ISS governance rating downgrade ‘can hit share performance’
Research shows the downgrading of a firm’s ISS governance rating can result in a 1% slide in share performance—and the fall in value is not recovered.
Image: Black Salmon/Shutterstock
Proxy advisory firm Institutional Shareholder Services (ISS) is well-known for the impact of its controversial voting advice. But new research has revealed the power of its corporate governance rankings, too.
Academics at King’s Business School found that the downgrading of a company's ISS corporate governance rating can result in a 1% slide in share performance during the course of a three-day announcement window. They also concluded that the fall in value is not recovered.
The research, conducted by Paul Guest and Marco Nerino, looked at the stock performance of 3,616 US companies whose governance rating was downgraded by ISS. ISS o
For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda
Related Stories
-
Capita appoints Powell as chairman
Former senior partner at UK's biggest professional services firm to lead the board at Capita.
-
Diligent launches search for top 100 governance professionals 2020
The Modern Governance 100 programme honours company secretaries, corporate counsels and other professionals driving change in their organisations.
-
Shareholder body advises against reappointment of Coca-Cola HBC chair
Shareholder advisory group PIRC says the drinks company's current chairman can not be considered independent.
