Evaluation of corporate governance systems by credit rating agencies
In periods of high market volatility, and in order to minimize their risks, some investors prefer to invest their funds in well-governed companies. This paper aims to describe the methodology used by rating agencies to assess corporate governance systems (CGS) and to compare agencies’ practices. Mor...
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| Veröffentlicht in: | Journal of management and governance 2016-06, Vol.20 (2), p.363-385 |
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| container_end_page | 385 |
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| container_title | Journal of management and governance |
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| creator | Louizi, Amir Kammoun, Radhouane |
| description | In periods of high market volatility, and in order to minimize their risks, some investors prefer to invest their funds in well-governed companies. This paper aims to describe the methodology used by rating agencies to assess corporate governance systems (CGS) and to compare agencies’ practices. More and more the shareholders and creditors incorporate mechanisms related to CGS in the assessment of risks. Using a sample of five rating agencies, we distill 51 governance criteria to two governance factors using principal components analysis. The first factor represents the “shareholders rights and board of directors”. The second one is related to “remuneration policy and convergence of interests for shareholders and managers”. We identify three different business models for the corporate governance rating process. |
| doi_str_mv | 10.1007/s10997-015-9331-3 |
| format | Article |
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| ispartof | Journal of management and governance, 2016-06, Vol.20 (2), p.363-385 |
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| language | eng |
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| source | Business Source Complete; Springer Nature - Complete Springer Journals |
| subjects | Accounting/Auditing Boards of directors Bond ratings Business and Management Corporate governance Credit rating Credit ratings Credit risk Executive compensation Industrial Organization Institutional investments Investors Management Performance evaluation Principal components analysis Rating services Ratings & rankings Shareholders rights Sociology Stockholders Studies Variables Volatility |
| title | Evaluation of corporate governance systems by credit rating agencies |
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