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ISS Announces QuickScore to Replace GRId
Practical Law Legal Update 0-523-8313 (Approx. 3 pages)
ISS Announces QuickScore to Replace GRId
by PLC Corporate & Securities
| Published on 29 Jan 2013 • USA (National/Federal) |
Institutional Shareholder Services (ISS) announced that GRId will be replaced with ISS Governance QuickScore, designed to identify governance risk within portfolio companies.
Institutional Shareholder Services (ISS) has introduced ISS Governance QuickScore (QuickScore), which will replace the current governance ratings service, GRId 2.0, in late February or early March 2013. QuickScore is designed to help institutional investors:
- Identify and monitor potential governance risk in their portfolios.
- Drill down on companies with governance risk.
- Identify companies with which to engage on governance issues.
- Access detailed data to inform their own investment models.
- Advance compliance on mandates.
QuickScore will initially cover the 3,000 largest US companies by market cap, as well as other regions including Canada, Japan and other regions. QuickScore will assess companies based on the degree of correlation between:
- 40-80 corporate governance attributes, grouped into subcategories within four main categories:
- board structure;
- compensation and remuneration;
- shareholder rights; and
- audit.
- Key financial metrics, comprised of 16 performance and risk factors, such as EBITDA and net profit margins and volatility.
Each company being assessed will receive a numeric, decile-based score indicating its relative governance risk compared to other companies in an index or region, which replaces GRId's color-coded concern levels.
ISS has created a QuickScore website, which includes a link to the ISS Data Verification Site. Companies can review and verify the data ISS has collected on them in relation to the QuickScore factors, and request any corrections, until February 15, 2013. QuickScores will be calculated and released in late February or early March. Companies can also obtain a detailed overview of the QuickScore product on the QuickScore website.