Published earlier this week, ISS released its 2026 Benchmark Policy Updates, effective for shareholder meetings held on or after February 1, 2026.
One of the most consequential shifts in the newly released standards is that the proxy advisory will recommend voting against directors at companies with multi-class share structures, unless specific exceptions apply.
Notably, ISS would permit support where the structure involves convertible preferred shares evaluated on an ‘as-converted’ basis and this treatment applies regardless of whether the multi-class shares are common or preferred. This marks a significant tightening of policy around capital structures and voting rights, reinforcing investor expectations for equal treatment of shareholders.
Alongside this change, ISS has also introduced two other key global updates: a new five-year time horizon in its pay-for-performance analysis, and a reclassification of unusually highly paid non-executive directors, who may now be flagged differently depending on the nature of their compensation.
Across the Americas, Asia Pacific and EMEA regions, the updates tighten standards on board independence, remuneration, capital structures, shareholder meetings as well as disclosure practices.
Americas
In the Americas, ISS has refined its guidance on director elections, equity compensation and takeover defences. In Latin America (excluding Brazil), directors should be elected individually if the board falls below independence thresholds, with independent nominees supported and non-independent nominees opposed. Equity plans are now more rigorously evaluated with plans lacking key disclosures, three-year minimum vesting, performance hurdles or that have maximum dilution exceeding 5 percent of issued capital are subject to a negative recommendation.
For US companies, ISS clarified its stance on shareholder rights plans also known as a ‘poison pill’, particularly those with dead hand or slow hand features (which are attempts to limit the discretion of a future board to amend or redeem the rights). Short-term pills (one year or less) will be assessed case by case, considering rationale, market capitalisation and shareholder approval for renewal. These updates underscore the importance of transparency and accountability in board and compensation practices, ISS says.
Asia Pacific
The Asia Pacific updates focus on director independence, equity compensation and audit transparency. In India, the independence definition is tightened with nominees or affiliates that are serving over ten years having to observe a three-year cooling-off period. Equity plans are assessed for vesting periods, dilution (capped at 5 percent), discounting and plan administration by beneficiaries.
Hong Kong updates reflect changes to share repurchase rules, allowing treasury shares to be resold rather than cancelled. In Malaysia and Thailand, ISS emphasises that it will scrutinize overboarded directors, while in Indonesia, audit committees must ensure fee disclosure and independence to strengthen investor confidence. These changes reflect growing regional investor focus on board accountability and governance transparency.
EMEA
Over in the EMEA region, the updates highlight auditor appointments, board independence, meeting formats and executive compensation. European companies should ensure auditor reappointments and fee-setting are transparent, accounting for local rotation rules. In Spain, unbundled director elections face stricter evaluation. Nordic markets now apply a consistent independence classification, while Portugal introduces tighter overboarding guidance.
Virtual-only shareholder meetings are assessed on a case-by-case, focusing on shareholder rights and meeting justification. Remuneration committees in European banks and investment firms must align pay with Capital Requirements Directive V ratios. Long-term incentive plans are subject to stricter dilution limits (5 percent for executive schemes, 10 percent for other share-grant schemes), with ISS evaluating plan complexity, payout caps and alignment with strategy.
Sharpened focus
Across all regions, ISS is sharpening its evaluation criteria and raising governance standards. Companies should:
Review board composition and independence thresholds, especially in India, Latin America and EMEA Reassess equity plans and dilution limits, ensuring vesting and disclosure meet ISS expectations Evaluate takeover defences, poison pills, and shareholder approval mechanisms Strengthen meeting formats and transparency, particularly for virtual or hybrid setups Ensure auditor independence and fee transparency, with clear reporting to shareholders.Investors benefit from clearer voting criteria and engagement points, particularly around board independence, remuneration practices and capital structure proposals.
ISS’ benchmark policy updates demonstrate that governance expectations are advancing globally. Companies that align practices with these updated policies will be better positioned for the upcoming proxy season. ISS is sending a clear message: good governance cannot remain static and proactive adaptation is needed to maintain investor confidence and credibility.