ISS adds 23 factors to its “Governance QualityScore”

ISS GQS YouTube Thumbnail

Recently, ISS updated its Governance QualityScore (GQS) to add 23 new factors – while applying 52 existing factors to companies based in new jurisdictions for increased global comparability of governance practices.

New factors are spread across seven topical areas to include:

1. Information Security, to assess companies’ third-party information security risks and breaches, support levels for information security-related shareholder proposals, and the disclosure level of information security-related performance measures in executive compensation plans.

2. Director Skills, to assess companies’ level of director skills as it pertains to climate, diversity, equity, and inclusion, and other selected skills.

3. Director and Executive Pledging, to assess companies’ existing pledging policies and the actual shares pledged by directors and executives expressed as a percentage of the company’s outstanding shares and in aggregate value.

4. Emerging Risk Oversight, to assess companies’ emerging risk oversight by evaluating the independence of committees responsible for climate, human capital management, health and safety, and succession.

5. Diversity, Equity, and Inclusion, to expand existing assessments of companies’ diversity, equity, and inclusion profile by evaluating whether there are LGBTQ+ directors and ethnically diverse leaders on the board.

6. ISS Pay-For-Performance Concerns, to display the concern level for companies’ pay-for-performance measures, including the initial quantitative concern, and overall quantitative concern.

7. Holding Foreign Companies Accountable Act, to assess whether companies are conclusively identified under the Holding Foreign Companies Accountable Act.