Publication

Institutional Shareholder Services (ISS), the largest and most influential proxy advisory firm, has recently taken an increased interest in the role of external auditors and the audit committee. This is an important development because many investors, as well as other stakeholders, rely on ISS to help assess corporate governance at public companies. ISS provides investors with reports on individual companies; these reports include recommendations on how to vote on proxy ballot questions. In its 2018 Governance Principles Survey, which it uses to help set its benchmark policies, ISS included new questions about auditor ratification and audit committees. While no changes to policies on these issues are planned for the US market in 2019 these questions raise the possibility of future changes in its policies and recommendations on audit.

On October 19, 2018, Audit Committee Leadership Network (ACLN) members met with Marc Goldstein, head of US research at ISS, in Washington, DC, to discuss ISS policy and its recent interest in questions on auditor ratification and audit committees.