Business Roundtable Opposes ISS’s Independent Chair Shareholder Proposal

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By Susan Bokermann

Oct. 30 — In an Oct. 29 letter, the Business Roundtable expressed its opposition to ISS's 2015 proposed voting policy change in how the firm evaluates independent chair shareholder proposals.

ISS's proposed changes include a “more holistic review” of each company's leadership structure, governance practices and financial performance, rather than any one factor determining whether the firm will support the proposal.

An association of chief executive officers of leading U.S. companies, the Business Roundtable wrote that it is inappropriate for Institutional Shareholder Services, Inc. to establish governance standards for public companies. The group counters that public company boards, not ISS, are in a better position to make these judgments.

According to the letter, the Business Roundtable is concerned that the proposed changes will “result in a one-size-fits-all voting policy that promotes the adoption of an independent chair model at all companies under all circumstances.” Instead, the Business Roundtable suggests that each board should assess whether to combine the positions of chairman and CEO based on the best interests of the company and its shareholders.

Additionally, the board should consider the leadership structure and CEO succession planning process each year and, if the board combines the positions of chairman and CEO, appoint a director to provide independent leadership for the board.

ISS announced the launch of its voting policy open comment period in an Oct. 15 press release.

Governance stakeholders had until Oct. 29 to submit their comments on proposed policies; additional proposed changes included a revised scorecard approach to evaluating equity plan proposals.

The new policies will apply to shareholder meetings taking place on or after Feb. 1, 2015.

To contact the reporter on this story: Susan Bokermann in Washington at

To contact the editor responsible for this story: Ryan Tuck at

Business Roundtable's letter is available at

ISS's press release is available at

ISS's 2015 draft policies are available at