Georgeson identified these top takeaways from the recent inaugural ISG/Corporate Issuers Conference:
1. Panelists suggested that the ISG Governance Principles bring a “comply or explain” structure to the US market. Investors' want companies to either comply or explain their basis for noncompliance.
2. The ISG Governance Principles are meant to be common ground, baseline principles of governance expectations for US companies. Investors individual policies extend beyond the ISG Governance Principles, which are merely foundational. 3. Board accountability is a common focus across ISG signatories. In the absence of meaningful progress, investors will vote against directors for poor governance practices. 4. Contrary to some recent headlines, not all investors think that the CEO signatories to the Business Roundtable's Statement on the Purpose of a Corporation 'got it wrong.' Although opinions varied, the BRT Statement is generally consistent with the views of long-term asset owners/managers that long-term shareholder value creation requires a holistic consideration of stakeholders. 5. Issuers would be wise to review their corporate governance frameworks against the ISG Governance Principles as they begin their off-season engagements. Investors are using the Principles to identify engagement topics, as well as to inform their proxy voting (see our recent State Street report). Investors expect directors (not just management) to understand their perspectives communicated via their stewardship reports and other thought leadership (which the Society reports on regularly). 6. Investors and issuers share a common goal of improving the quality of engagements. Investors reportedly urged companies to increase their dialogue with the ISG to enhance the quality of their engagements.
See also this Business Law Prof Blog; our prior report: "How to Disclose Alignment of Practices With ISG Governance Framework"; and additional information & resources on the ISG on our Corporate Governance Codes & Guidelines page. This post first appeared in the weekly Society Alert!