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Good governance pays 18pc more

By Toby Lucich

UK companies with exceptional corporate governance records generate returns 18 per cent higher than those with poor records, according to the Association of British Insurers (ABI).
The study analysed 654 UK FTSE All-Share companies over four years to 2007 using data from the ABI?s Institutional Voting and Information Service, which highlights breaches of good governance using a colour code system.

According to the study, poor corporate governance within a company reduced an industry adjusted return on assets, on average, by one per cent a year.

Illustrating this, the study found $211 invested in a well-governed company returned, on average, $38 more than a poorly governed company.

Good governance pays 18pc more

Full post as published by inside Sarbanes Oxley on March 05, 2008 (boomark / email).