Institutional Shareholder Services (ISS) recently announced new factors and other methodology updates to its ISS ESG Governance QualityScore corporate governance scoring tool, including 11 new factors relating to a company’s oversight and management of information security risk and new questions addressing board diversity, director independence and compensation-related matters. This Sidley Update summarizes the Governance QualityScore updates applicable to U.S. companies. It also covers the ISS and Glass Lewis & Co. proxy voting policy updates that are now in effect for the 2021 proxy season. The key policy updates relate to board diversity and related disclosures, director tenure, board oversight of environmental and social risk, virtual shareholder meetings, ESG-related shareholder proposals and compensation-related matters.
Appendix A provides a detailed summary of the ISS and Glass Lewis proxy voting policy updates that apply to U.S. companies and discusses their practical implications. Appendix B includes a comprehensive list of the various circumstances in which ISS and Glass Lewis may recommend votes against directors in an uncontested election.
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