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CALIFORNIA CORPORATE & SECURITIES LAW

Does ISS’ Voting Recommendations Reflect Analysis Or Consensus?

I always appreciate comments from readers of this blog.  One reader responded to yesterday’s post concerning ISS opposition to classified boards: “You seem to be under the impression that ISS comes up with its guidelines through academic research.  Although that CAN come into play, it is much more directly shaped by the policies of its customers.”…

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Is ISS A Board Declassification Denier?

Institutional Shareholder Services (aka ISS) recently published its 2018 Americas Proxy Voting Guidelines Update.  Among other changes, ISS will now recommend a vote against or withhold from the entire board of directors (except new nominees, who will be considered case-by-case) if the company has opted into, or failed to opt out of, state laws requiring a classified…

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ISS Ignores Contrary Studies In Adopting Overboarding Policy Change

ISS released its 2016 Benchmark Policy Recommendations last Friday.  I had previously criticized ISS for its proposal to change its recommendation on withholding votes with respect to directors who sit on too many boards: In proposing this policy change, ISS cites surveys that reflect an increase in the time commitment required for board service. ISS…

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Society Warns ISS That Overboarding Policy Change Will Hurt Women And Minority Directors

Recently, I criticized ISS’ proposed changes to its policy on “overboarding”.  Therefore, I was pleased to see that I wasn’t a lone voice crying in the wilderness.  The Society of Corporate Secretaries and Governance Professionals also submitted a comment letter to ISS.  The Society echoed my observation that ISS had provided no evidentiary support for…

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ISS Proposes To Go Overboard In Proposed Policy Change

Institutional Shareholder Services Inc. (ISS) is a very influential purveyor of proxy advisory services.  As part of ISS’ annual policy update procedure, ISS recently released a proposed policy change with respect to directors who sit on too many boards.  The following table summarizes ISS’ current and proposed policy with respect to recommending votes against directors…

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Proxy Advisory Firms And Investment Adviser Registration

Recently, I wrote about a shareholder proposal seeking to hold a proxy advisor popularity contest.  I commented that this could raise some interesting compliance challenges for proxy advisory firms that are registered as investment advisers.  I waited, it turns out in vain, for someone to point out that not all proxy advisors are registered as…

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There’s Something About Section 800 And ISS Adds Panelist

What’s So Different About Section 800? California Corporations Code Section 800 governs derivative lawsuits.  Yesterday, I wrote about the fact that the California legislature has made Section 800 expressly applicable to foreign corporations (as defined in Section 171).   Is this an academic point or can it matter? One key difference may be that Section 800(c)…

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Has ISS Moved From Advice To Advocacy?

Last November, I joined Professor Stephen Bainbridge (UCLA Law School) and James Copland (Director, Center for Legal Policy at the Manhattan Institute) in submitting this comment letter opposing ISS’ proposal to change its case-by-case approach to stockholder proposals with respect to disclosure of corporate political spending.  Much like Captain Louis Renault, I was “shocked, shocked” when ISS ignored our…

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California Retirement Systems/ISS United On Corporate Political Spending

On Tuesday, I wrote about  CalPERS‘ adoption of updated governance principles, including this new Principle 6.5: Robust board oversight and disclosure of corporate charitable and political activity is needed to ensure alignment with business strategy and to protect assets on behalf of shareowners. We recommend the following: a. Policy: The board should develop and disclose a…

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