ISS may consider the board's adoption of director qualification by-laws without putting the by-laws to a shareholder vote to be a material failure of governance. By-laws that keep shareholders from voting on otherwise qualified candidates unnecessarily infringe on the fundamental shareholder right of electing directors. In the case where a director qualification by-law is not put to a shareholder vote, ISS may, consistent with its "Governance Failures" policy, recommend a vote against or withhold from director nominees for material failures of governance, stewardship, risk oversight or fiduciary responsibilities. However, ISS has not recommended voting against directors and boards at companies whose by-laws disqualify director nominees who fail to disclose third-party compensatory payments, as these provisions may provide greater transparency for shareholders in their decision-making.

ISS will apply a case-by-case analytical framework when considering whether to recommend in favor of a proposed director qualification by-law that is put to a shareholder vote. ISS will consider, among other factors:

ISS would consider any third-party compensatory arrangements of director nominees in its case-by-case analysis of proxy contests. Compensation arrangements are among the factors ISS considers when analyzing proxy contests.