Change in RiskMetrics Group Governance Ratings
RiskMetrics is introducing a new corporate governance rating for corporate issuers. With a nod to the recognition of the importance of risk management in the wake of the financial crisis, the new rating system is labeled Governance Risk Indicators (“GRId”). This system will succeed the existing Corporate Governance Quotient scores.
The new measure differs in two key respects from the current CGQ score:
- rather than a single score, the new scoring will be based on an assessment of concern (high, medium, low) along four independent categories: audit, board structure, compensation, and shareholder rights; and
- the scores will now be absolute rather than relative to index or industry peers.