GRId FAQs for Corporate Issuers

Display allUpdated: March 5, 2012

For Corporate Issuers

1. What has changed in this version of GRId methodology?

   The factors applicable to only the U.S. market have changed in GRId 2.0 to include additional questions incorporating ISS’ new Pay-for-Performance quantitative methodology, additional information on related-party transactions and board relationships, and a more comprehensive evaluation of takeover defenses.  The full list of added questions is available in the Governance Risk Indicators 2.0 technical document.

2. Why does the methodology change?

   The basis of the GRId methodology is the ISS benchmark proxy voting policy guidelines, to ensure it is up-to-date and relevant.  The factors included in GRId 2.0 are intended to provide more comprehensive insight into governance issues. 

3. Are there changes to international markets’ methodologies?

   The focus of GRId 2.0 is on the U.S. methodology.  Updates to the other six current GRId markets (Canada, United Kingdom, France, Netherlands, Germany, and Sweden) will occur following the 2012 proxy season, during the third quarter of 2012.

4. How has the scoring model changed?

   ISS has refined the scoring mechanism to ensure the risk from individual governance practices are properly reflected in the high-level scores and concerns.  Explicit weights have been eliminated and the number of points associated with an answer directly reflects the relative significance of any particular answer within its category.

   The thresholds for concern levels have been standardized and the normalization of scores has been simplified.  Total category scores will fall within a predefined range that is consistent across all categories.  The threshold between low and medium concerns and between medium and high concerns is identical across all categories and across all markets.  Additional details are available in the Governance Risk Indicators 2.0 technical document.    

   GRId 2.0 will also provide the category-level numerical scores, as well as ratings, to better communicate the degree of concern for each company.

5. What additional documentation will explain the methodology?

   The Governance Risk Indicators 2.0 technical document is available at www.issgovernance.com/grid-info and includes GRId 2.0 ratings methodology and scoring updates.

6. When will the free Data Verification site be updated with the new questions and data for review?

   The data verification site will be updated with the GRId 2.0 methodology and data and opened to all issuers covered in the GRId index on February 20, 2012. For additional information about how to verify data via the data verification site, please refer to this document.

7. How to I obtain a free Data Verification log-in for my company?

   Contact support@isscorporateservices.com to obtain a free log-in to the Governance Analytics platform which has GRId Data Verification.

8. Are there any changes to the Data Verification process with the 2012 updates?

   There are no changes to the overall Data Verification process for 2012. Issuers will still obtain log-ins from ISS Corporate Services the same way and fill out the Data Verification form in the same manner.

9. Is there a cutoff for when I can submit GRId Data Verification changes under the current GRId methodology?

   The data verification site can be updated under the current methodology, until February 27.  Data submissions will be reviewed and applied to the current GRId methodology, prior to freezing the GRId scores and data on February 27.

10. When will my tools in GRId Analytics for Corporate Issuers be updated with the new data, under the new methodology?

     

    GRId Analytics’ premium tabs, including the Advanced Search, Quick Search, Sensitivity Analysis, Goal Seek and Peer Comparison tabs will be frozen on February 27, as ISS transitions to GRId 2.0.  GRId analytical tools will be updated and available with the new 2012 GRId indicators as of March 5, 2012.

    Issuers may contact support@isscorporateservices.com if they seek historic score information or details on historic 2010-2011 Goal Seek and Sensitivity Analysis scenarios.

11. What if my company was added to or removed from the Russell 3000 in 2011. Am I covered in GRId?

    The GRId 2.0 coverage universe is the same as the current GRId universe, with the following GRId index update schedule:

    • U.S.: The GRId index for U.S. companies is based on the Russell 3000 index constituents.  The GRId index is locked down once per year in the first week of July, following the major reconstitution of the Russell 3000 index. New companies added to the GRId index in July will be completed by October 1.
    • Canada: The GRId index for Canadian companies is updated four times per year in the first week of March, June, September and December based on the TSX Composite list of constituents.  New companies added to the GRId index will be completed at the time of their next annual meeting or by October 1, whichever come first.
    • France, Germany, Netherlands, Sweden, and the U.K.: The GRId index for French, German, Dutch, Swedish and British companies is updated four times per year in the first week of March, June, September and December, based on the MSCI EAFE index constituents.  New companies added to the GRId index will be completed at the time of their next annual meeting or by October 1, whichever come first.
12. When will my company’s concern levels on Yahoo! Finance change to reflect the 2012 scores?

    The new GRId concern levels will be provided to Yahoo! Finance in ISS’ regular monthly file to Yahoo. The first file with the updated GRId 2.0 data will be provided March 5, 2012. Yahoo! Finance will implement the new levels after that point, although the exact date is TBD.