To ensure its voting policies take into consideration the perspectives of the corporate governance community and the views of its institutional clients, ISS gathers broad input each year from institutional investors, issuers, and other market constituents through a variety of channels and mediums.
Following the release of its global policy survey results, ISS is making available for public comment 17 discrete voting policies for applicable for shareholder meetings occurring on or after Feb. 1, 2021. The policy comment period closes on Oct. 26 at 5pm ET.
Unless otherwise specified in writing, all comments will be disclosed publicly upon release of final policies, which is expected during the first half of November.
Through the comment period, ISS is requesting feedback from all interested market constituents on 17 proposed new policies or potential policy changes, including:
- Board Diversity, Race and Ethnicity (U.S.): Beginning in 2022, at companies where there are no identified racial or ethnically-diverse board members, the proposed ISS U.S. policy will be to recommend voting against the chair of the nominating committee (or other relevant directors on a case-by-case basis). Mitigating factors will be considered and the proposed coverage universe is all companies in the Russell 3000 and S&P 1500 indexes.
- Board Diversity, Gender (Canada, UK, Ireland, Continental Europe, Latin America): Changes are proposed to raise the existing minimum board gender diversity policy thresholds for companies in a number of markets on a market-specific basis, to be implemented in 2021 and 2022.
- Board Composition (Latin America, Russia, Japan): In the main Latin American markets, policy changes are proposed to increase minimum board independence thresholds. In Russia, a broad range of information on a director’s independence classification for candidates proposed by minority shareholders will be used. In Japan, there is a proposed new minimum expectation on outsider directors for companies with a statutory auditor structure and a proposed new policy applying to companies which have significant cross shareholdings.
- Director Accountability (All global policies): ISS policies globally will explicitly note that significant risk oversight failures related to environmental and social concerns may, on a case-by-case basis, trigger vote recommendations against board members.
- Director Overboarding (Continental Europe): proposal to extend the current ISS Continental European director overboarding policy thresholds to all European companies instead of just to widely-held companies as at present.
- Shareholder Litigation Rights (U.S. and Canada): ISS proposes modifications in the U.S. policy, and addition of language codifying the Canadian policy regarding management proposals to establish exclusive forums.
- Disclosure (Continental Europe): ISS is proposing to establish minimum remuneration disclosure expectations in line with new regulatory requirements across Europe.
- Capital Issuances for Investment Companies (U.K./Ireland): ISS proposes a policy change to recommend support for share issuance requests when trusts provide an explicit commitment that shares will only be issued above net asset value, in alignment with the Pre-Emption Group for investment companies in the UK and Ireland.