Although corporate governance standards in individual countries are generally correlated with the respective government’s financial strength, a new report from Standard & Poor’s finds some notable exceptions.
The report notes that some countries with speculative ratings, nevertheless have strong governance scores. “Of the countries with speculative grade sovereign ratings, India, and to a lesser extent Brazil, are distinguished by a relatively strong governance profile,” said Standard & Poor’s governance analyst George Dallas. “India in particular ranks favorably relative to many investment grade sovereigns in the four individual subcategories of indicators.”
Conversely, governance remains a source of ongoing concern in Russia, China, Indonesia, and Turkey–where external indicators of governance were consistently weak. “For those countries that might be distinguished either positively or negatively in this comparison, there is scope for greater investor scrutiny at the individual company level to gauge whether governance-related risks are appropriately factored into either credit or equity risk premia,” concluded Dallas.
India, Brazil, show relatively strong corporate governance: report
Governance a source of concern in Russia, China
- By: IE Staff
- November 18, 2005 November 18, 2005
- 08:45