Proxy advisory firm Institutional Shareholder Services Inc yesterday refused further comment after taking a swipe at Bermuda as a domicile in a report about a high-profile proxy battle.

ISS, a subscription service for institutional investors, issued a report about the ongoing proxy fight between Argo Group International Holdings Ltd and activist shareholders Voce Capital Management, holders of a 5.6 per cent stake in Argo.

The two groups have been at odds since Voce earlier this year attacked what it called a “spendthrift culture” and “inappropriate corporate expenses” at Argo. Argo has denied Voce’s claims.

Argo and Voce have each put forward a slate of director nominees in advance of the company’s annual general meeting on May 24.

In its report, ISS threw its weight behind Argo’s slate, citing the strong results that the Bermudian re/insurer’s board and management have delivered for shareholders. It also noted Argo’s “good overall governance” and said “the board has appropriately refreshed itself in recent years”.

The report also stated: “For a business that requires constant risk assessment, it’s ironic that none of the directors saw the risk in a self-promoting CEO whose interests and hobbies were inextricably intertwined with Argo’s marketing budget. Some degree of complacency, perhaps as a byproduct of the company’s Bermuda domicile, may have played a role here.”

ISS yesterday declined to comment about the company’s view of Bermuda as a jurisdiction, why being domiciled in Bermuda would lead to a degree of complacency on the part of the board of directors of Argo Group, and what evidence ISS reviewed that led to it making the comment about board complacency.

Addressing ISS’ comment about board complacency, an Argo spokesperson said: “We don’t agree that this is the case.”

ISS, in operation for more than three decades, has 30 offices worldwide in 13 countries, and has more than 1,800 staff. It claims to produce more than 42,000 proxy analyses annually in 115 global capital markets.

The proxy battle war of words continued yesterday with Argo’s independent directors sending a letter to the company’s shareholders. The letter reviewed the company’s total shareholder returns over the last five years, and urged shareholders to vote for the Argo slate of director nominees.

The letter said: “We have provided you with objective facts and reasoned analysis, not ‘flashy diatribe’.”

Global governance firm Glass Lewis, a subscription service with more than 1,300 clients, is expected to soon issue its report on the proxy fight between Argo and Voce.