UPDATE 3-MSCI studies sale, other options for proxy adviser ISS
* Morgan Stanley hired to explore options for controversial unit
* ISS accounts for about 11 percent of MSCI's revenue
* Despite heat, "We like the ISS business" - MSCI spokesman
By Ross Kerber and Neha Dimri
Oct 31 (Reuters) - Stock market index provider MSCI Inc said on Thursday that it is exploring a sale or other options for its influential and controversial governance unit, Institutional Shareholder Services Inc.
Any changes for ISS would come at a time of growing attention to corporate governance issues after the financial crisis, thrusting into the spotlight ISS recommendations on once-arcane matters like whether to approve executive pay or re-elect corporate directors.
ISS of Rockville Maryland had already been through a series of owners before MSCI bought it in 2010. The unit accounted for about 11 percent of MSCI's total revenue of $258.2 million in the third quarter.
ISS has more than 1,700 clients for its corporate governance services overall, well ahead of competitors like Glass, Lewis & Co of California.
But as ISS has become better known, its work has drawn much criticism. Companies and trade groups like the U.S. Chamber of Commerce have questioned ISS's methodologies and periodic opposition to management on various high-profile matters. Continued...