Institutional Shareholder Services (ISS) released its Annual Policy Survey​ on Monday, July 22, 2019. In a change from prior years, all questions are being asked in a single survey this year. Like prior years, ISS will have a public comment period on proposed changes to policies before the final changes are published later in 2019. The survey will close on Friday, August 9, 2019 at 5 p.m. ET. 
The topics covered for the U.S. market are listed below:
  • Board Gender Diversity – ISS is asking organizations for their views on the importance of board gender diversity. Additionally, for its new board diversity policy that becomes effective in 2020, ISS is seeking input on what factors might mitigate its recommendation to vote against the nominating committee chair at Russell 3000 and/or S&P 1500 companies that do not have at least one woman on the board.
  • Director Overboarding – Some large institutional investors have recently adopted stricter overboarding policies​, ISS is seeking input on the appropriate board seat limits in cases of both non-executive and CEO directors.
  • Combined CEO/Chair – With many shareholders considering a lead independent director as an acceptable alternative to an independent Chair, ISS is seeking input on what factors might strongly lead investors to advocate for the need to have an independent Chair.
  • Sunsets on Multi-Class Capital Structures – ISS is seeking input on the length of time that is appropriate for time-based sunset provisions.
  • Quantitative Pay-for-Performance – Starting in 2020, ISS plans to use Economic Value Added (EVA) as a secondary pay-for-performance screen for Financial Performance Assessments (FPA) replacing GAAP-based metrics. FPA is used to assess companies where ISS’s primary pay-for-performance screens indicate a borderline result between Low and Medium concern levels. ISS is asking whether prior-used GAAP-based metrics should continue to be reported. 
  • Director Accountability for Failure to Assess and Mitigate Climate Change Risk – ISS is seeking to understand whether organizations view climate change as a high priority component of their risk assessments of companies, and what actions may be appropriate for shareholders to take at companies that are not effectively reporting or addressing climate change risks.

ISS's policy survey represents an opportunity for your voice to be heard in its benchmark proxy voting policy-making process. If you're a Georgeson client, we're happy to submit feedback to ISS on your behalf in addition to or in place of an Annual Policy Survey response. Please contact your Account Executive.

If you have questions, please email Rajeev Kumar, CFA, Managing Director, Georgeson and former Director of U.S. Research at ISS.