October 24, 2013
Authored by: benefitsbclp
Looking Ahead – ISS 2014 Draft Policies and Proxy Survey Results
Institutional Shareholder Services (ISS) conducts an annual survey to obtain input on corporate governance issues. The survey results are considered by ISS in preparing annual updates to its proxy voting policies. The survey often provides insight into potential ISS policy changes for the upcoming proxy season.
A few weeks ago, ISS released the results of its 2014 proxy voting survey. ISS received more than 500 responses from institutional investors and corporate issuers located within and outside of the United States. The 2013-2014 Policy Survey Summary of Results can be accessed here. This week ISS posted draft 2014 policies for comment here. The draft policies include proposed changes for U.S. companies to Board Response to Majority-Supported Shareholder Proposals and the ISS Pay for Performance Quantitative Screen. The comment period will close on November 4, 2013 and ISS anticipates releasing its final 2014 policy updates in November.
Below are highlights of the survey findings and draft policies covering board decision making and executive compensation matters:
1. Board Responsiveness
Last year ISS announced changes to its policy on board responsiveness to majority-supported non-binding shareholder proposals. The 2014 survey included questions eliciting views on board responsiveness to shareholder mandates and what is a reasonable time-frame for the board’s response. The survey results included mixed views from investors and issuers as to whether the board should implement a specific action to address the shareholder mandate or should be free