Institutional Shareholders Services will regard non-CEO directors at U.S. companies as “overboarded” if they sit on more than five corporate boards and recommend shareholders vote against their election, according to its update of its worldwide proxy-voting policies for 2016.
The change reduces ISS policy limit from six boards for a director to be considered as serving on too many boards to commit appropriate attention to them.
For CEOs of U.S. companies, ISS kept its policy limit at two boards other than their own companies.
For Canadian companies, ISS reduced the limit for non-CEO directors to four from six companies. For CEOs of Canadian companies, ISS reduced the limit to one outside company from two.
Both new overboarding policies will become effective as of February 2017 to allow “companies sufficient time to make any changes … should they wish to do so,” ISS said in a statement about the new policies.
The changes were among the modifications ISS adopted to its worldwide policies that will generally take effect after Jan. 31, 2016, and that were updated in an ISS process that included feedback from representatives of pension funds, foundations, endowments, investment management firms, corporations and others to proposed revisions.
