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July 26, 2014

Institutional Shareholder Services ("ISS") Announces New Governance QuickScore Will Replace Governance Risk Indicators (GRId) to Identify Risks Within a Company

Institutional Shareholder Services (ISS) recently announced that, effective in late February or early March, it is replacing its Governance Risk Indicators (GRId) database with the new ISS Governance QuickScore (QuickScore), which is designed to quantitatively identify risks within a company.

Although GRId and QuickScore both attempt to measure governance risk, QuickScore is a more quantitatively driven system that searches for relationships between governance factors and important financial metrics, with an overlay that aligns qualitative aspects of governance with ISS policy. The quantitative methodology is based on ISS’s best practices as to numerous governance factors. Additionally, where GRId provided a color-coded scoring of qualitative risk factors, QuickScore assigns a numeric score based on four governance dimensions: board, compensation, shareholder rights and audit.

Initially, QuickScore will rate over 4,000 companies within 25 markets, including the 3,000 largest US companies by market cap, the 250 largest Canadian companies by market cap and United Kingdom, Europe, Japan and Asia Pacific companies in the MSCI-EAFE index. Companies rated by QuickScore have been granted access to ISS’s free data verification site, where they can review data ISS has collected on the QuickScore factors. Companies will have the ability to submit requests to ISS for data changes or updates through this site until February 15, at which time it will close until QuickScore is launched. ISS intends to begin including a covered company’s QuickScore in its proxy research reports beginning in late February or early March.

Additional information regarding QuickScore is available here.

©2014 Katten Muchin Rosenman LLP

About the Author

Mark D. Wood, Energy Attorney, Katten Muchin Law firm
Partner

Mark D. Wood is head of Katten's Securities practice and concentrates in corporate and securities law. Mark represents public companies, issuers and investment banks in initial public offerings (IPOs) and other public offerings, private investment in public equity (PIPE) transactions, debt securities and other securities matters.

312-902-5493

About the Author

Kathleen H. Moriarty, financial institutions attorney, katten muchin law firm
Partner

Kathleen H. Moriarty has extensive experience representing investment companies with the creation, structuring and development of new exchange-traded products. Kathleen was actively involved in the development of Standard & Poor's Depository Receipts (SPDRs) and has since advised on the creation of many more exchange-traded funds (ETFs), including iShares, Vanguard Exchange-Traded Funds (VIPERS), ProShares, WisdomTree and IndexIQ.

212-940-6304

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