Below are key takeaways from ISS’ recently released 2026 Continental Europe Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Knowledge Center and its Library tab and to corporate subscribers by logging into Compass then selecting Governance and the Governance Library or Governance Exchange tab.
- European Competitiveness and Sustainability Requirements Simplification: The EU’s Competitiveness Compass and Omnibus I package mark a structural pivot in European policy, narrowing the scope and depth of sustainability disclosure obligations. Despite political agreements at the EU level, uncertainty remains for the 2026 reporting season given the diverging local transposition of EU sustainability rules. Investors are expected to move beyond requiring formal compliance from portfolio companies, placing greater emphasis on materiality, governance oversight, and the credibility of issuer-specific sustainability disclosures.
- Competitive Pay vs. Shareholder Discipline: Executive and non-executive pay frameworks are increasingly citing “international competitiveness,” particularly in comparison with U.S. peers. Remuneration proposals in 2026 will likely face more pointed scrutiny, especially where rationale, transparency, or alignment with shareholder value appear limited. Boards are also increasingly expected to rely on discretion in performance evaluations due to geopolitical and economic volatility.
- Reframing of DEI Metrics in Executive Pay: DEI metrics are being repositioned under broader categories such as leadership and corporate culture, particularly among companies with U.S. exposure. Amid rising legal and political sensitivity, especially in the U.S., this reframing allows for continued focus on diversity without relying on standalone, formulaic targets.
- Gender Diversity Compliance Deadline (June 30, 2026): The 2026 AGM season represents the final window for compliance with the EU Gender Balance on Company Boards Directive. Despite the passed transposition deadline, implementation remains uneven. Average representation of the underrepresented sex across EU boardrooms has reached 30.5 percent, with continued momentum observed in Eastern Europe. Enforcement expectations vary across jurisdictions, leaving the practical impact of the June 2026 compliance deadline uncertain.
- Meeting Format: Meeting format debates persist in select markets. In Germany, many companies that have not convened a physical meeting since before the pandemic are reverting to in‑person AGMs in 2026; however, concerns regarding shareholder participation persist due to ongoing logistical and technological constraints, thereby renewing calls for modernization of the proxy infrastructure. Italy, which permits closed‑door shareholder meetings, is facing EU scrutiny for potentially infringing on shareholder rights. In the Netherlands, a permanent digital meeting law is advancing but will not materially affect arrangements in 2026.
- Management Say-on-Climate (MSoC) Proposals: The initial wave of MSoC proposals has plateaued, with fewer new adopters and minimal commitments to regular votes. France continues to dominate the European landscape. Many companies are expected to report on their usual 2025 short‑term GHG targets in 2026, while setting additional interim goals as 2030 approaches and the EU has set its 2040 climate objective.
By:
ISS European Governance Research
