UPDATE 1-Proxy adviser ISS recommends activist nominees for Taubman Centers' board

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May 23 (Reuters) - Proxy advisory firm Institutional Shareholder Services (ISS) recommended on Tuesday that Taubman Centers Inc's shareholders vote for two directors nominated by a real estate activist hedge fund to the shopping mall operator's board.

ISS recommended Taubman shareholders vote for hedge fund Land and Buildings Investment Management LLC's founder Jonathan Litt, and fellow dissident board candidate, Charles Elson, a University of Delaware finance professor and corporate governance expert.

ISS also recommended shareholders vote for company nominee Buckley Marakovits, whose seat was uncontested at this year's annual meeting.

Last month, Land and Buildings urged Taubman's shareholders to elect its nominees, a move that came six months after the hedge fund asked the company to explore strategic options, including a sale or a spin-off of certain assets.

The hedge fund had argued Taubman should take steps to address the substantial difference between the company's stock and its net asset value, its "inferior operating performance", as well as management's "disastrous capital allocation decisions".

The Stamford, Connecticut-based hedge fund owns about 1.2 percent of Taubman's shares, according to Thomson Reuters data.

Considering the breadth of the company's governance issues, it makes sense to prioritize adding a governance perspective to the board, ISS wrote in its analysis report. (Reporting by Michael Flaherty in New York and Divya Grover in Bengaluru; Editing by Chizu Nomiyama and Savio D'Souza)