Raising the Bar on Corporate Governance : A Study of Eight Stock Exchange Indices

Grimminger, Andreas D. ; Di Benedetta, Pasquale

World Bank and the International Financial Corporation, Washington, DC

关键词: ACCESS TO CAPITAL;    ACCOUNTING;    ACCOUNTING STANDARDS;    ACQUISITIONS;    ARBITRATION;   

RP-ID  :  78552

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Stock exchanges around the world havelaunched Corporate Governance Indices (CGIs), sometimes aspart of a broader Environment, Social, and Governance (ESG)initiative. The comprehensive analysis of these indicespresented in this study is the first of its kind, and itreveals that CGIs have a positive impact, enhancing legaland regulatory frameworks by extending governance criteriato develop objective and measurable benchmarks. The studyalso shows that CGIs present companies with an opportunityto differentiate themselves in the market and, ultimately,offer companies an incentive to adopt better governancepractices. Nevertheless, as the process for vetting andevaluation of companies for inclusion in the indicescontinues to evolve, access to underlying methodologies,disclosure of the ratings and self-assessments of individualcompanies, and of overall monitoring processes andprocedures can still be enhanced. This study reviews thedifferent approaches used by stock exchanges to buildindices incorporating corporate governance. In the case ofESG indices, the focus is on the governance component ofthese indices. The study also draws lessons from the stockexchange's experiences and highlights success factorsand shortcomings. In particular it addresses the followingkey questions: (i) what are the key drivers for stockexchanges to launch CGIs; (ii) what are the criticalbuilding blocks in the construction of a CGI; (iii) what arethe risks faced by those investing in CGIs.