ISS Suspends Consideration of Board Diversity Factors in U.S. Voting
By Shirley Westcott
In a surprise update, proxy advisor Institutional Shareholder Services (ISS) announced on Feb. 11 that it is halting consideration of gender and racial/ethnic diversity factors when making voting recommendations with respect to board diversity at U.S. companies. The change will apply to ISS’s benchmark and specialty policies and will take effect for shareholder meeting reports published on or after Feb. 25.
Under its current benchmark policy, ISS will generally oppose the nominating committee chair if there are no women on the board and, in the case of S&P 1500 and Russell 3000 firms, if there are no racially or ethnically diverse directors.
ISS attributed the change to increased scrutiny of diversity, equity, and inclusion (DEI) practices in the U.S., including President Trump’s recent executive order on DEI.
See ISS’s press release here.
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