Institutional Shareholder Services: The Uninvited Guest at the Equity Table

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Title:
Institutional Shareholder Services: The Uninvited Guest at the Equity Table
Year: 
2010
Publication: 
Stanford Closer Look Series
Volume: 
CGRP01
Issue: 
May 17, 2010
Start Page: 
1
End Page: 
5
Publisher: 
Stanford University
Language: 
English
URL: 
http://www.gsb.stanford.edu/sites/default/files/documents/CGRP01-RiskMetrics_1.pdf
Select license: 
No License (All right reserved)
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Abstract:

RiskMetrics: The Uninvited Guest at the Equity Table

Monday, May 17th, 2010

Closer Look Series: Topics, Issues and Controversies in Corporate Governance, No. CGRP-1, By David F. Larcker, James Irvin Miller Professor of Accounting, Director of Stanford Graduate School of Business Corporate Governance Research Program And Brian Tayan,  Stanford GSB casewriter and MBA ’03 Date: 05-17-2010

In recent years, RiskMetrics Governance Services (RMG) has played an influential role in the proxy voting process. According to some estimates, a recommendation by RMG can sway a proxy vote by 15 to 20 percent.

Several companies are highly critical of RMG and the methodology it uses to inform its recommendations—particularly as they relate to equity-based compensation plans. RMG believes that its methodology is both rigorous and objective.

We take a closer look and highlight some key issues and reasons for concern.

 

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