LONDON, U.K. (19 February 2018) – Institutional Shareholder Services Inc. (ISS), the leading provider of end-to-end governance and responsible investment solutions to the global financial community, today released its updated 2018 benchmark Proxy Voting Guidelines for South Africa. This updated policy will apply for shareholder meetings of South African companies held on or after Apr. 1, 2018, and includes changes to support investors exercising recently separated ‘Say on Pay’ voting rights on the remuneration policy and remuneration implementation report.
The separation of the two pay-related votes was first signaled to the market with the release of The King IV Report on Corporate Governance for South Africa (“King IV”), the fourth iteration of South Africa’s corporate governance code, in November 2016. Although issuers are still within the grace period before the adoption of King IV becomes compulsory, a change to the JSE Listings Requirements in June 2017 has brought forward the effective date for the separation of the two say-on-pay votes.
“We were pleased with the many thoughtful comments received from our institutional investor clients, companies, and other market participants during the last year, including during our recent consultation on ISS’ policy updates for South Africa, undertaken as part of our annual global policy development process,” said Georgina Marshall, ISS’ Global Head of Research, “Broad feedback is a fundamental part of ensuring our policies are kept relevant and up to date, as financial markets and good governance practices evolve.”
The revised ISS policy approach to executive pay in South Africa retains the main underlying principles of the previous ISS guidelines, now reorganized and updated to fit the new regulatory environment. New areas include the provision to recommend voting against the re-election of members of the remuneration committee in the event of any serious breaches of good practice on executive pay. This reflects the position of many investors that the remuneration committee should be held accountable in such circumstances, and generally aligns ISS’ South Africa policy with its policies for many other markets, including the US, Continental Europe and the UK & Ireland.
For additional details on ISS’ 2018 benchmark proxy voting guidelines for South Africa and for other ISS 2018 benchmark policies, please visit the ISS Policy Gateway.
