US-based Institutional Shareholder Services (ISS), which provides corporate governance solutions to the global financial community, has launched a suite of governance risk reports designed to make it easier for asset owners to monitor governance risk across multiple participating investment managers‘ portfolios
The new reports will give asset owners a clearer picture of governance risk, including reputational risk, risk to long-term shareholder value creation, risk to the interests of a fund’s stakeholders, and risk to effective fulfillment of fiduciary obligations. Large companies will be assigned a ‘QuickScore’ to indicate their overall level of governance risk.
ISS says the information is presented in an easily-read, graphical format and will flag key issues in external managers’ proxy voting activities, helping to mitigate risk in actively and passively managed funds.
The report offer an aggregate view of key governance matters across an asset owner’s investment managers who use ISS for proxy voting and participate in reporting. They also benchmark votes cast with management recommendations (for both management and shareholder proposals) alongside the investment manager’s voting policy recommendations and ISS’ benchmark policy recommendations, in order to determine potential gaps.
Stephen Harvey, ISS’s chief revenue officer, said: ‘Eight of the 25 largest global corporations have QuickScores of eight or higher, suggesting heightened governance risk for state and municipal pensions systems, sovereign wealth funds, local pension authorities and other funds with likely exposure to these companies. Now more than ever, asset owners need real-time intelligence to protect their beneficiaries‘ interests through effective governance monitoring.’
Details of the governance risk reports are here: http://www.issgovernance.com/governance-solutions/governance-risk-report/
