On 18 November 2024, ISS launched a consultation on its 2025 voting policies which will apply from 1 February 2025. The consultation closes on 2 December 2024. In relation to the UK and Ireland, there will be policy updates relating to:
Remuneration: Amendments are proposed to the provisions relating to salaries, pension contribution rates, LTIPs, malus and clawback and share dilution limits. The proposed changes reflect the recent update to the Investment Association's Principles of Remuneration and the revised UK Corporate Governance Code which will begin to apply for financial years commencing on or after 1 January 2025 (save for provision 29, which will apply to financial years beginning on or after 1 January 2026).
Board diversity: ISS indicates that:
- It will monitor progress against gender and ethnic diversity targets in the FCA Listing Rules and may consider recommending against the chair of the nomination committee (or another relevant director) where progress has not been made and there is no rationale given for the lack of progress.
- Higher diversity standards are expected from FTSE 350 companies.
- In the case of ISEQ 20 companies, ISS may recommend against the chair of the nomination committee (or another relevant director) where less than 33% of the board is composed of women or where there is not at least one individual from an ethnic minority background (subject to certain mitigating factors). AIM-listed companies with a market cap over GBP500 million are expected to have at least one woman on the board and at least one individual from an ethnic minority background.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
