On October 29, 2014, Institutional Shareholder Services (ISS) released QuickScore 3.0, the latest version of its corporate governance scoring system for institutional investors. QuickScore 3.0 will launch on November 24, 2014, and be operational for the 2015 proxy season. Like previous versions, QuickScore 3.0 provides a score for each company that is intended to measure the company's level of corporate governance risk both overall and based on four broad pillars: board structure, audit and risk oversight, compensation/
remuneration, and shareholder rights. Once implemented, QuickScore 3.0 will support ISS voting policy and recommendations.

Companies have from 9:00 a.m. EST, November 3, 2014, to 8 p.m. EST, November 14, 2014, to verify the underlying raw data to be included in their QuickScore 3.0 scores and to submit updates and corrections through the ISS data review and verification site. New scores are expected to be released on November 24, 2014, and will then begin appearing in ISS research reports.

Key changes between QuickScore 2.0 and QuickScore 3.0 for U.S. companies are:

New Scored Factors

• Does the company disclose a policy requiring an annual performance evaluation of the board?
• Has ISS' review found that the board recently took action that materially reduces shareholder rights?
• Is there a sunset provision on the company's unequal voting structure?
• How many financial experts serve on the audit committee? (This question evaluates whether the company has disclosed at least one member of the audit committee with sufficient financial skills in audit and accounting. This factor was previously provided for informational purposes only and was not scored.)
• What is the number/proportion of women on the board? (This factor was previously provided for informational purposes only and was not scored.)

New Zero-Weight Factor (provided for informational purposes only, but no score)

• Does the company have a controlling shareholder?

Zero-Weight Factor That Will No Longer Be Scored

• Does the company's poison pill have a three year independent director evaluation (TIDE) provision?

Revisions to Other Factors

• Has a regulator initiated enforcement action against the company in the past two years? (This factor previously referred only to securities regulators and had a look-back of two fiscal years.)
• Has a regulator initiated enforcement action against a director or officer of the company in the past two years? (This factor previously referred only to securities regulators and had a look-back of two fiscal years.)
• What percentage of directors received shareholder approval rates below 80 percent? (This factor previously referred to shareholder approval rates below the "industry-index level.")
• Does the company's average 3-year equity grant rate exceed the greater of 2 percent and the average of its industry/index peers? (This factor previously referred to grant of awards at "excessive rate.")
• Did the most recent say on pay proposal receive shareholders' support below 70 percent? (This factor previously referred to shareholders' support "below the industry-index level.")

Additionally, each company's proxy report from ISS will now include a graphical summary of historical scores and governance changes made by the company over time and the impact of these changes on the company's score and governance risks.

Recommendation
All public companies should promptly review their data and submit updates and corrections to ISS during the verification period. Companies can access the free ISS data verification website at:

http://www.issgovernance.com/governance-solutions/investment-tools-data/quickscore/.