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3 - Can We Measure Corporate Governance?

from Part I - What Do We Know about Corporate Governance Practices?

Published online by Cambridge University Press:  23 May 2024

Bryce C. Tingle
Bryce C. Tingle
Affiliation:
University of Calgary
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Summary

The modern governance regime claims to be able to “count” corporate governance best practices and calculate the relative governance quality of disparate companies. Companies expend resources to achieve high governance rankings in the various ratings schemes published by proxy advisors, governance bodies, and media outlets. However, empirical evidence shows no correlation between governance scores and firm performance. Both academic and commercial governance ratings schemes measure only noise.

Keywords

measuring corporate governancecorporate governance ratingscorporate governance industryproxy advisorsgovernance rankingsbest practices
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Chapter
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Hard Lessons in Corporate Governance , pp. 56 - 69
Publisher: Cambridge University Press
Print publication year: 2024

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