Key Changes to Facilitate Global Comparability on Core Governance Practices
ROCKVILLE, M.D. (30 October 2017) – Institutional Shareholder Services Inc. (ISS), a leading provider of governance and responsible investment solutions to the global financial community, today announced methodology changes to QualityScore, ISS’ state-of-the-art global corporate governance scoring solution for institutional investors.
As part of the release, the QualityScore methodology will be enhanced to provide users with deeper actionable insights, particularly in the areas of board composition and compensation. Effective December 4, subscribers to ISS QualityScore will be able to compare 21 key factors across global markets covering issues including: the number of financial experts serving on the audit committee; classification of the board chairman, as well as new factors that evaluate independence of the board’s audit, nomination, and compensation committees; unequal voting rights; and vesting periods for option and restricted stock awards. These changes will apply to all markets covered by QualityScore, save for Japan where governance structures do not easily lend themselves to the foregoing assessments. Another across-the board methodology change will be the provision of credit for covered companies meeting higher standards for women on the board.
Separately, for covered European companies, scoring for factors tied to pay-for-performance will now be incorporated. These pay-related factors previously were offered for informational purposes only.
“With this release, we are pleased to respond to the requests of our institutional subscribers for additional uniformity where applicable and across the breadth of the QualityScore coverage universe,” said John Roe, Head of ISS Analytics, the data arm of Institutional Shareholder Services. “Portfolio managers, who increasingly have a global governance perspective, can now compare all companies covered by QualityScore across a number of key governance attributes to assist with their efforts to identify and mitigate portfolio risks and uncover additional investment opportunities.”
More information on key enhancements to be released on December 4 can be found here.
At its core, ISS QualityScore is designed to help investors identify and measure corporate governance risk across portfolio companies. ISS QualityScore provides a score for each company in its coverage universe that measures the company’s level of corporate governance risk, both overall and within four broad pillars: board structure, compensation/remuneration, shareholder rights, and audit & risk oversight.
Importantly, ISS QualityScore subscribers have the ability to access and analyze the underlying data from which the scores are generated, allowing them to screen portfolio companies against hundreds of corporate governance factors or perform detailed side by side comparisons of two or more companies’ profiles.
Of note and in preparation for the December 4 launch, beginning 9am ET (2pm UTC) on November 13 and lasting through 8pm ET on November 28 (1am UTC on November 29), there will be a data verification period where QualityScore covered companies, may verify information contained in your corporate governance profile via the data verification site on Governance Analytics.
