ISS

Davis Polk Discusses SEC’s Final Rules on Proxy Advisory Firms

By Ning Chiu, Nicole Brookshire, Joseph A. Hall, Michael Kaplan and Richard D. Truesdell Jr. July 21, 2022 by renholding

When the SEC adopted the rules governing proxy advisory firms two years ago, then-Chair Clayton emphasized that the rules were “the fruits of a rigorous and well-functioning rulemaking process where final rules reflect and benefit from the input of a …

The Need for Engaged Governance During Existential Crises: The Case of Aerojet Rocketdyne

By Eric Talley June 22, 2022 by renholding

Engaged shareholder voting is often perceived as the linchpin of sound corporate governance. That reputation is well deserved: Even as corporate governance has broadened its sights of late to accommodate a wider set of stakeholders, the pivotal role of shareholders …

Why Do Companies Going Public Choose Controversial Governance Structures, and Why Do Investors Let Them?

By Laura Field and Michelle Lowry June 21, 2022 by renholding

Over the past three decades, there has been increasing concern about how corporate governance structures such as classified boards and dual class stock entrench managers, reduce director effectiveness, and reduce firm value. Likely as a result, mature firms have increasingly …

Wachtell Lipton Discusses Board Oversight of ESG and the 2022 Proxy Season

By David M. Silk, Sabastian V. Niles and Carmen X.W. Lu April 4, 2022 by renholding

Last year’s proxy season saw investor support for an unprecedented number of ESG proposals, on issues ranging from climate change to human capital management to diversity, equity and inclusion.  Proxy advisory firms increasingly recommended that shareholders vote for such proposals.  …

Cahill Gordon Discusses Proxy Advisers’ Voting Guidelines for 2022

By Helene R. Banks, Geoffrey E. Liebmann, Kimberly C. Petillo-Décossard, Glenn J. Waldrip, Jr. and Sarah Klein-Cloud January 17, 2022 by renholding

Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. (Glass Lewis) have each issued their respective proxy voting guidelines for 2022, which include a number of noteworthy revisions, summarized below. The ISS updates are available here and will apply …

ISS Discusses $4 Billion in Settlements Expected to Kick-Off 2022

By Jeff Lubitz January 13, 2022 by renholding

As 2021 came to a close, the final tally of new U.S. shareholder class action complaints declined for the second straight year (this followed a record number of new cases from 2017 – 2019). Industry experts point to three factors

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Wachtell Lipton Discusses ISS Final Voting Policies for the 2022 Proxy Season

By Andrew R. Brownstein, Andrea K. Wahlquist, Sabastian V. Niles, Justin C. Nowell and Ram Sachs December 14, 2021 by renholding

Institutional Shareholder Services (ISS) recently released its final U.S. voting policies, which largely track previously proposed policies and become effective for shareholder meetings held on or after February 1, 2022.  Glass Lewis released its final U.S. voting policies for the …

Milbank Discusses SEC Guidance on Shareholder Proposals and the Way to Regulate Climate Change

By Neil Whoriskey November 24, 2021 by renholding

As a result of the SEC’s most recent Staff Legal Bulletin[1] (“SLB”), shareholder proposals that focus on a “significant social policy” will not be excludable simply because the policy issue is not, in fact, “significant” to the company receiving …

Wachtell Lipton on Dealing with Activist Hedge Funds and Other Activist Investors

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Sabastian V. Niles and Anna Dimitrijević October 13, 2021 by renholding

Despite a short dip at the outset of the pandemic, activism has rebounded and now continues at an ever-growing intensity.  As we have previously noted, regardless of industry, size or performance, no company should consider itself immune from activism.  No …

McMillan Discusses Key Considerations in Implementing Shareholder Votes on Climate

By Ravipal S. Bains, Gavyn Backus and Andjela Sabet August 2, 2021 by renholding

As the momentum of shareholder engagement on climate-related matters continues to grow across the globe, including in Canada, these issues remain a key focus area for public companies. One of the tools that has gained prominence is the so-called “Say …

Does Proxy Advice Allow Funds to Cast Informed Votes?

By John G. Matsusaka and Chong Shu July 22, 2021 by renholding

Our examination of the votes cast by 155 mutual funds on over 6 million corporate election items during 2004-2017 led us to a surprising conclusion: We found that Institutional Shareholder Services’ (ISS) proxy advice did not lead funds to vote …

Creating Controversy in Proxy Voting Advice

By Andrey Malenko, Nadya Malenko and Chester S. Spatt June 14, 2021 by renholding

Proxy advisory firms have emerged as major players in corporate governance by helping to address the public goods aspects of information production in corporate governance. These firms provide both a) recommendations on how to cast proxy votes and b) research …

The Politics of Institutional Shareholder Voting: Transparency Before Reform

By Isabel Verkes August 13, 2020 by renholding

On July 22, the SEC finalized a sweeping rule change to enhance the transparency around the role of proxy advisers. This follows an earlier proposal to reform the process for including shareholder proposals in a company’s proxy statement.^[1] These …

The New Civil Code: ISS and Glass Lewis as Lawmakers

By Neil Whoriskey July 28, 2020 by renholding

ISS and Glass Lewis have arrogated to themselves the power to make law, promulgating a civil code of astounding breadth and detail, ruling over decisions on board composition, director qualifications, term limits, majority voting standards, executive compensation, capital structure, poison …

The Competitive Landscape of the Proxy Advice Market

By Chong Shu June 25, 2020 by renholding

Despite long-standing efforts to understand the proxy advice market, there is no way to identify the firms that supply specific investors with proxy advice, making claims about market shares conjectural at best. Nevertheless, it is widely believed that ISS and …

Why Proxy Advice Might Be Slanted

By John G. Matsusaka and Chong Shu April 30, 2020 by renholding

In the last two decades, the proxy advice market has consolidated into two companies that some believe control as much as 97 percent of that market, leaving little diversity in available advice. The companies, ISS and Glass Lewis, are opaque …

ISS Surveys Regulatory Landscape of Annual Meetings and Covid-19

By Michael Laff April 8, 2020 by renholding

In response to the COVID-19 pandemic, securities regulators in several countries have published guidance that affords publicly listed companies greater flexibility regarding the type of annual general meeting (AGM) they can hold as well as when it can be held.…

Why the SEC Proposal to Regulate Proxy Advisors Is Flawed

By Ken Bertsch February 19, 2020 by renholding

[Editor’s Note: This and the piece that immediately follows offer a point/counterpoint on the SEC’s proxy advisor proposal.] The Council of Institutional Investors opposes the SEC’s proposal to create a new regulatory structure for proxy advisory firms.[1]…

Why the SEC’s Proposed Rules on Proxy Advisors Are Necessary

By Bernard S. Sharfman February 19, 2020 by renholding

The Securities and Exchange Commission’s (SEC’s) recently proposed Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice are an efficient and necessary response to the “collective action” problem that is imbedded in the shareholder voting of public companies …

Cahill Gordon Discusses Glass Lewis and ISS 2020 Voting Guidelines

By Helene R. Banks, Geoffrey E. Liebmann, Ross Sturman, Joseph E. Cho and Tina M. Davis December 10, 2019 by renholding

Both Glass, Lewis & Co. (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”), the leading providers of corporate governance and proxy advisory services, have now published their 2020 proxy voting guidelines.  The Glass Lewis guidelines[1] will take effect for …