Institutional Shareholder Services (ISS), a leading provider of institutional shareholder services, annually revisits its Benchmark and Specialty policies to ensure they reflect the evolving landscape of corporate governance. These comprehensive reviews allow ISS to consider updates for the upcoming proxy season, taking into account legal and regulatory changes, and emerging issues relevant to investors and their portfolio companies.
In the United States, recent discourse has significantly amplified the focus on diversity, equity, and inclusion (DEI) practices. This increased attention includes recent Presidential Executive Orders addressing DEI. It is anticipated that institutional investors and U.S. corporations hold diverse viewpoints on DEI, particularly concerning the adaptation of company policies and practices in response to market dynamics and governmental actions.
Considering these developments and the varied perspectives on DEI, Institutional Shareholder Services has decided to indefinitely pause the incorporation of specific diversity factors in its voting recommendations for directors at U.S. companies. This adjustment applies to both its Benchmark and Specialty policies. Effective for shareholder meeting reports published on or after February 25th, ISS will no longer assess the gender and racial and/or ethnic diversity of a company’s board when formulating vote recommendations for the election or re-election of directors at U.S. companies. This change impacts recommendations made under ISS’s Benchmark and Specialty policies.
Evaluations and vote recommendations concerning directors of U.S. companies will continue to be based on other established criteria within the Benchmark and Specialty voting guidelines. These enduring considerations include director independence, accountability, and responsiveness, ensuring a robust assessment framework. Further details on these guidelines are accessible through the ISS Policy Gateway.
Institutional Shareholder Services remains committed to the ongoing review of its Benchmark and Specialty guidelines, adapting its approach as necessary to reflect the evolving needs of institutional investors and the corporate governance landscape.
