ISS Issues Voting Recommendation Policies Updates, Including Change to Voting Recommendations Related to Board Gender Diversity

Institutional Shareholder Services ("ISS"), a leading global proxy advisory firm, recently issued final policy updates to its proxy voting policies for 2019. Notably, the 2019 updates change ISS voting recommendation policies as they relate to board gender diversity. The ISS 2019 policy updates can be found here.

Prior to the 2019 final policy updates, ISS encouraged companies to consider  the issue of board gender diversity, but did not consider a lack of gender diversity when making proxy voting recommendations. Under ISS’s new policy, for meetings of shareholders of companies in the Russell 3000 or S&P 1500 held on or after February 1, 2020, ISS will generally vote against or withhold votes from the chair of the nominating committee (or other directors on a case-by-case basis) if there are no women on the company’s board of directors. The 2020 effective date allows boards without female directors time to recruit female candidates.

ISS will consider, on a case-by-case basis, circumstances explaining the absence of board gender diversity. Among other mitigating factors, ISS may consider (i) a firm commitment, as stated in the proxy statement, to appoint at least one female to the board in the near term; and (ii) the presence of a woman on the board at the preceding annual meeting.

For more information, contact Steve Hackman, Eric Hansen or another member of our Securities team.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.