Corporate governance poor in emerging countries
Survey of 321 companies supports commonly held view
Corporate governance is below par in most emerging countries a new survey
examined 321 companies from 25 countries in emerging markets has found.
GovernanceMetrics International, the corporate governance research and
ratings firm, found the average rating for companies in emerging markets was
4.3, compared to an average rating ranged from 6 to 7.
‘Investors have long perceived that emerging market companies have relatively
poor governance attributes,’ said GMI chief executive Gavin Anderson, ‘and our
research shows that for the most part perception is reality.’
Only two emerging market companies -Taiwan Semiconductor Manufacturing Co.
and Gold Fields Ltd. of South Africa – rated above average at 7.5.
The country with more than one surveyed company that had the lowest average
score was South Korea, at 2.31, followed by Greece at 2.52, China at 2.94 and
Brazil at 3.23.
Larger companies generally have better governance than smaller companies,
with the trend being toward improved governance, the report found.
Thirty-eight companies achieved GMI’s highest rating of 10, including
Canadian telephone operator BCE, Colgate-Palmolive and food and beverage PepsiCo
being amongst the highest rated.