ESG Research Update

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ISS annual outlook report on top governance and stewardship issues in 2021

International Shareholder Services Inc. (ISS) has released its Top Governance and Stewardship Issues in 2021 report, with the key concerns being:

  • Protests highlighted racial and ethnic diversity of corporate directors, C-suite executives and corporate workforces, with ISS data showing very slow progress on racial and ethnic diversity on US corporate boards, with the gap in C-suites even more pronounced

  • The COVID-19 pandemic continues to require virtual shareholder meetings, with shareholders wanting meeting practices in 2021 that do not limit meaningful participation

  • Executive compensation program changes are of concern to investors, with mid-year changes to incentive programs seen as justified given the pandemic, the rationale for the altered program must be clearly explained and resulting awards reasonable

  • Climate change remains a hot topic with momentum expected to escalate as large investors indicate supporting more climate-related shareholder proposals and voting against directors who aren’t taking climate change seriously enough

  • Special purpose acquisition company (SPAC) interest has been vast in 2020 and isn’t slowing down, with indications this will catch on in Europe

  • Hedge fund activism may see a rebound, with over 50 proxy contents put into ballots globally in 2020 despite the pandemic

To download a copy of the full report, please click here.