Frequently Asked Questions

What is the Investor Stewardship Group (ISG)?

The Investor Stewardship Group is a collective of some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts. It was formed to develop a sustained initiative to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct. The ISG is being led by the senior corporate governance practitioners at institutional investor and investment management firms.

What is the Primary Purpose of ISG’s Framework for U.S. Stewardship and Governance?

    The framework serves multiple purposes, including that it

  • Outlines the commitment to accountability that institutional investors are making to their clients/beneficiaries and articulates standards that investors will consider when evaluating the companies in which they invest.
  • Codifies the fundamentals of good corporate governance and establishes baseline expectations for U.S. corporations and their institutional shareholders.
  • Affirms investment managers’ responsibility for engagement and proxy voting policies and decisions, regardless of how they may use services offered by third parties.

Why was ISG Formed?

The professional experience of the members’ senior corporate governance practitioners over a number of years has shown that good corporate governance and responsible stewardship are fundamental to creating long-term value for U.S. companies and the broader U.S. economy. The ISG was formed to bring all types of investors together to enable them to speak with one voice on these fundamental issues of corporate governance and investment stewardship. The result is a framework consisting of a set of stewardship principles for institutional investors and corporate governance principles for U.S. listed companies.

What are the Principles that Make Up the Framework?

      There are six investor stewardship principles and six corporate governance principles. They are:


STEWARDSHIP PRINCIPLES for INSTITUTIONAL Investors:

    • Principle A: Institutional investors are accountable to those whose money they invest.
    • Principle B: Institutional investors should demonstrate how they evaluate corporate governance factors with respect to the companies in which they invest.
    • Principle C: Institutional investors should disclose, in general terms, how they manage potential conflicts of interest that may arise in their proxy voting and engagement activities.
    • Principle D: Institutional investors are responsible for proxy voting decisions and should monitor the relevant activities and policies of third parties that advise them on those decisions.
    • Principle E: Institutional investors should address and attempt to resolve differences with companies in a constructive and pragmatic manner.
    • Principle F: Institutional investors should work together, where appropriate, to encourage the adoption and implementation of these corporate governance and stewardship principles.


Corporate Governance PRINCIPLES for U.S. Listed Companies [1]:

  • Principle 1: Boards are accountable to shareholders.
  • Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interests.
  • Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives.
  • Principle 4: Boards should have a strong, independent leadership structure.
  • Principle 5: Boards should adopt structures and practices that enhance their effectiveness.
  • Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company.

[1] The Corporate Governance principles do not apply to U.S.-registered investment companies and business development companies, because they are not operating companies and have unique corporate governance practices as provided by law.

Are Investors and Companies Required to Strictly Adhere to the Framework?

No, the framework is not intended to be prescriptive or comprehensive in nature. Companies and investors are free to apply it in a manner they deem appropriate. However, as guidance, we have provided our rationale and expectations that underpin each principle. All founding members of the ISG agree on the framework, though members may have higher expectations with respect to corporate governance practices.

We encourage shareholders’ elected representatives — company directors — to apply the corporate governance principles at the companies on whose boards they serve, and we encourage institutional investors to incorporate these principles into their proxy voting and engagement guidelines and practices.

When Does the Framework Go into Effect?

The framework goes into effect January 1, 2018 to enable U.S. listed companies time to adjust to the corporate governance principles in advance of the 2018 proxy season.

Will the Framework Be Updated or Amended Over Time? If So, When?

The framework is not intended to be static. It will be evaluated and revised by the ISG membership periodically as warranted by the evolution of the corporate governance and stewardship landscapes.

How is the ISG Governed?

The founding members have created a steering committee that will establish the governing framework for the ISG. It is expected that the steering committee will be in place through January 1, 2018 when the framework becomes effective. More information about ISG’s governance will be posted as soon as it is available. All members of the ISG will be welcome to participate in the governance process once it is established.

How is this Different from other Governance Efforts?

  • The ISG was founded by a global group of institutional investors managing in excess of $17 trillion, largely comprising the retirement and long-term savings of millions of individual investors around the world.
  • The framework is the result of a two-year effort by the ISG’s corporate governance professionals, and reflects commonly held standards of corporate governance and investment stewardship practices fundamental to long-term value creation and protection of U.S. listed companies.
  • The framework is dynamic and was formed to grow its membership, as other institutional investors sign on to its principles. By signing onto or endorsing the framework, institutional investors are encouraging U.S. public companies and boards to voluntarily adopt certain corporate governance and board practices.
  • The framework is the only investor-led effort in the world to develop a structure for both corporate governance and investment stewardship for a specific market.

What is the difference between a Signatory and an Endorser?

  • U.S. and International investors who already have a set of corporate governance and stewardship principles aligned with the framework can become signatories. Investors who may not already have a set of corporate governance and stewardship principles can also sign the framework and adopt its principles as their policy guidelines.
  • International investors with home-country governance or stewardship principles, or who have signed corporate governance or stewardship codes in other jurisdictions that may be inconsistent with the framework, can endorse the framework to demonstrate their support for these US-specific corporate governance and stewardship principles.

What Can my Organization do to Support the Framework?

We invite all asset managers and asset owners investing in the U.S. capital markets to join us in this historic effort by signing onto or endorsing the framework. Simply visit www.isgframework.org/join-isg. Please note that the endorsement option is available only to non-U.S. institutions investing in the U.S. market.

Who Monitors the ISG Members’ Governance and Stewardship Policies?

The ISG is a voluntary group and members are expected to self-police. Potential members must review their policies before joining to make sure that they conform to the framework. Members should periodically review their governance and stewardship policies to ensure that they remain consistent with the framework.

Which Firms are the Founding Signatories and Endorsers ?

US Asset Managers:

  • BlackRock
  • MFS
  • State Street Global Advisors
  • TIAA Investments
  • T. Rowe Price
  • Vanguard
  • ValueAct Capital
  • Wellington Management

US Asset Owners:

  • CalSTRS
  • Florida State Board of Administration (SBA)
  • Washington State Investment Board

Ex-US Asset Owners/Managers:

  • GIC Private Limited (Singapore’s Sovereign Wealth Fund)
  • Legal and General Investment Managemen
  • MN Netherlands
  • PGGM
  • Royal Bank of Canada Global Asset Management

How Can I get Specific Questions Answered?

Email your specific queries to info@isgframework.org and someone will be in contact with you.