Bad governance is good business, at least for 19-year-old Institutional Shareholder Services. The Rockville, Marylandbased proxy voting adviser “has taken on the characteristics of a growth company over the past 24 to 36 months,” says John Connolly, the veteran high-tech consultant who last month was brought in to run ISS.
His brief: to turn the dominant U.S. proxy services firm into a global business providing diverse information and consulting services. “ISS’s way of thinking about and evaluating governance and accountability issues resonates globally,” contends Connolly, 51, who spent three years with IBM Business Consulting Services, most recently as manager of its financial services practice.
Less than 10 percent of the 360-employee, privately held ISS’s revenues come from abroad -- Europe, primarily -- and Connolly would like to substantially increase that proportion. Of the 12,000 shareholder meetings that ISS covers every year on behalf of its 950 corporate and institutional clients, 2,000 are held outside the U.S. “The global demand for our services is accelerating at an extremely impressive rate,” he says. “We see corporate governance being transformed into a business. Companies are outsourcing governance-related business and voting processes to us.”
A former CEO of Thomson Corp.'s Thomson Media unit, Connolly founded tech consulting firm Mainspring in 1996 and sold it to IBM five years later. In 2002'03 he oversaw the postmerger integration of PricewaterhouseCoopers’ consulting business into IBM. “As a CEO, I learned that you couldn’t ignore ISS,” he says. “They were helping companies with governance before we knew what that meant.”
