Institutional Shareholder Services yesterday released updates to its proxy voting guidelines for 2012. As we discussed in October, draft updates were published last month.
The final version of the guidelines for TSX-listed companies includes updates on ISS' policies with respect to voting on director nominees in uncontested elections to add an explicit reference to risk oversight in the rationale for the voting recommendation. According to ISS, the intention is not to penalize boards for taking prudent business risks or for exhibiting reasonable risk appetite but, rather, to address situations where there has been a material failure in a board's role in overseeing the company's risk management practices.
Further, its policy on employee stock purchase plans has also been updated by increasing the acceptable allowable employer matching contribution to 25% of the employee contribution, deleting the offering period requirement and adding key factors to be considered, such as other compensation plans (including pension plans) and eligibility and administration, in determining whether to vote for or against the purchase plan.
Meanwhile, the U.S. policies have been updated by, among other things, refining the methodology of evaluating executive pay-for-performance. As we discussed in our blog post October 28, ISS has stated that the new methodology is being considered for Canada.
The new guidelines are effective for meetings on or after February 1, 2012.
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