A System Stewardship Response to ISS’ Policy Survey

We have provided our responses to the ISS 2023 Policy Survey.

Our responses are largely based on the observation that the ISS benchmark voting guidelines are not designed to serve the average institutional investor, who holds a diversified portfolio or is managing assets on behalf of diversified beneficiaries.

Despite the diversified nature of most investors, the ISS benchmark voting guidelines operate under an assumption that voting recommendations should be calculated to optimize the returns at the individual company at which shares are being voted, without regard to systemic or portfolio impact.

But because the voting choices that maximize returns at individual companies may not adequately address systemic risks that companies create, such a policy does not optimize the return of the diversified portfolios of most institutional asset owners. Read our full submission here.