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Institutional Shareholder Services (ISS)

Service Providers Framework 2018

You are in Active Ownership Services » Voting

Voting

AOS 11. ESG in voting recommendations

11.1. Describe how ESG factors are taken into consideration in voting recommendations

          Institutions can choose from ISS' benchmark policies, or specialty voting guidelines that evaluate ESG topics from an assortment of investor viewpoints. ISS' range of specialty proxy voting guidelines evaluate issues from the perspective of socially-responsible investors, public funds, labour unions, mission and faith-based investors, as well as sustainability issues outlined by the Principles for Responsible Investment ("PRI") signatories seeking to incorporate ESG considerations into their proxy voting practices. ISS also manages full custom voting policies and implements voting recommendations for clients who wish to vote their proxies according to their own specific ESG oriented guidelines and philosophies.  The Benchmark and Specialty policies can be accessed from https://www.issgovernance.com/policy-gateway/voting-policies/
        

11.2. Additional information [OPTIONAL]

          
        

AOS 12. Raising concerns with companies ahead of voting (Private)


AOS 13. Voting against management

13.1. Indicate whether you communicate the rationale to companies when you, on behalf of your clients, abstain or vote against management proposals.

13.2. Additional information [OPTIONAL]

          After the vote recommendations are published to the ProxyExchange (PX) voting platform, clients can either vote in line with ISS or choose to override the recommendations.  Others may choose to set up their workflow with a 'REFER' option which alerts the client that there is a controversial vote pending, but does not commit the client to voting in any particular way.  Under either process, each client is responsible for its own voting decisions and is always free to follow or reject any ISS vote recommendation.
        

AOS 14. Monitoring voting outcomes

14.1. Describe how you monitor voting outcomes.

          ISS captures the meeting results for the company, and includes these in next year's proxy research report.  ISS Research also capture any correspondence with the company and log this in the Engagement Module.
        

14.2. Describe how you typically decide what recommendations for next steps to give to clients.

14.3. Additional information [OPTIONAL]

ISS provides the rationale for the vote recommendation in our analysis, and where the company has explained why an alternate course of action is appropriate, their justification will be summarized in the research report.


AOS 15. Mechanisms for clients to review voting recommendations

15.1. Indicate whether you have formal mechanisms in place for clients to review your voting recommendations.

15.2. Describe the formal mechanisms you have in place if clients wish to review your voting recommendation and/or give voting instructions different from your recommendations.

In terms of the research process, if clients disagree with the ISS vote recommendations, they can and do contact the relevant analyst with their feedback. If there is additional public information which comes to light and is material to the analysis, the analyst will amend the report, whether the vote recommendation is impacted or not, and then issue an Alert to bring it to the attention of our institutional clients on the ISS voting platform, ProxyExchange.

Proxy Alerts are distributed to institutional clients the same way regular proxy analyses are distributed and the same clients who received the original analysis will receive any corresponding Proxy Alert.

In terms of the operational voting instructions process, after the vote recommendations are published to the ProxyExchange (PX) voting platform, clients can either vote in line with ISS or choose to override the recommendations.  Others may choose to set up their workflow with a 'REFER' option which alerts the client that there is a controversial vote pending, but does not commit the client to voting in any particular way.  Under either process, each client is responsible for its own voting decisions and is always free to follow or reject any ISS vote recommendation. 

15.3. Additional information [OPTIONAL]


AOS 16. Involvement in projects to improve voting trail and obtaining confirmation

16.1. Describe your involvement in any project to improve the voting trail and/or to obtain vote confirmation for your clients.

ISS actively participates in industry working groups and other forums both at national and international level and collaborates with other participants, such as SWIFT, in trying to find solutions to this and other issues facing the industry. In the past ISS has collaborated with SWIFT and other participants in the design of the ISO20022 xml messages, which can facilitate post meeting vote confirmations. ISS continues to lobby for the usage of this global standard at national and international as a standardized approach across markets, which is the key to encouraging widespread adoption across the industry. ISS was also a key contributor to the recent UNPRI vote confirmation case study covering Issuers from the UK and the Netherlands.

16.2. Additional information [OPTIONAL]


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