March 2, 2010

ISS…er, RiskMetrics…Sold (Again)

Yesterday, RiskMetrics announced it had been sold to MSCI at a price not far from RiskMetrics’ IPO price level when it went public two years ago. Based on the conference call related to the deal, MSCI’s CEO stated in response to questions that the ISS corporate governance services are considered a “non-core” unit that will be operated to generate cash flow for debt reduction. MSCI is a provider of investment decision support tools.

My guess is that nothing much will change for those of us that deal with ISS – but you never know. I do think the ISS branding will come back to where it used to be (ie. without the “MSCI” label before it). By my count, this is the fourth sale of ISS during this decade…

One thing that could change now that RiskMetrics will no longer be a public company is a company that pushed the envelope with it’s own corporate governance practices. RiskMetrics really help itself up to high governance standards once it went public. As one member noted: “Did you know that MSCI’s CGQ is better than 2.3% of S&P 400 companies and 22.7% of Diversified Financials companies?”

US Sentencing Commission Proposes New Requirements

Below is news taken from Sullivan & Cromwell‘s memo on the topic:

On January 21st, the U.S. Sentencing Commission proposed important amendments to the Sentencing Guidelines applicable to organizations, including the definition of what constitutes an effective corporate compliance program. Because the Sentencing Guidelines serve as a principal reference point under federal law for minimum standards in the design and structure of compliance programs, corporations should examine their programs to determine whether they comply with these proposed standards.

As described in our memo, the proposed amendments address four important areas: (1) the steps a corporation should take when responding to the discovery of criminal conduct; (2) document retention policies; (3) the use of independent corporate monitors; and (4) the governance of corporate compliance functions.

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– Broc Romanek