Last week, I blogged about how ISS has released its updated proxy voting guidelines for 2026. We now have this Cooley Alert that delves into what ISS has changed in greater detail. Here’s an excerpt:
“Shareholder proposals
Referencing changing investor sentiment and low support at annual meetings, the 2026 policy update includes significant changes to ISS’ approach to E&S shareholder proposals, replacing a previous presumption of support for many of the most common proposal topics with a case-by-case approach. This change applies to voting policies for climate risk reporting, greenhouse gas reporting, diversity practices and data disclosure, company or supply chain human rights reporting, and political contributions disclosure proposals.
ISS also updated its global policy approach on E&S proposals to expand the list of factors considered in its case-by-case analysis to include the proposal’s impact on shareholder interests and rights. These changes are likely responsive to complaints from industry groups and political actors that proxy advisors have favored environmental, social and governance (ESG) proposals without regard to company-specific considerations or a connection to shareholder returns.
ISS’ 2026 policy updates do not address the SEC’s recent announcement that it will not be providing substantive Rule 14a-8 no action responses for the 2026 proxy season and will only provide a generic “no objection” response to companies that represent they have a reasonable basis to exclude proposals under Rule 14a-8. Under its existing Procedures & Policies, ISS will recommend against individual directors or the full board if a company omits a shareholder proposal from its proxy statement unless the company has received SEC no-action relief, a voluntary withdrawal or U.S. District Court ruling.
Given the change of circumstances, it is unlikely that ISS will uniformly recommend against directors if companies choose to exclude proposals, especially where there are clear procedural or substantive deficiencies, though ISS presumably does not have an appetite for taking on the SEC’s former role and evaluating the bases for exclusion for individual proposals on a case-by-case basis.”
Authored by
Broc Romanek