The Trump administration, SEC, and Republican lawmakers have all taken aim at proxy advisers recently. The increased scrutiny could bring changes to the future of corporate governance, which some contend would not be for the better.

While the largest proxy advisers — Institutional Shareholder Services and Glass, Lewis & Co. — are named targets, sources predict the pressure on proxy-advisory firms could discourage smaller advisers from launching, undercut the proxy advice itself, or threaten the infrastructure such firms provide for institutions to cast their votes. Ultimately, given Washington’s wave of activity aimed at the proxy voting process, the scrutiny is part of a broader shift diminishing shareholders’ role in corporate governance, some contended.

With the curtailing of proxy advisers — meaning investors can’t get the advice they seek — and the potential for a lot fewer shareholder proposals, “you’re really seeing a pretty significant narrowing of the role of shareholders in corporate governance, kind of across the board,” said Michael Troncoso, a partner with law firm Robbins Geller Rudman & Dowd….

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