The proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) recently issued its 2012 proxy voting policy updates (the “Policy Updates”), as well as a new version of its Governance Risk Indicators (GRId) model (“GRId 2.0”). The Policy Updates, which apply to shareholder meetings on or after February 1, 2012, focus on pay-for-performance analysis and board response to say-on-pay votes. The GRId updates, effective February 24, 2012, include changes to content and methodology designed to better align GRId ratings with ISS proxy voting guidelines.

Given ISS’ influence in today’s compensation and governance environment, many public companies will want to consider the Policy Updates and GRId 2.0 in evaluating whether aspects of their governance or compensation practices should be modified. Companies also should take care to ensure that favorable compensation and governance practices are disclosed – or questionable practices explained – in their public filings so that ISS will have the benefit of such information when evaluating a company’s practices.