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Back to Thought Leadership


COVID-19 and the Proxy Agencies

25 March 2020

Proxy Advisory Agencies

Given the anticipated reduced staff and ‘crisis mode’ of working adopted by some smaller institutional investors, proxy advisers, like ISS and Glass Lewis, will bear even more significance on the proxy voting process. It is expected that within this unprecedented landscape, institutional investors’ reliance on proxy adviser reports will increase, especially during the peak AGM period of May and June, especially with hundreds of remuneration policies being renewed this year. As such, we wanted to better understand the proxy advisers’ business continuity plans. This includes how they might intend to uphold their ‘service level agreements’ with their institutional investor clients, and how they engage with you, the corporate companies, that they grade. Therefore, we called our senior contacts at each of the proxy advisers, posed them our key questions, and below is what they told us.

In brief, the proxy advisers spoken to have reported: 1) a continuity of business, with their research teams now working from home, 2) that whilst they wish to maintain a good level of engagement with issuing companies, ISS and Glass Lewis are reducing these to ‘truly exceptional’ or high profile cases, and 3) that they intend to uphold their deadlines and ‘service level agreements’ to their institutional investor clients and issuing companies, although this is very much a ‘watch and see’ situation.

The confirmation of these important stakeholders’ well-being is comforting, and we do hope that their promises around service levels will indeed materialise over the peak AGM season, which will now likely see significant disruption or delays due to the UK’s effective ‘lock-down’ and the banning of congregation of individuals.

It will therefore be down to Boudicca to double down on our duty to ensure on behalf of our clients that we:

  • Stay close to the proxy advisers;
  • Communicate to them the timely release of information that could affect their report drafting (e.g. releases of annual reports, notices of AGMs);
  • Inform them of any changes of logistics to forthcoming AGMs;
  • Offer up engagement to clarify complex concepts (e.g. remuneration); and
  • Help to procure draft reports and respond to these accordingly for highest accuracy.


ISS last week published a short two-page Special Situations Research Note, entitled ‘Coronavirus and the 2020 Proxy Contest Season’, in which they forecast the effects of the fallout of coronavirus on shareholder activism. Whilst ISS are predicting the delaying of existing activism, ultimately they are projecting an increase in activism as a consequence of the fallout of the pandemic, saying: ‘Much like the 2009 surge in contests coincided with the recovery from the 2008 financial crisis, we may see an uptick in full-blown contests in 2020/2021, once the market begins to climb out of the coronavirus dip, even if we are unlikely to break the 40-contest mark again.’

As regard to ISS’ business continuity and service level agreements at a time of COVID-19, our day to day interactions with them do not appear to been overly impacted, although responses via email, their preferred mode of communications, was slower last week than what the Boudicca Corporate Governance Team would normally experience. In addition, one-to-one contact by phone is now strictly to mobile numbers (if one is lucky enough to have these!), with the ISS Senior Analysts working from home. We had a call today with the UK Head of Research to pose our questions and this was the outcome:

  • Business continuity / contingencies – ISS now have everyone fully up and running from home. The transition took some IT time out of their days last week, but all is back to normal now.
  • How will the pandemic affect your pre-AGM engagement process with issuers? ISS have now shut down all but truly exceptional, high profile (i.e. FTSE top issuers) pre-AGM engagement. They are not taking undertaking any ‘low priority’ remuneration consultations at this point.
  • Will ISS still provide draft reports for review by issuers? In the normal course, ISS will certainly aim to share pre-publication drafts, and are currently definitely doing this. There may be a point later in the season where this may no longer be possible, especially if a large number of companies come in with same/similar AGM dates and on shorter than normal notice.
  • Are your service level agreements and reporting delivery times impacted? ISS are currently a little behind where they would like to be at this time of year, but they also commented that their report queue is not as dense as it should be around this time (with companies deferring their AGMs). Publication of reports is aimed at 14 days before an AGM (with a hard stop at 13 days).
  • Can Boudicca help by sending you Annual Reports of our clients (ahead of Notices of AGM)? ISS would be happy to receive Annual Reports from Boudicca that includes a note advising that the notice of AGM will be published later, if this is the case. Best to copy to ensure this group inputs the information onto the ISS system. From an ISS operational standpoint, they will not release an AGM for their UK research team to review until the notice of AGM is available. This is due to data collection points depending on agenda items.

ISS are looking at how best to deal with equity awards given share price falls across the board. They have consulted with several of their institutional investor clients and have participated in corporate governance forums, and the view is mixed with the environment constantly in flux. They have shared some insights on how they might handle the situation, and if you would like to discuss these insights, please contact our Principal Corporate Governance Officer, Karoline Herms, directly here.


Glass Lewis

  • Business continuity / contingencies – Glass Lewis are working business-as-usual, but from home. They are keeping an eye out for company materials that they would have expected to have been published (using last year’s lead times) and will chase companies for expected publication dates.
  • How will the pandemic affect your pre-AGM engagement process with issuers? Not affected – on 10 March, Glass Lewis’ Engagement Manager informed of their ‘2020 Proxy Season blackout period’ (March-June) on engagement with issuers on AGM matters (this excludes M&A and activism). While they are currently technically within this period, Boudicca may still make engagement requests via email on behalf of issuers, and the Research Team facilitate these where there are particularly contentious proposals. They also reminded us that requests for corrections can always be made post-publication of their reports.
  • Will Glass Lewis still provide draft reports for review by issuers? Unlike ISS and PIRC, Glass Lewis provide issuers only the draft data section of their full report. They will continue to do this, and those companies that are registered for this process will generally get reviewed first with intended lead times of 26-28 days before the meeting (depending on the size of the company). Companies can register to receive the draft data report, known as ‘Issuer Data Report’ (‘IDR’) on their website ( or Boudicca can register directly with Glass Lewis’ Engagement Manager.
  • Are your service level agreements and reporting delivery times impacted? Currently, there is no drop in lead times, but this may be expected later in the season.
  • Can Boudicca help by sending you Annual Reports of our clients (ahead of Notices of AGM)? Meetings can be set up in the Glass Lewis system. An Annual Report may also be sent directly to Jennifer Thompson and Gillian Kelly (if you require their group email, please let us know), although the team will unlikely be able to review this prior to the Notice of AGM being released (exceptions may be made for large cap companies).

In terms of thought leadership around COVID-19, Glass Lewis have released a number of articles and policy changes on their website, including:

Further to the articles on their website regarding COVID-19, the Glass Lewis research team will publish a clarification on how Glass Lewis deal with equity awards during extraordinary times such as the one we are experiencing. This article will be on their blog by end of the week.


IVIS – Investment Association

  • Business continuity / contingencies – Yes, the IVIS team are all working from home and interactions are made via conference calls, video conference or other electronic means.
  • How will the pandemic affect your pre-AGM engagement process with issuers? IVIS continue to engage or ask questions where appropriate.
  • Will IVIS still provide draft reports for review by issuers? IVIS intend to maintain its current approach of providing drafts to issuers only where IVIS have red-topped an event. Companies who have not been red-topped will be provided reports once these are published.
  • Are your service level agreements and reporting delivery times impacted? This is an area that IVIS are continuing to monitor.
  • Can Boudicca help by sending you Annual Reports of our clients (ahead of Notices of AGM)? Please alert with the publication of any annual reports.



  • Business continuity / contingencies – It has been ‘business as usual’ at PIRC, with all researchers now working from home since last week. Despite homeworking, PIRC are still meeting their targets of c. five reports issued a day.
  • How will the pandemic affect your pre-AGM engagement process with issuers? PIRC engage very rarely with issuers as a standard, preferring that Boudicca and companies email them instead. They are adhering to this process Their engagement is limited to draft reports being sent to companies prior to the report being published.
  • Will PIRC still provide draft reports for review by issuers? Yes, PIRC will still send draft reports for review. PIRC’s usual deadline is 24 hours prior to publication, but as they found that response rate from companies has been slower than usual, they are willing to extend this to 48 hours, should this be required. Something to bear in mind.
  • Are your service level agreements and reporting delivery times impacted? As above, PIRC appear to be meeting their targets and deadlines, but they will inform Boudicca if this changes.
  • Can Boudicca help by sending you Annual Reports of our clients (ahead of Notices of AGM)? No help required in this respect, as PIRC do a check for published annual reports daily.

Further to the above, on 20 March, PIRC sent a letter to issuing companies urging them to suspend any variable executive pay from April until the end of the year – only salary allowed. So expect for more negative recommendations from PIRC on executive remuneration. If you would like to see a copy of the PIRC letter, please let us know.

From our perspective, with many companies forecasted to find it difficult to hit their targets this year, a downward adjustment and/or a reasoning of ‘it wasn’t management’s fault’ is unlikely to sit well with investors. As such, we would foresee that many companies will have very reduced bonus payouts.

Guidance from regulators, industry bodies and corporate advisers

There were plenty of updates and guidance released last week by regulators, industry bodies and advisers, as the market processes the impact of coronavirus on corporate practices. Below we list the most important updates from a Boudicca proxy and governance advisory perspective:

21/22 March: FCA writes to UK companies to delay preliminary results for ‘at least two weeks’

19 March: Share plans are not your top priority but they are not immune (good article on remuneration-related challenges)

17 March: ICSA AGM Guidance a ‘definitive’ and practical guide for AGM considerations

16 March: Guidance on audit issues arising from the Covid-19 (Coronavirus) pandemic

12 March: Implications for corporate governance and investor stewardship

Coronavirus-related resource microsites:

In our next updates, we will cover:

  • AGM Considerations – Impact of COVID-19 and the UK ‘lock down’ on the AGM season.
  • Proxy Voting by Shareholders – What the Boudicca team are hearing and observing from our continued engagement with institutional investors and retail brokers. In addition to AGMs, what special considerations need to be made for events, such as schemes of arrangements, which generally involve increased participation from retail shareholders.
  • Corporate Governance & Stewardship – Additional considerations for Boards around board composition, executive remuneration and ESG in the wake of coronavirus. We will also look at how this affects engagement with institutional investors. In the meantime, we point you to an article from Addleshaw Goddard, which we feel poignantly covers some important governance considerations

The Boudicca team is available around the clock to accommodate our clients’ evolving needs. Should you have any questions or wish to have a call with Boudicca’s Corporate Governance or Proxy Solicitation Teams, please let me know. Stay safe.