On October 30, 2017, Institutional Shareholder Services (ISS) announced new questions and other methodology updates to its ISS Governance QualityScore corporate governance scoring tool that will take effect on December 4, 2017. These and additional updates are reflected in the QualityScore technical document ISS published on November 14, 2017, available here. This Sidley Update summarizes the QualityScore updates applicable to U.S. companies and reminds companies to verify their data against QualityScore’s methodology until Tuesday, November 28, 2017 at 8:00 p.m. (ET).
QualityScore assigns each company in the S&P 500 and Russell 3000 (as well as companies in several foreign indices) a numeric, decile-based score indicating its corporate governance risk relative to other companies in the applicable index or region. Scores range from “1” to “10,” with “1” indicating the highest level of governance quality and lowest level of governance risk. ISS analyzes a company’s corporate governance risk based on specified factors across four topical pillars: Audit & Risk Oversight, Board Structure, Compensation/Remuneration and Shareholder Rights.
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