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ISS to Launch QuickScore 3.0
Practical Law Legal Update 6-586-2665 (Approx. 3 pages)
ISS to Launch QuickScore 3.0
by Practical Law Corporate & Securities
| Published on 30 Oct 2014 • USA (National/Federal) |
Institutional Shareholder Services (ISS) announced updates to ISS Governance QuickScore (QuickScore 3.0).
Institutional Shareholder Services (ISS) has announced updates to ISS Governance QuickScore, its scoring and screening solution designed to help institutional investors identify governance risk within portfolio companies. The updated version of QuickScore is referred to as QuickScore 3.0.
ISS plans to launch QuickScore 3.0 on November 24, 2014. At the beginning of December, QuickScore 3.0 pillar and overall scores will be available on Yahoo! Finance and Bloomberg. Profile reports will be accessible to subscribers through the FactSet platform.
QuickScore 3.0 assigns each company being assessed a numeric, decile-based score indicating its relative governance risk compared to other companies in an index or region. The technical document for QuickScore 3.0 is available for download on ISS's QuickScore 3.0 page.
Summary of Updates in QuickScore 3.0
QuickScore 3.0 includes the following worldwide updates to the prior version, QuickScore 2.0:
- Enhanced methodology for existing markets. QuickScore 3.0 includes a new factor to track board accountability under a new Controversies subcategory in the Board pillar. Existing factors were also reviewed to ensure the QuickScore methodology is in line with investor considerations and expectations. For example, the factor pertaining to women on the board is now a scored factor for US companies instead of a zero-weight factor.
- Coverage expansion. QuickScore 3.0 includes coverage expansion to introduce emerging markets and to further expand coverage of European companies in the Stoxx600.
- New governance factors. QuickScore 3.0 includes new governance factors to analyze emerging market companies.
- Review of methodology and pillars. QuickScore 3.0 includes a complete review of the methodology and pillars based on internal reviews and market feedback. The Audit and Risk Oversight pillar incorporates an in-depth review of investigations (in the US) and enforcement actions (globally), including the type of regulatory investigation and the materiality of penalties or resolution of these cases.
QuickScore 3.0 added new factors to the analysis and scoring of existing regions. The new factors applicable in the US ask:
- Does the company disclose a policy requiring an annual performance evaluation of the board? (Q41)
- Has ISS's review found that the Board of Directors recently took action that materially reduces shareholder rights? (Q345)
- Is there a sunset provision on the company's unequal voting structure? (Q56)
- Does the company have a controlling shareholder? (Q290)
Pre-launch Data Verification Period
From November 3, 2014 at 9:00 a.m. EST until November 14, 2014 at 8:00 p.m. EST, companies can preview their QuickScore 3.0 governance data and request any changes or updates using the data verification tool available on the ISS Governance Analytics website. ISS will review and respond to all requests for changes within five business days. However, data verification requests received after November 10, 2014 may not receive e-mail verification prior to the November 24 launch of QuickScore 3.0.
After the launch, the data verification site will remain available year-round so that companies can update and verify their QuickScore data throughout the year.