On February 18, 2014, Institutional Shareholder Services (ISS) launched an updated and enhanced version of its governance and risk assessment tool for Russell 3000 companies – “ISS Governance QuickScore 2.0” (QS 2.0). Some of its new features include a new monitoring system that will be event-driven, whereby ISS will track certain regulatory filings (eg the adoption of clawback policies filed on Form 8-K) and other public governance-related information to automatically revise and update QS 2.0 scores, modified weightings assigned to certain factors or “data points,” and new corporate governance data points for U.S. companies. Similar to its prior versions, however, QS 2.0 will continue to give companies five distinct ratings (each on a scale of 1-10, with 10 being the highest governance risk) including an overall rating and ratings in four historical categories or “pillars”: (1) board structure, (2) executive compensation, (3) shareholder rights, and (4) audit related practices. Companies should consider if and/or how to respond to the changing ISS environment, whether through enhanced disclosures, a change in internal policies, or both.
For further information on ISS’ QuickScore 2.0, please see our alerts previewing the launch of QS 2.0 and commenting on the launch of QS 2.0. ISS have also published a Technical Document that provides in depth details on QS 2.0.