On July 21, 2026, ISS STOXX Governance (ISS) opened its Annual Global Benchmark Policy Survey (the Survey), which it uses to inform its annual policy development process. This year, the Survey covers a wide range of topics under the headings of board elections, shareholder rights, compensation, audit & auditors, and environmental & social topics. The Survey closed last Friday and we expect the results will be published in the next month or so. Below are a few notable questions and themes for U.S. companies in the Survey, which give us a glimpse into potential changes to ISS’s voting guidelines for the 2027 proxy season.
Notable Questions and Themes
A. Tenure Impact on Director Independence (Questions 10-15)
ISS asks (i) whether the respondent considers director tenure to be a material factor that could adversely impact a director’s independence; (ii) the length of tenure that would cause this shift; and (iii) which factors should be taken into account in assessing whether a director’s tenure raises independence concerns. The last of these questions suggests factors beyond the tenure of the individual director that could be considered, including the board’s average tenure, the proportion of long-tenured directors, and overlapping tenure with the CEO/Chair.
ISS voting guidelines currently do not treat tenure as a factor in assessing an individual director’s independence. ISS does, however, recommend voting against shareholder or management proposals that would impose tenure limits through mandatory retirement ages, but this does not involve voting against individual directors. If ISS were to adopt tenure-based independence criteria or other forms of tenure limits, age-based limits would likely remain a distinct issue, given ISS’s current policy reflects a view that mandatory retirement ages are not the preferred mechanism for board refreshment.
As a point of comparison, Glass Lewis recommends voting against the nominating committee chair when, alongside other governance or board performance concerns, the average tenure of non-executive directors is 10 years or more and no new independent directors have joined the board in the past five years. This question may preview a shift in ISS’s view on director tenure, particularly with respect to independent directors. It will be worth watching whether responses to these questions lead ISS to add tenure as a factor in assessing independence and, if so, which factors it would weigh.
B. Reincorporations and Changes to Corporate Laws of Location (Question 23)
The most recent ISS U.S. Voting Guidelines take a more general approach and use a case-by-case basis for evaluating proposals on reincorporating to another jurisdiction. The factors it recommends considering include the reasons for reincorporation, comparison of the company’s governance practices and provisions prior to and following the reincorporation, and comparison of the corporation laws of the original state and destination state. ISS also currently recommends voting for reincorporation when the economic factors outweigh any neutral or negative governance changes.
This question suggests that any refinement on ISS’s approach to reincorporation may place greater emphasis on the impact to shareholder rights, beyond economic factors and general governance concerns. It also reflects heightened interest in companies reincorporating to another jurisdiction, as some reincorporation moves have gained traction in recent years, including DExit (Delaware to Texas) and other popular jurisdictions such as Nevada.
C. Problematic Governance Provisions (Questions 25-29)
Under its current policy, ISS issues a ‘perpetual withhold’ vote recommendation, advising shareholders to vote against or withhold from directors until the adverse provision is reversed or removed. Currently, it considers problematic governance provisions to include issues like multi-class share structures with unequal voting rights; supermajority voting requirements for charter or bylaw amendments; and provisions that impose additional conditions on submission of shareholder proposals or initiation of derivative suits.
In the Survey, ISS asks for feedback on this perpetual withhold recommendation, soliciting views on both the length and scope of adverse voting recommendations. The scope is addressed through choices such as holding accountable only the chair of the committee responsible for governance oversight, all members of that committee, escalation over time to additional directors, and none of the above. This suggests ISS may be willing to introduce more nuance into its approach to governance structures that it deems problematic, potentially limiting the duration of adverse recommendations or tailoring their application based on the severity of the concern.
D. Potential Semiannual Financial Reports (Question 30)
ISS asks for input on the respondent’s view of the SEC’s recent proposed rule that would allow public companies to opt for semiannual reporting. It offers options that characterize a move to semiannual reporting as a positive step (for example, reducing short-termism), a negative one (for example, heightening volatility and tilting the playing field toward those with access to non-public information), a decision best left to the board, or a change appropriate only for smaller companies. For more on the SEC’s proposal, please see our post on the topic here.
ISS currently does not have a policy on reporting cadence, so the question suggests it is considering whether it would need one if the semiannual reporting proposal is adopted. The question also highlights the possibility that a company could move to semiannual reporting without shareholder approval. That detail may indicate where ISS is headed: because a board could make the switch on its own, shareholders would have no direct vote on it, and any check would have to run through director elections. As such, it may not be unreasonable to expect that ISS could treat a board’s reporting-cadence decision as a matter of director accountability.
E. Discretionary Bonus Programs (Questions 32-33)
Annual executive bonus programs at large U.S. financial institutions are frequently determined through committee discretion, often in the interest of mitigating the concern that overly prescriptive compensation programs may create misaligned incentives that encourage excessive risk-taking, which has unfortunately materialized for large financial institutions in the past. Under ISS’ current policy, fully discretionary bonus programs are generally identified as a concern in the qualitative pay-for-performance evaluation without regard to sector-specific considerations.
In the Survey, ISS asks for feedback on whether a discretionary bonus program should continue to be viewed as a structural concern in pay-for-performance evaluations for U.S. financial services companies, including whether any concerns may be mitigated by increased disclosure regarding the use of discretion. While the ISS pay-for-performance evaluation is currently sector-agnostic, these questions signal that ISS may be interested in incorporating more sector-specific considerations into its evaluation methodology where a particular sector has identified a unique concern.
F. Say-on-Pay Responsiveness (Questions 34-36)
The vast majority of U.S. public companies currently hold an annual say-on-pay vote, which is the primary method by which ISS, and shareholders, express support or concerns regarding executive pay practices. For the minority of companies that do not hold a regular say-on-pay vote, ISS adverse vote recommendations are typically applied against the election of incumbent compensation committee members. The SEC’s May 2026 proposed rules to simplify filer categories, if adopted, would significantly increase the number of companies exempt from say-on-pay voting requirements. For more on the SEC’s proposal, please see our post on the topic here.
In light of this potential rule change, ISS asks for input on the appropriate approach for ISS to take to signal any significant concerns regarding executive pay when no say-on-pay vote is on the ballot, including whether a recommendation against all incumbent compensation committee members on the ballot would continue to be appropriate or whether a more targeted approach (e.g., a recommendation against only the compensation committee chair in the first year of concern) should be taken.
In addition, ISS asks how it should evaluate say-on-pay board responsiveness in the absence of a say-on-pay voting result. Currently, if shareholder support for say-on-pay at the last annual meeting was below 70%, ISS gives particular scrutiny to the company’s disclosed response to its prior say-on-pay vote, including shareholder engagement efforts and any actions taken to address the issues that contributed to low support. In the event ISS expresses concern regarding a company’s executive pay practices through adverse director vote recommendations (in the absence of a say-on-pay vote), ISS asks whether it should maintain 70% as the appropriate support threshold or whether a lower (e.g., the 50% director election threshold) or different threshold should apply.
These questions highlight how ISS may consider adjusting its say-on-pay framework in the face of a potential decrease in annual say-on-pay votes, including how its voting policies and recommendations can remain relevant for shaping executive compensation programs and practices at U.S. public companies.
G. Long-Term Incentive Performance Goal Disclosure (Questions 38-40)
Under ISS’ current policy, the non-disclosure of forward-looking long-term incentive performance targets is a negative factor in the pay-for-performance qualitative evaluation. In the Survey, ISS asks for feedback on whether the risk of competitive harm may be a compelling rationale for the non-disclosure of such targets, including whether that harm may be a more compelling rationale for exclusion in the case of absolute versus relative performance goals.
SEC rules do not require the disclosure of forward-looking long-term incentive performance targets, and despite the current ISS policy, many companies choose not to disclose these targets on the basis that disclosure of specific metrics raises the risk of competitive harm. These questions suggest that ISS may be open to non-disclosure of such targets in exchange for either company disclosure of the rationale for such non-disclosure, or comprehensive retrospective disclosure of the performance targets and results after the award cycle is completed (as is required by the SEC rules).
Two sets of questions address board and company accountability for sustainability-related disclosures. The first (Questions 63-66) asks, through two scenarios, whether directors should be held accountable when a company reduces its environmental and climate-related disclosures. In the first scenario, the reduction follows regulatory developments that make disclosure requirements less stringent (or does away with them completely, like with the SEC climate rules). In the second, the company attributes the reduction in disclosure to a potential increase in legal or financial risk exposure. For each scenario, ISS offers a scale of director accountability, ranging from none to fully accountable.
The second set (Questions 67-72) turns to nature-related risks. As framed in the Survey, these are the risks arising from a company’s dependencies on ecosystems and its impacts on the natural environment, which can translate into financial risk exposure, such as supply chain disruption, regulatory changes (for example, deforestation rules), and shifting market expectations. ISS asks whether it is appropriate to expect companies with significant exposure to such risks to disclose under a recognized framework, such as the Taskforce on Nature-related Financial Disclosures (TNFD). It also asks whether respondents have considered nature-related risks and opportunities, and which frameworks they have used or are weighing.
Together, these questions suggest that sustainability disclosure remains a live governance issue for ISS, even as U.S. regulatory requirements recede. Companies paring back climate disclosures should not assume the topic is dormant. ISS appears to view climate disclosure as a full package within the broader context of a company’s disclosure controls and governance over risk management, rather than a matter of meeting minimum SEC requirements, and nature-related disclosure may be the next area to watch.
Looking Ahead to 2027
The questions above give insight into not only the general issues of interest for ISS, but also the potential changes to ISS guidance for the upcoming year, as it considers the survey responses as part of its 2027 policy development. In addition to the annual surveys, ISS will later open a public comment period on major policy changes proposed for 2027, which will provide a more direct indication of any changes to come.