2009-11-20 14:41:06 -

RiskMetrics Group (NYSE: RMG), a leading provider of risk management and corporate governance services to the global financial community, today released its 2010 updates to its benchmark proxy voting guidelines.

These global updates are developed as part of an extensive process that includes broad-based outreach to financial market participants.
RiskMetrics’ governance analysts will begin applying the updated policies to all

companies with shareholder meeting dates on or after February 1, 2010.

“RiskMetrics’ uniquely transparent policy formulation process lays the groundwork for the broad range of proxy voting policies employed by our clients,” said Stephen Harvey, Head of RiskMetrics’ Governance Business.

“Investors are faced with ever more complex voting issues and we are pleased to provide them with expert guidance on critical issues plus unbiased analysis on thousands of company meetings.”


The 2010 policy updates address the governance issues stemming from a rapidly evolving regulatory environment and ongoing investor frustration with the global financial crisis. As a result, in the U.S., RiskMetrics’ key policy updates address important topics surrounding board accountability and executive compensation, including poison pills, director independence, long-term pay-for-performance alignment and management say-on-pay.

“Around the world, investors are focusing on increased accountability, improved transparency and more effective engagement,” said Dr. Martha Carter, Head of Governance Research and Chair of the Global Policy Board at RiskMetrics Group. “This year’s policy updates are driven by a recognition that investors and boards share responsibility for value creation.”


Regarding poison pills, 43 percent of investors who participated in RiskMetrics’ 2010 Policy Survey view non-approved shareholder rights plans as the most highly problematic takeover defense. Therefore, RiskMetrics’ is adding vote recommendations on one-year poison pills, and will review long-term pills every three years, and recommend withhold or against if the pill is still in place without shareholder approval.

Also, 52 percent of investors that participated in the 2010 Policy Survey indicated the management say-on-pay proposal should be the primary vehicle to initially address problematic pay practices. As such, if concerns raised in management say-on-pay proposals is not sufficiently addressed in the subsequent year, RiskMetrics may recommend withhold or against votes on Compensation Committee members.

“Executive compensation is still a hot button issue for shareholders, and the global financial crisis raised new concerns about incentives that influence executive behavior,” added Dr. Carter. “To better align with investors’ needs, we will evaluate additional factors such as aligning long-term pay-for-performance and risk-motivating incentive practices as part of overall executive compensation practices.”

Based on market trends, RiskMetrics’ has also updated its evaluation of director independence, particularly as it relates to both professional and transactional services, to reflect a more pragmatic approach.

Specifically, the materiality test for transactional relationships will be bifurcated to reflect companies’ exchange listing.

Globally, other policy updates focus on issues such as slate ballots and management say-on-pay in Canada, combined Chairman and CEO roles in Europe, and board independence in Japan and Israel. The entire 2010 global policy updates are accessible through RiskMetrics’ online Policy Gateway at www.riskmetrics.com/policy : .
The Gateway also contains helpful FAQs, summaries of outreach efforts, and other informational resources to provide all market participants with a better understanding of how RiskMetrics formulates and applies its updates.

Also, on December 10 at 1 p.m. EST, RiskMetrics will host a webcast to review its 2010 policy updates. To register for the webcast, please visit: www.riskmetrics.com/webcasts/2010policy_perspectives : .



About RiskMetrics Group

RiskMetrics Group is a leading provider of risk management and corporate governance products and services to participants in the global financial markets. By bringing transparency, expertise and access to the financial markets, RiskMetrics Group helps investors better understand and manage the risks associated with their financial holdings. Our solutions address a broad spectrum of risk across our clients' financial assets.

Headquartered in New York with 20 global offices, RiskMetrics Group services some of the most prestigious institutions and corporations worldwide. For more information, please visit, www.riskmetrics.com : .



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