& Securities

Institutional Shareholder Services (ISS) has launched its annual policy survey (available here) to help inform potential changes to its voting policies in advance of the 2027 proxy season. The survey seeks feedback on, among other matters, semiannual reporting, reincorporation and say-on-pay responsiveness. Survey questions of interest that are relevant to U.S. companies and investors are summarized below. ISS survey responses are due by August 14, 2026, at 5 p.m. (Eastern time). More information on the policy development processes of ISS is available here.  

Board Matters

Director Tenure (U.S.). ISS asks respondents whether long tenure should be a factor in determining director independence. The survey suggests that ISS may be reconsidering its views on long director tenure, and asks whether tenure should matter at all, or whether there should be a period of years (10, 12, 15, 20 or other) after which independence should be questioned. Currently, ISS’s QualityScore identifies directors who have served on the board for nine or more years as having “lengthy tenure,” which does not impact a company’s score unless more than one-third of the board is so identified.

Shareholder Rights

Semiannual Reporting (U.S. and Canada). Recent proposed rulemaking in both the U.S. (see our previous Alert here) and Canada would allow public companies to report their financial results on a semiannual rather than quarterly basis, with Companies having the option to continue to report on a quarterly basis. ISS asks respondents to identify their attitude towards semiannual reporting (e.g., little concern; positive step to reduce “short-termism;” negative change likely to heighten volatility and disadvantage public investors; appropriate for certain companies but not others).

Reincorporation, Changes to Corporate Laws of Location (U.S. and Canada). ISS is seeking feedback from respondents regarding the implications for shareholders when a company changes its location of incorporation, or alters its governing documents following changes to corporate laws in its existing location of incorporation, including how to assess the tradeoff between the potential business benefits and any reduction in shareholder rights.

“Problematic” Governance Provisions (U.S. and Canada). Under its current policy, ISS will perpetually issue a negative vote recommendation in director elections when the board adopts or maintains what ISS views as “problematic” governance provisions (e.g., multi-class share structures with unequal voting rights; supermajority voting requirements for charter or bylaw amendments; restriction on shareholder proposals or initiation of derivative suits). ISS asks whether it should continue this policy or only issue such recommendation in the first year after adoption of the governance provision, and whether only committee chairs should be targeted.

Executive Compensation

Say-on-Pay and Board Responsiveness (U.S.). The SEC’s proposal to simplify U.S. public company filer classifications is expected to greatly expand the number of companies exempt from existing say-on-pay voting requirements and reduce other executive compensation disclosures (see our previous Alert here). Against this backdrop, ISS seeks feedback from respondents on the appropriate approach for ISS policy to signal any significant concerns regarding executive pay when no say-on-pay is on the ballot. Approaches include applying any adverse recommendations to the full compensation committee (as consistent with the current approach), a more targeted approach where in the first year of concern any adverse vote recommendation would be applied only to the election of the compensation committee chair, potentially escalating to other committee members only if there are multiple years of concerns, or refraining from issuing an adverse vote recommendation on compensation committee members unless there is a required say-on-pay vote. ISS also asks respondents to opine on what board responsiveness threshold is appropriate when evaluating the board’s response to any compensation committee members who received low shareholder support at the prior annual meeting when the say-on-pay vote is unavailable. Response options include adopting the existing 50% threshold applied by ISS in director elections or the existing ISS say-on-pay responsiveness threshold of 70%; respondents can also suggest their own threshold or indicate that they would reject any threshold.

Long-Term Incentive Performance Target Disclosure (U.S.). Many companies choose not to disclose their forward-looking long-term incentive performance targets on the assertion that such disclosure could cause competitive harm. ISS asks respondents whether the risk of competitive harm is a compelling rationale in certain circumstances for the non-disclosure of forward-looking long-term incentive performance targets.

Discretionary Bonus Programs at Financial Services Companies (U.S.). Under the current policy, discretionary bonus programs at financial services companies are generally identified as a concern, which may be mitigated by disclosures that increase transparency around the use of discretion. In light of financial services company claims that formulaic bonus structures are incompatible with their business and that shareholders are generally supportive of their current bonus structure given the unique sector, ISS is seeking views on whether this sector-specific context may warrant a different treatment of discretionary bonus programs in the qualitative pay-for-performance evaluation for U.S. financial services companies.

Environmental & Social Topics

Reduced Climate Related Disclosures (Global). Acknowledging the regulatory changes across various jurisdictions that may lead companies to reduce or suspend their environmental and climate-related disclosures, ISS seeks feedback on how shareholders should appropriately respond to such reduced disclosures.

Nature-Related Risks (Global). ISS asks whether respondents believe it is appropriate at this time to expect companies with significant exposure to nature-related risks to disclose information according to a recognized framework to help assess and manage these risks.