ISS REBRANDS QUICKSCORE, OPENS DATA VERIFICATION PERIOD

Boardroom

Institutional Shareholder Services Inc. (ISS) yesterday launched the data verification period for its governance rating platform formerly known as QuickScore.  The product will be rebranded as QualityScore Nov. 21 and data verification for covered companies will be open until Nov. 11.

QualityScore, which covers about 5,600 publicly traded companies in 30 markets, includes U.S. companies listed on the Russell 3000 and S&P 500.  The platform, via its data-driven scoring methodology, is intended to help institutional investors review governance and risk factors in the areas of board structure, executive compensation, shareholder rights and audit & risk oversight.

This year’s iteration includes several new rating factors relevant to U.S. companies, including the following:

Board Structure

  • Proportion of women directors;
  • Board refreshment:
    • Proportion of non-executive directors on the board for less than six years;
    • Any other mechanisms to encourage director refreshment;
  • Confirmation of a formal CEO and key executive officers succession plan;
  • Material failures of governance; and
  • Adequate response by the board to low support for certain management proposals.

Executive Compensation

  • Employment of at least one metric that compares the company’s performance to a benchmark or peer group.

Audit & Risk Oversight

  • Tenure of the external auditor.

Shareholder Rights

  • Exclusive venue/forum provision;
  • Fee shifting provision;
  • Representative claim limitation or other significant litigation rights;
  • Proxy access bylaw provisions, including:
    • Ownership thresholds;
    • Ownership duration thresholds;
    • Cap on shareholder nominees to fill board seats;
    • Aggregation limits on shareholders to form a nominating group;
  • Whether the company can classify its board without shareholder approval;
  • Whether shareholders have the right to amend the bylaws; and
  • Whether the company can materially modify its capital structure without shareholder approval in the U.S.

As a reminder, ISS has also made available for comment its proposed draft policy changes for 2017.  All Comments are due by 6 p.m. ET on Nov. 10.  ISS will release its final 2017 voting policies the week of Nov. 14 and these policies will apply to shareholder meetings taking place on or after Feb. 1, 2017.

For more on the proposed policy changes, see ISS Issues for Comment Its Proposed 2017 Draft Policy Changes.