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News < Back Compliance : Sarbanes Oxley : Governance Institutional Shareholder Services Drives Shareholder Value New Program Encourages Companies to Address Governance Weaknesses Prior to Shareholder Vote
?It?s all about managing risk and driving shareholder value,? said John M. Connolly, President and Chief Executive Officer of ISS. ?As the leader in this industry representing more than 1000 financial institutions, it is our responsibility to protect and enhance our institutional clients? interests by encouraging and helping issuers to implement corporate governance best practices. Proxy advisors can either sit back and criticize companies or they can create true strategic value for investors by leading constructive dialogue on important issues.? On December 8, following a massive summer effort to obtain institutional input into voting policy guidelines, ISS released its 2005 policy updates. Based on feedback from its institutional client base, ISS will continue to apply its quantitative methodology to assess the cost of equity based compensation plans, but this year will broaden its compensation evaluation to include analysis of burn rates, pay-for-performance metrics, director pay and various other qualitative factors. ISS is also tightening its overboarding policy by limiting CEO directorships to three public company boards (including their own), and will scrutinize board responsiveness in cases where one or more directors receive a significant no confidence vote from shareholders. ISS? key goal is to drive shareholder value for its institutional clients through policy-based proxy analysis and vote recommendations. To help facilitate this goal and to encourage issuers to address potential governance problems sooner than later, ISS? Global Research team, which is separate and distinct from its Corporate Services division, is proactively reaching out, prior to the shareholder meeting season, to those widely-held companies in which we anticipate a potential withhold vote recommendation resulting from a divergence from corporate governance best practice. ?At ISS, we believe that corporate governance has evolved beyond activism to a new era in which both institutions and issuers are focused on bringing about greater value for shareholders, said Randall H. Hancock, Executive Vice President and General Manager of Global Research for ISS. ?Through engaging with the most widely-held issuers through outreach programs like this, ISS serves our institutional clients? interests by initiating constructive dialogue that is designed to bring about positive change for investors and issuers alike.? ISS is the world's leading provider of proxy voting and corporate governance solutions. ISS provides proxy research, vote recommendations and governance advisory services to financial institutions worldwide. Founded in 1985, ISS is headquartered in Maryland and has offices in New York, London, Toronto, Tokyo and Chicago. 
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