On February 11, 2025, Institutional Shareholder Services (ISS) announced, that, for shareholder meeting reports published on or after February 25, 2025, it will no longer consider the gender, racial, or ethnic diversity of a company's board when making vote recommendations with respect to the election or re-election of directors at U.S. companies under its Benchmark and Specialty policies. This shift in policy is in response to the recent Presidential Executive Orders on DEI. It is unclear whether or when Glass Lewis will respond to the Presidential Executive Orders, but what is clear is that ISS' announcement marks a major step in how investors are reacting to efforts by the Trump administration to end DEI considerations in government and business.
As we discussed in our recent blog, the determination on whether it is appropriate to remove DEI-related disclosure from a company's Form 10-K or proxy statement is usually based on the company's specific facts and circumstances. With the announcement from ISS that it will be halting consideration of certain diversity factors in making vote recommendations with respect to directors at U.S. public companies, there will likely be a reevaluation of the importance of diversity considerations in public company board composition and related policies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
