Statement Regarding Consideration of Diversity Factors in U.S. Director Election Assessments

Institutional Shareholder Services (ISS) annually conducts a thorough, rigorous, and transparent policy review to consider updates to its Benchmark policy and its Specialty policies for the upcoming proxy season.  On an exceptional basis, ISS also considers updates to its policies in light of relevant legal and regulatory changes and/or other emerging issues affecting investors and their portfolio companies.

In the United States, there recently has been increased attention on diversity, equity, and inclusion (DEI) practices, including the issuance last month of Presidential Executive Orders on DEI.  We anticipate that institutional investors and U.S. companies will have a range of perspectives on DEI, including whether and how companies can or should adapt their specific policies and practices to the evolving market and governmental activity. 

In light of these developments, ISS will indefinitely halt consideration of certain diversity factors in making vote recommendations with respect to directors at U.S. companies under its proprietary Benchmark and Specialty policies. Specifically and for shareholder meeting reports published on or after February 25th, ISS will no longer consider the gender and racial and/or ethnic diversity of a company’s board when making vote recommendations with respect to the election or re-election of directors at U.S. companies under its Benchmark and Specialty policies. Assessments and vote recommendations on directors of U.S. companies will continue to be evaluated under the other considerations outlined in the Benchmark and Specialty voting guidelines (accessible here) including independence, accountability and responsiveness.

ISS will continue to review its Benchmark and Specialty guidelines as appropriate.