Rating the ratings: How good are commercial governance ratings?

• 成果类型: Article
• 署名作者: Daines, Robert M.; Gow, Ian D.; Larcker, David F.
• 署名单位: Stanford University; Stanford University; Northwestern University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.06.005
• 发表日期: 2010
• 页码: 439-461
• 关键词: CORPORATE GOVERNANCE; Governance ratings

摘要

Proxy advisory and corporate governance rating firms (such as RiskMetrics/Institutional Shareholder Services, GovernanceMetrics International, and The Corporate Library) play an increasingly important role in U.S. public markets. They rank the quality of firm corporate governance, advise shareholders how to vote, and sometimes press for governance changes. We examine whether commercially available corporate governance rankings provide useful information for shareholders. Our results suggest that they do not. Commercial ratings do not predict governance-related outcomes with the precision or strength necessary to support the bold claims made by most of these firms. Moreover, we find little or no relation between the governance ratings provided by RiskMetrics with either their voting recommendations or the actual votes by shareholders on proxy proposals. (C) 2010 Elsevier B.V. All rights reserved.