We interrupt our (seemingly constant) discussion of the Tax Cuts and Jobs Act legislation to talk about proxy season. The Investor Stewardship Group (ISG), a collective of some of the largest U.S.-based institutional investors and global asset managers, is reminding companies that its Corporate Governance Framework for U.S. Listed Companies goes into effect January 1, 2018.

Beginning with the 2018 proxy season, ISG signatories are encouraging companies to articulate how their governance structures and practices align with the ISG’s Corporate Governance Principles and where and why they differ in approach. ISG signatories believe companies can best decide on how and where to disclose their alignment with the Principles, for example, through investor relations, boards of directors or corporate governance websites, or in other investor outreach/engagement materials.

Most of the principles in the ISG Framework relate to corporate governance matters unrelated (or only tangentially related) to executive compensation. However, the Framework contains two points on executive compensation:

Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company.

6.1 As part of their oversight responsibility, the board or its compensation committee should identify short- and long-term performance goals that underpin the company’s long-term strategy. These goals should be incorporated into the management incentive plans and serve as significant drivers of incentive awards. Boards should clearly communicate these drivers to shareholders and demonstrate how they establish a clear link to the company’s long-term strategy and sustainable economic value creation. All extraordinary pay decisions for the named executive officers should be explained to shareholders.

6.2 A change in the company’s long-term strategy should necessitate a re-evaluation of management incentive structures in order to determine whether they continue to incentivize management to achieve the goals of the new strategy.

These are not revolutionary concepts. However, boards, companies, and their counsel should review the Framework and Principles and consider addressing all or some of them in their 2018 proxy statements, particularly those companies that have one or more significant stockholders among the ISG members.