ISS & Glass Lewis 2025 Proxy Voting Guidelines
ISS and Glass Lewis have recently released their updated proxy voting guidelines for 2025, introducing several key changes that UK companies and investors should be aware of.
ISS Proxy Voting Guidelines: Key Changes
Effective for shareholder meetings from 1 February 2025, the following updates have been made:
- Diversity Reporting Clarified: The FCA requires listed companies to report progress against gender and ethnic diversity targets, rather than mandating that they meet these targets.
- Simplified Listing Categories: The previous “premium” and “standard” listings have been replaced by the new UKLR category: “equity shares (commercial companies).”
- Increased Pay Transparency: Reflecting updates from the Investment Association, there is now a stronger focus on clear disclosure of malus and clawback provisions in executive remuneration. More information can be found in our Q&A.
- Removal of Remuneration Cap: The Capital Requirements Directive section has been removed as UK banks and investment firms are no longer subject to a cap on variable pay relative to fixed pay.
- Updated Governance Code Recognition: ISS now acknowledges the revised QCA Corporate Governance Code, recommending that companies present remuneration reports and policies for annual advisory shareholder votes, even if a binding vote is not required.
Glass Lewis Proxy Voting Guidelines: Notable Updates
Glass Lewis has also introduced important updates for 2025:
- Director Tenure Flexibility: Glass Lewis will now consider the justification for extending a board chair’s tenure beyond nine years on a case-by-case basis.
- Stronger Diversity Standards: Glass Lewis will generally recommend voting against the chair of the nomination committee if:
- A Main Market board has fewer than two gender-diverse directors.
- A FTSE 350 board has not appointed at least one ethnically diverse director.
Final Thoughts
Both ISS and Glass Lewis are placing greater emphasis on diversity, transparency, and executive accountability. Boards should carefully review these updates and ensure their governance practices align with evolving investor expectations.
#CorporateGovernance #ProxyVoting #ISS #GlassLewis #DiversityAndInclusion #ExecutivePay #BoardroomTrends
