The Trump administration is considering an executive order to limit proxy advisory firm power, while the FTC investigates potential antitrust violations by firms like ISS and Glass Lewis. This has sparked support from corporate governance experts, who have long criticized the influence and accuracy of these firms.

Proxy advisory firms like ISS and Glass Lewis have faced criticism from figures like Jamie Dimon and Elon Musk, who called them “corporate terrorists.” Their influence has been called into question, with shareholders rejecting their recommendations, highlighting the need for reform in the proxy advisory industry.

Proxy advisory firms have been accused of conflicts of interest, outdated practices, and factual errors. Critics argue that these firms lack governance expertise and rely on flawed checklists, leading to misguided recommendations and potentially harmful outcomes for companies and shareholders. Instances of factual errors have also been highlighted, raising concerns about their credibility.

While proxy advisory firms initially aimed to bring accountability and transparency to corporate governance, they have been criticized for misconduct and excessive influence over time. The continuous change in ownership has raised questions about their ability to provide unbiased and reliable guidance to shareholders. The Trump administration’s scrutiny of these firms has been seen as a positive step towards addressing governance challenges.

Read more at Yahoo Finance: The Trump administration gets it right on limiting the power of proxy advisory firms such as ISS and Glass Lewis