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As the Trump administration considers measures to rein in proxy advisory firms and depoliticize shareholder proposals, the NAM has stepped up with key recommendations for corporate governance reform.

What’s going on: The NAM this week released a new five-pager detailing specific steps Congress and the Securities and Exchange Commission should take now “to promote capital formation, streamline compliance burdens and depoliticize the proxy process.”

• The document builds on detailed recommendations that the NAM made to the SEC in September.
• It also follows the news last week that the White House may issue at least one executive order that targets the two largest U.S. proxy advisory firms—Institutional Shareholder Services and Glass Lewis—which “exercise outsized influence over public companies and their shareholders,” the NAM said.
• Proxy advisory firms—originally created to offer research and voting recommendations to investors in public companies—operate with almost no SEC oversight despite having significant influence over the voting decisions of institutional investors.
• Earlier this week, the SEC pulled back from its traditional role of resolving disputes over which shareholder proposals may appear on corporate ballots. The SEC plans to propose new rules on this topic in early 2026. NAM members are invited to share their views by completing a joint NAM–Weinberg Center survey on shareholder proposals.

Why it’s important: Antiquated regulatory frameworks make it hard for manufacturers to raise the capital needed to invest, innovate and grow today, the NAM says in the document.

• In addition, “the politicalization of the proxy process in recent years has increased costs dramatically for public companies and made it more difficult for manufacturers to deliver shareholder returns and drive economic growth.”

What should be done: The NAM’s new paper lays out five actions policymakers should take now to protect manufacturers and their shareholders:

• Customize disclosure rules: Tailor regulations to ease compliance burdens on small and medium-sized manufacturers so they can go and remain public.
• Streamline reporting requirements: Ensure that publicly traded manufacturers are only required to report information material to their shareholders.
• Stop activist proxy-ballot hijacking: Prevent activist shareholders from using the shareholder proposal process to promote social and political agendas that are unrelated to long-term business growth or shareholder value.
• Curb proxy advisory firms: Rein in these entities by reaffirming the SEC’s authority to regulate them, require proxy firms to give thorough conflict-of-interest disclosures, place limits on how investors use the firms’ “robo-voting” services and more.
• Boost ownership transparency: Increase companies’ visibility into the identities of their institutional investors by improving the timeliness of Form 13F disclosures.

The final say: “To strengthen America’s manufacturing competitiveness, policymakers must move now to ease unnecessary compliance burdens and restore balance to the proxy process,” NAM Senior Director of Corporate Finance Policy Ted Allen said.