Taking stock of director vulnerabilities in elections is a critical component of preparing for the annual meeting, proxy statement and shareholder engagement in 2020. In 2019, shareholder support in director elections fell to its lowest level since 2011. Institutional Shareholder Services (ISS) recommended voting against or withholding from individual directors over 3,000 times at Russell 3000 companies in 2019. ISS recently released updates to its proxy voting policies for the 2020 proxy season, which will apply to shareholder meetings held on or after February 1, 2020, including new and updated policies that may further impact director elections. Companies should familiarize themselves with the updated voting policies of ISS and Glass Lewis, and in particular, policies that continue to put a spotlight on directors.

In this Alert, we summarize this year’s ISS voting policy updates, which are largely consistent with the changes that ISS proposed in October, and mostly refine or codify existing ISS policies. We summarize in Annex A the broad range of circumstances in which ISS indicates that it may issue a negative recommendation against individual directors, committee members, or the entire board. We also provide guidance and practical tips on “What to Do Now?”

View this Governance & Securities Alert.