13 February 2017

New principles proposed for corporate governance in US

A two-year effort by major US institutional investors and their international counterparts resulted in the launch of the Investor Stewardship Group (ISG) on 31 January 2017. The associated Framework for US Stewardship and Governance consists of six stewardship principles for institutional investors and six corporate governance principles for US listed companies. A voluntary code on corporate governance is fairly new for the US; the first example of this type of code – the Common Sense Principles of Corporate Governance – was launched only six months ago. In the US, the distance between boards and shareholders is greater than in continental Europe. The ISG hopes the framework will help to overcome this. The framework’s principles promote long-term value creation and responsible engagement, providing conduct rules independent of proxy advisory firm guidelines. The framework is effective from 1 January 2018 and applies to the 2018 proxy and annual reporting season.

Below are links to the various principles.