On October 26, 2015, Institutional Shareholder Services (ISS) released draft 2016 voting policies on select topics for public comment. Among other revisions, ISS is seeking feedback from companies, institutional investors and other interested parties on proposed changes to its US policies on:

ISS is accepting comments on the proposals until 6:00 p.m. on November 9, 2015. The draft policies include specific requests for comments and instructions on how to submit comments.

ISS expects to release final 2016 policies on November 18, 2015.

In 2015, ISS adopted a policy within its Board Accountability policy framework that addressed unilateral by-law and charter amendments. The current approach is to generally recommend voting "against" or "withhold" for individual directors, committee members or the entire board (with the potential exception of new nominees) if the board amends the company's by-laws or charter without shareholder approval in a manner that materially diminishes shareholders' rights or that could adversely impact shareholders. In applying this policy, ISS considers mitigating factors including:

ISS proposes to update this policy to explicitly state that when a board unilaterally amends the company by-laws or charter to either classify the board or establish supermajority vote requirements in any period after completion of a company's IPO, ISS would generally recommend voting against all director nominees until the unilateral action is either reversed or is ratified by a shareholder vote.

ISS is also considering adding a policy providing that, when a board amends a company's by-laws or charter, before or in connection with the company's IPO to classify the board and establish supermajority vote requirements to amend the by-laws or charter, ISS would generally recommend voting against all director nominees at annual meetings held after completion of the IPO.

This proposed policy change would update ISS's policy on overboarded directors. The current policy is to recommend voting "against" or "withhold" from individual directors who either:

ISS proposes to update this policy by lowering the acceptable numbers of board positions:

If this proposed policy change is adopted, in all cases, there would be a proposed one-year grace period until 2017. During this time, ISS would include cautionary language in company research reports but would not issue a negative vote recommendation solely because a director was considered overboarded under the revised policy.

An externally-managed issuer (EMI) typically does not directly compensate its executives. Instead, executives are compensated by the external manager, which is reimbursed by the EMI through a management fee.

EMIs that are reporting companies are required to hold periodic say on pay votes. However, often EMIs do not disclose sufficient information about the compensation arrangements and payments made to executives on behalf of the external manager. When executive compensation information is disclosed, the extent of such disclosure varies by company, but is usually limited to the aggregate management fees paid by the EMI to the manager. This is not sufficient disclosure for shareholders to assess pay programs and their linkage to company performance.

ISS is proposing to update its pay-for-performance analysis policy regarding EMIs. Under the proposed policy change, ISS would generally recommend "against" the say on pay proposal (or compensation committee members, the compensation committee chair, or the entire board, as appropriate, if no say on pay proposal was on the ballot) in cases where a comprehensive pay analysis is impossible because the EMI does not provide sufficient disclosure about compensation practices and payments made to its executives on the part of the external manager.