ISS’ research teams interact regularly with company representatives, institutional shareholders, shareholder proponents and other parties in order to gain deeper insight into many issues and to check material facts relevant to our research. Topics discussed can range from general policy perspectives to specific voting items. As a research organization, we welcome constructive dialogue on critical issues that helps to ensure a full understanding of the facts and circumstances, which will in turn inform our research analyses and voting recommendations.
In order to ensure consistency, transparency, and quality in our interactions with issuers, industry groups, shareholder proponents and other financial market stakeholders, ISS has a set of principles that guide our engagement. Our goals are to facilitate productive and informative dialogue, and to help all stakeholders understand what they may expect from engaging with us.
In the United States, we have instituted a formal liaison role to facilitate the engagement process. Bimal Patel, a veteran governance researcher and business leader with more than 15 years’ experience with ISS, acts as the primary liaison between ISS and market stakeholders who wish to engage on governance issues.
ISS analysts will engage with corporate issuers, dissident shareholders, and sponsors of shareholder proposals wherever we consider that doing so will assist in producing high quality research reports for our clients. The purpose of such discussions for ISS is 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 such dialogue is initiated by ISS, while other times it is initiated by the issuer or shareholder. In contested situations, we ordinarily seek to engage with both sides. Issuers or proponents seeking to engage with ISS are requested to first provide a proposed agenda: this is essential to determine which ISS analysts should take part and to enable analysts to prepare so that the engagement can be productive for all participants. Notably, during the annual meeting season, in-person meetings are typically limited to contentious issues, including contested mergers, proxy contests, or other special situations, while engagement on other topics is handled telephonically.
Such determinations are made at the discretion of ISS, balancing the potential benefits of an in-person meeting with the added time commitment and the challenge of coordinating schedules. Telephone calls are generally as productive as face-to-face meetings, and can be a more efficient use of time for all participants. In contested situations, both sides will generally be offered an equal opportunity for engagement.
For non-contentious situations, it is at the analysts’ discretion whether to engage with the company after it has filed its proxy or published its other relevant meeting materials; they generally will do so to clarify points on which there are 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 or other publicly disclosed materials and should be clearly communicated therein.
Providing ISS with specific company contact information can be useful so that if analysts have questions, they can quickly contact the appropriate person. In the US, the Research Helpdesk is the appropriate point for providing any specific contact information. In other markets, company contact information can be provided via the ISS contact points given below.
If there are particular points you want to be sure our analysts are aware of (for example, corporate governance changes the company has undertaken, or disclosures that may not be clear or easily found), you may wish to send details by email to the relevant ISS analyst if already known or to the ISS contact point provided (for example, the Research Helpdesk) outlining the points you wish to make and with proxy pages or other sources noted. This can be helpful for ISS and our clients, and so we welcome such clarifications to the extent they can assist our analysis for shareholders.
Please note that any material information provided must be public (in the proxy statement or other disclosed materials) in order to be used in our research.
Participants can expect an informed dialogue with experienced ISS representatives on matters of relevance to our research and recommendations, and which may also include information about ISS’ policies and procedures. Further, participants can expect that ISS wishes to have the most complete and accurate information upon which to base our research and recommendations to our clients. For this reason, when information is provided verbally during discussions that is considered material to our research, we may also request final written confirmation to ensure accurate representation of an issuer’s or proponent’s views.
No. Issuers who are ICS clients may not disclose 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 proposal of an issuer whether or not that issuer has purchased products or services from ICS. In order to avoid any appearance of conflict, ISS analysts have no access to information about ICS clients, and we require that in any communication you may have with ISS analysts, you do not disclose your identity as an ICS client or potential client, to help 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 at the time we analyze their voting proposals, through their publicly filed disclosures and other public information available to shareholders. Therefore, while we can discuss our policies and the rationale behind them, we cannot and do not say what would be required to obtain a “for” recommendation. To promote transparency and best practices, our policies are posted publicly on our website, (see the ISS Policy Gateway.). However, application of those policies in specific cases requires an analysis, not only of the exact details and 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 undertaken. We cannot and will not disclose or guarantee any future vote recommendation.
No. ISS research and recommendations are based exclusively on public information, so any fact which an issuer would like to see reflected in our report should be publicly disclosed to all shareholders 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 with ISS, or makes a commitment with respect to future actions or behavior, that should be promptly disclosed in a Form 8-K or equivalent public filing or disclosure. In proxy contests and similar situations, we expect both management and dissidents to publicly file any materials presented to ISS.
Any material non-public information that is disclosed, intentionally or unintentionally, will not be considered or included in our research reports.
ISS has robust policies and procedures to ensure the integrity of our research process. ISS is a Registered Investment Advisor with the U.S. Securities & Exchange Commission, and as such has a comprehensive global compliance program (please check this link for disclosure of our relevant policies and procedures).
ISS also undertakes and is subject to periodic SSAE-16 audits. ISS’s research and recommendations are also based on public information and on our publicly disclosed and detailed ISS policy guidelines which are available and transparent to all parties.
Yes. Where relevant, the overall point of view of participants as well as any substantive information will be reflected in our research reports, particularly when the information is considered useful in helping our institutional clients make the most informed voting decisions. In some instances, ISS may consider including direct quotes from statements made by participants in the meeting. Our reports also ensure that clients are aware of engagement that has taken place with ISS and has informed our research. At the discretion of ISS, an engagement summary is also generally included in our research reports, outlining dialogue that has taken place with all parties.
There is no entitlement to review our research reports prior to publication to our clients, but draft reports are provided in certain markets as a courtesy and at the sole discretion of ISS, in order to allow an issuer to check the factual information prior to publication. For example, 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, and for France, the process is set out in our Engagement and Draft Report Disclosure Policy for the French Market.
To ensure consideration can be given to any review responses within the often tight publication deadlines for our reports, any comments should be sent back to ISS by e-mail, although companies are welcome to provide a hard copy as well. Note that this is not an opportunity for the issuer to lobby for a particular voting recommendation, but to check the facts that are being included in our report. Procedures for providing draft reports to companies vary on a market-by-market basis, and in any case, no drafts will be provided in markets or situations where there is insufficient time to do so whilst still respecting our clients’ voting deadlines.
For all markets, ISS does not normally allow pre-publication 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 contentious or controversial nature. This policy is intended to safeguard the independence of our process and recommendations.
Yes. An issuer may always request a copy of the ISS report on its own shareholder meeting after it has been published to ISS clients, and there is no charge for this.
Significant factual errors are rare in our reports but ISS always strives to be as accurate as possible. If you believe our report contains an error, please notify us immediately. If we agree that there is a material error that should be brought to our clients’ attention, we will promptly issue an “Alert” report to all our relevant clients.
If you would like to request a meeting with ISS or if you have any further questions regarding ISS’ engagement process, contact GlobalResearch@issgovernance.com.