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GRId FAQs for Institutional Investors

 

Display allUpdated: February 27, 2012

  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 GRId 2.0 launch and when will company scores be available?

    GRId 2.0 will launch on March 5, 2012.  All companies covered under GRId will be scored under the new methodology. Company information will be available on ISS Link and in GRId data feeds beginning on March 5.    Additionally, proxy research reports on and after March 5 will include GRId 2.0 profiles for companies covered in the GRId index. 

  7. What will happen to the current GRId scores and data?

    ISS will transition from the current version of GRId to GRId 2.0 during February 20 to March 2.  The GRId data, scores and products will be frozen as of February 20 until the launch of GRId 2.0 when data and scores will be available in GRId products on March 5.

  8. How will the GRId 2.0 methodology changes impact data feeds?

    The GRId data feeds will be frozen on February 20, with a static file from February 20 to March 2.  The data feed on March 5 will include the data for GRId 2.0.  The GRId data feed “scores” file will not change.  Category scores and concern levels will be included in the file with no changes in the file format.  The “answers” file will no longer include a value in the WEIGHT column but the file format and structure will be unchanged.  The scoring columns will include the values under the new scoring methodology.

  9. How will the GRId profile reports in ISS Link change?

    The GRId profile reports will include the updated questions and answers on March 5 and the reports will include the category numerical scores as part of the profile output, displayed next to the concern level.

  10. Will there continue to be a Data Verification site for corporate issuers?

    Corporate issuers will continue to have free access to the Data Verification website, where they can view their GRId profile and data.

  11. What is the coverage universe?

    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 annual 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.