Engaging with ISS
Process for Engagement on Proxy Voting Matters
Updated July 2012
ISS' proxy research team often interacts with company representatives, institutional shareholders, shareholder proponents and other parties in order to gain deeper insight into key issues. The issues discussed can range from general policy perspectives to specific voting items. As a research organization, we encourage constructive dialogue on critical issues to ensure a fuller understanding of the facts and circumstances, which will in turn enrich and inform our proxy analysis and recommendations.
In order to ensure consistency, transparency, and quality in its interactions with issuers, industry groups, shareholder proponents and other financial market stakeholders, ISS has developed the following principles to guide its engagement on issues of concern to its institutional investor clients. Our goal is to facilitate productive dialogue on these issues and help all stakeholders understand what to expect.
In the Americas, we have also instituted a formal liaison role to facilitate the engagement process. Marc Goldstein, a veteran governance researcher and business leader with over 12 years' experience with ISS, will act as the primary liaison between ISS and market stakeholders who wish to engage on governance issues.
For France, please see our Engagement and Draft Report Disclosure Policy for the French Market.
The Engagement Process – Frequently Asked Questionsview all
ISS analysts will engage with corporate issuers, dissident shareholders, and sponsors of shareholder proposals, where we believe that doing so will enable us to produce higher quality research reports for our clients. The purpose of such engagement is for ISS to obtain, or communicate, clarification about governance and voting issues, in order to ensure that our research and policy-driven recommendations are based on the most comprehensive and accurate information available. Sometimes these conversations are initiated by ISS, and sometimes they are initiated by the issuer or shareholder. In contested situations, we ordinarily engage with both sides. Conversations may be held in person or via teleconference.
Such determinations are made at the discretion of the analysts, balancing the potential benefits of an in-person meeting with the added time commitment. During proxy season, which in the US runs from roughly February 15 to June 30, analysts will not generally be able to engage with issuers except on contentious issues: mergers, proxy contests, or other non-routine or extraordinary situations. In contentious situations, both sides will be offered the same opportunity for in-person engagement.
For non-contentious situations, it is the analysts' discretion whether to engage further with the company after it has filed its proxy, and they generally only do so to clarify points on which they have questions. ISS analyses are based only on publicly-disclosed information, and all the information needed for shareholders and analysts to make their decisions should be in the proxy.
Providing Research Central with company contact information is very useful so that, if the analysts have questions, they can quickly contact the company.
If there are particular points you want to be sure the analysts are aware of (for example, information relevant to a equity compensation plan that may be buried in a footnote, or corporate governance changes the company has undertaken), please send an email to Research Central with the points outlined and proxy page or other source noted - it will be put in the appropriate meeting folder so the analysts can review it when they are ready to do so.
Please note that any information presented as factual must be public, in the proxy statement or other filing, in order to be included in our research reports.
Participants can expect an informative dialogue with experienced ISS representatives ensuring that the issuer is informed about ISS' policies and procedures, and our view of best practices in corporate governance. Further, an issuer can expect that ISS has the most complete research upon which to base our recommendations to our institutional clients. Whenever possible, we prefer to receive final written responses to questions to ensure accurate representation of an issuer's or proponent's views.
No. Issuers who are ICS clients may not disclose publicly or to an ISS analyst that they have acquired products or services from ICS, per their contract with ICS. ISS does not give preferential treatment to, and is under no obligation to support, any proxy proposal of an issuer whether or not that issuer has purchased products or services from ICS. We request that in any communication you may have with ISS analysts, you do not disclose your identity as an ICS client or potential client, in order to protect the integrity of our research process.
No. ISS research and recommendations are driven by our voting guidelines, as applied to the fact pattern presented by each company we analyze, through their publicly filed disclosures. While we can discuss our policies and the rationale behind them, we cannot simply say what would be required to garner a "for" recommendation. To promote transparency, our policies are posted on the Policy Gateway. However, application of those policies in specific cases requires an analysis, not only of the exact language of the proposal being voted on, but of the context in which that proposal arises; including events such as board decisions, share price movements, legal/regulatory developments, and the actions of shareholders which may not be apparent until the time the analysis is written. We cannot and will not disclose or guarantee any future vote recommendation.
No. ISS analyses are based exclusively on public information, so any fact which an issuer would like to see reflected in our report should be publicly disclosed in a timely fashion; even in markets where such disclosure is not ordinarily required. Where an issuer discusses previously non-public information during an engagement, or makes a commitment with respect to future actions or behavior, that should be promptly disclosed in a Form 8-K or equivalent format. In proxy contests and similar situations, we expect both management and dissidents to publicly file any materials presented to ISS.
As set forth above, ISS analyses are based exclusively on public information. Therefore, any sensitive information that is disclosed, intentionally or unintentionally, will not be considered or included in a research report.
ISS has a host of policies and procedures to ensure the integrity of our research process. ISS is registered as an investment advisor with the US Securities & Exchange Commission, and as such has a comprehensive compliance program (please see our website for detailed policies and procedures). ISS is also subject to periodic SAS-70 audits. ISS's analyses and recommendations are driven by publicly disclosed and detailed policy guidelines in order to ensure their impartiality.
The overall point of view of participants will be reflected in our proxy advisory reports when the information is useful in helping our institutional clients make a more informed voting decision. In those instances, ISS may consider including direct quotes from statements made by participants in the meeting. At the discretion of the analyst, a brief "engagement summary" may be included on the front page of the analysis report.
Draft reports are provided in certain markets as a courtesy by and at the sole discretion of ISS, in order to allow an issuer to fact check the information prior to publication, thus allowing us to provide more accurate reports to our clients. Any comments must be submitted to ISS in the form of an e-mail message, although companies are welcome to provide a hard copy as well. Note that this is not considered an opportunity for the issuer to lobby for a voting recommendation. Procedures for providing draft reports to companies vary on a market-by-market basis, and no drafts will be provided in markets where there is insufficient time between the release of meeting materials and investors' voting deadlines.
In the United States, companies in the S&P 500 index will generally receive a draft report for fact-checking if they have provided contact details; however, ISS does not normally allow preliminary reviews of any analysis relating to any special meeting or any meeting where the agenda includes a merger or acquisition proposal, proxy fight, or any item that ISS, in its sole discretion, considers to be of a controversial nature. This policy is intended to ensure the independence of our process and recommendations. For France, please see our Engagement and Draft Report Disclosure Policy for the French Market.
For annual meetings occurring during "proxy season" (February through June), ISS uses the S&P 500 as of January 31. Following June 30 of each year, ISS updates its list to reflect changes to the index in real time. Companies added to the index after January 31 that hold their meetings prior to June 30 will be eligible for a draft review beginning the following year.
ISS always strives to be as accurate as possible. An issuer may always request a published copy of the ISS analysis of its own shareholder meeting, and there is no charge for the report. If you believe our report contains an error, please notify us immediately. If we agree that there is a material error, we will promptly issue an "Alert" report to our clients.
If you would like to request a meeting with one of ISS' global offices or if you have any questions regarding ISS' engagement process, contact information by individual market is provided below.
Meetings and analyst inquiries
tel: +1 (301) 556-0447
fax: +1 (301) 556-0491
For policy clarification questions:
tel: +1 (301) 556-0576
fax: +1 (301) 556-0491
tel: +44 (0)20 7618 2108
Continental Europe (ex-France)
tel: +32 (2) 674-76-62
tel: +33 1 188.8.131.52
Australia & New Zealand