could restrict proxy advisory firms like ISS and Glass Lewis, or limit how large index-fund managers vote.
Critics, including Elon Musk and Jamie Dimon, have accused proxy advisers of conflicts of interest and undue influence.
Major index-fund managers like BlackRock, Vanguard, and State Street collectively own significant stakes in large U.S. companies and tend to vote with management.
The White House is also considering raising requirements for shareholders to submit proposals for a vote, which could reduce the frequency of management-annoying proposals.
- Who
- The White House, proxy advisory firms (ISS, Glass Lewis), major index fund managers (BlackRock, Vanguard, State Street), and corporate CEOs (Elon Musk, Jamie Dimon).
- What
- The White House is exploring new rules that could significantly alter the influence of proxy advisory firms and large index-fund managers in shareholder voting.
- When
- Discussions have been ongoing for weeks, with potential executive orders being drafted. Glass Lewis plans to end certain recommendations in 2027.
- Where
- The United States, concerning publicly traded companies.
- Why
- To curb the influence of proxy advisers and index-fund managers, addressing concerns raised by high-profile CEOs about conflicts of interest and the power of these entities in corporate governance.
Proponents of Current System
Critics of Current System
Role of Proxy Advisers
Proponents of Current System
Proxy advisers like ISS and Glass Lewis provide valuable, independent, and objective advice to asset managers, especially smaller ones who lack the resources to analyze numerous shareholder proposals. They add value for average investors and serve as a defense against client lawsuits.
Critics of Current System
Proxy advisers have conflicts of interest and wield undue influence, effectively forcing boards to adopt certain pay and governance practices. Some critics, like Elon Musk, have used strong language like 'corporate terrorists' to describe them.
Influence of Index Fund Managers
Proponents of Current System
Large index-fund managers like BlackRock, Vanguard, and State Street have investment-stewardship teams that make voting decisions aligned with their fiduciary duties to clients. They offer investor-choice programs, allowing clients to vote themselves.
Critics of Current System
The massive combined holdings of the top three index-fund managers (BlackRock, Vanguard, State Street) give them outsized influence, and they tend to vote with corporate management, making it difficult for activist investors to challenge boards. Some refer to them as a 'cartel'.
Proposed White House Actions
Proponents of Current System
Discussions about potential executive orders are speculative until officially announced. Concerns exist that measures curtailing proxy advisory services would be disruptive to smaller fund managers.
Critics of Current System
The White House is exploring executive orders to restrict proxy advisory firms and limit how index-fund managers vote, potentially banning recommendations or requiring them to mirror client votes. They are also considering raising requirements for shareholders to submit proposals.
- Proxy Advisory Firms
- Institutional Shareholder Services (ISS), Glass Lewis
- Major Index Fund Managers
- BlackRock, Vanguard Group, State Street
- Shareholder Proposal Threshold
- $2,000 in securities for a minimum of three years (current)
- Glass Lewis Change
- Ending 'benchmark' voting recommendations in 2027, focusing on tailored advice.
- Broadridge Financial Solutions
- A newer entrant offering research and voting infrastructure, not proxy voting recommendations.